IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Fournier v. Stangroom,

 

2011 BCSC 1253

Date: 20110921

Docket: M121259

Registry: New Westminster

Between:

Craig Richard Dennis Fournier

Plaintiff

And

Shianne Brook Stangroom, Steven Bradley Stangroom, and
GMAC Leaseco Corporation/La Compagnie GMAC Location

Defendants

 

Before: Master Caldwell

Reasons for Judgment

Counsel for the Plaintiff:

R.W. McMullan

Counsel for the Defendants:

S. Hudson

Place and Date of Hearing:

New Westminster, B.C.

June 17, 2011

Place and Date of Judgment:

New Westminster, B.C.

September 21, 2011


 

[1]           This matter arises from a motor vehicle accident which occurred on July 24, 2007.

[2]           The plaintiff applies for an order that the defendants disclose and list documents not currently on their list of documents and that they produce for inspection certain listed documents regarding which they claim litigation privilege.

[3]           The first question which arises relates to the appropriate test or rule to be applied to the disclosure.

[4]           This question arises because plaintiff’s counsel demanded a list of documents from the defendants on February 12, 2010 well before the new rules came into effect on July 1, 2010. Defendants’ counsel had provided an initial List of Documents prior to plaintiff’s counsel’s demand but it was completely inadequate; they provided an Amended List of Documents, pursuant to the demand, on December 10, 2010 but it was still inadequate and lacking in anything approaching proper form and completeness. The Second Amended List of Documents of the defendants is dated March 24, 2011, after the new rules came into effect, and is at least somewhat better than the others.

[5]           Plaintiff’s counsel refers to this process as “incremental disclosure”; I find no need to label the process, but I do note that it seems that defence counsel was either completely ignorant of his or her obligations to provide a proper List of Documents in a timely fashion or was willing to knowingly provide an inadequate list in hopes that plaintiff counsel wouldn’t notice or wouldn’t complain.

[6]           Prior to July 1, 2010 the requirements for listing documents was governed by Rule 26(1) which reads as follows:

Delivery of and answer to demand for discovery of documents

(1)  A party to an action may deliver to any other party a demand in Form 92 for discovery of the documents which are or have been in the party's possession or control relating to any matter in question in the action, and the other party shall comply with the demand within 21 days by delivering a list, in Form 93, of the documents that are or have been in the party's possession or control relating to every matter in question in the action.

[7]           Since July 1, 2010 the requirements for listing documents has been contained in Rule 7-1 and in particular 7-1(1), (10), (11), (12), (13) and (14). It is often argued that the disclosure required by these rules is narrower and less extensive than that under the previous rule.

[8]           Here an obligation arose or existed prior to the new rules coming into force. Should that obligation continue to exist pursuant to the old rules and applicable law in spite of the rule change? The demand was made under the former Rule 26 and the obligation to provide an adequate list arose under that rule and the case law flowing from it; that obligation must continue in spite of the rule change. In my respectful view, to find otherwise would allow the defendants to use their own breach and disregard of the rule in place at the time of the demand in order to reduce their disclosure obligations to that required by the new rules.

[9]           I would note that Rule 7-1 and its possibly narrower requirements would govern any defence documents which came into existence after July 1, 2010 however, that may be of only theoretical importance in this case as plaintiff’s counsel concedes that the latest date for the reasonable contemplation of litigation by the defence would be the date that the writ was issued, July 23, 2009.

[10]        The next issue involves what has been referred to as the MEA Engineers file material.

[11]        On August 9, 2007 the initial adjuster on the file requested MEA or one of their engineers to examine the plaintiff’s vehicle in order to determine whether the plaintiff was wearing his seatbelt at the time of the collision. The engineer did so, communicated with the adjuster the following day with questions and subsequently reported to the adjuster on September 13, 2007. That adjuster referred to that report as being sufficient for his purposes; the next adjuster, Ms. Madsen referred to the “verbal report” as being “sufficient for the purposes of handling the claim SHORT OF LITIGATION” (emphasis mine).

[12]        In early 2011 defence counsel commissioned MEA to prepare an expert report, apparently regarding the seatbelt issue, for possible use at trial; he says that since such a report has now been requested, the engineer’s file material, notes and such are not producible unless and until the report is received and provided to plaintiff’s counsel 84 days before trial.

[13]        In cases such as this one, the adjuster or adjusters have duties of investigation on behalf of both the plaintiff and the defendants; there must, almost of necessity, be an initial period of adjusting or investigating to discover the factual matrix within which the adjusters will perform their duties and assess the file and the claims or roles of the interested parties. Absent such period and process of investigation the adjuster can have no reasonable basis upon which to conclude that there is a reasonable prospect of litigation and that all or part of what is done from any given point in time forward is done for the dominant purpose of litigation. In this regard see Hamalainen (Committee of) v. Sippola (1991) 62 BCLR (2d) 254 (BCCA).

[14]        These engineers were approached within the first 3 weeks following the collision, clearly within the period of initial investigation and was even seen by at least one of the adjusters as being used for purposes of handling the file short of litigation. The investigative material, notes, correspondence and other such recordings of the engineers were not created at a time when litigation was a reasonable prospect; neither were they created for the dominant purpose of litigation. The fact that counsel has now requested an expert report from MEA does nothing to change that any more than a request to a G.P. or plaintiff’s medical expert that he or she provide an expert report renders that practitioner’s clinical records privileged.

[15]        The MEA investigative material, notes, correspondence and working papers which arose between August 9, 2007 and September 13, 2007 inclusive are not subject to a valid claim of litigation privilege; they are ordered to be listed and to be produced to plaintiff’s counsel within 14 days. If there are any other MEA materials which arose between September 14, 2007 and the date when defence counsel commissioned their expert report, those are to be listed with the required clarity, date and description in order that any further claim of litigation privilege can be properly assessed.

[16]        The remaining disputed documents are:

4.3       three file transfer summaries, a customer record regarding the plaintiff, a head office claim referral report and a head office claim exposure report;

4.5       Nuttal Adjusters report (October 3, 2008) regarding plaintiff’s employment and related invoice for report;

4.6       unredacted CWMS notes for claim M935227-2 (plaintiff’s file);

4.7       unredacted CWMS notes for claim N090354-2 (defendant’s passenger’s file);

4.8       Lanki Investigations report regarding plaintiff’s social media and network and related invoice for report.

[17]        Defence counsel has provided the CWMS notes for the plaintiff’s file, without redaction, from the date of the accident until sometime on July 25,2008 approximately 1 year later. The “cut-off” appears to have been the end of a meeting on that date involving the current adjuster Ms. Madsen, the plaintiff and his mother.

[18]        The notes relating to that meeting include an entry by Ms. Madsen beginning with 4 stars (****) and followed by the statement “they want to settle”; Ms. Madsen makes an offer of $12,000 which is not well received. Following various comments by both the plaintiff and his mother they indicate that they want “at least” $25,000. Those figures put the parties $13,000 apart.

[19]        The vast majority of the entries following the meeting are redacted for litigation privilege; details of the redactions are provided in the affidavits of Ms. Madsen and Mr. Cuthbert who took over the file on November 10, 2008 and handled it until handing it off to Ms. Jacobs on May 12, 2009.

[20]        Was it reasonable in light of the circumstances of this case and the various dealings between the adjusters, the plaintiff and his mother for Ms. Madsen to conclude that litigation was a reasonable probability as of July 25, 2008? In my view the answer to that question is yes as to the issue of quantum and extent of damage/loss but no as to the issue of liability.

[21]        I am satisfied that there were significant inconsistencies and difficulties in the plaintiff’s position regarding his injuries, school performance, work situation and the comments of his doctor and that those, cumulatively, were sufficient to establish a reasonable apprehension in the adjuster’s mind that litigation would be reasonably likely on the issue of quantum.

[22]        I am unable to say the same on the issue of liability which is set for trial in the Spring of 2012.

[23]        By July 25, 2008 the issue of liability had been determined, albeit for what is referred to as internal purposes, as being assigned 100% against the defendant driver and in favour of the plaintiff. That determination had been communicated to the plaintiff and to the defendants. Based on what was known by the plaintiff and the adjuster on that date, it is not reasonable for Ms. Madsen to assert that she was of the view that litigation on the issue of liability was a reasonable prospect and that what was being done from that point forward was for the dominant purpose of such litigation. The most that can be said is that there may, or even must, have been further investigation into the issue of liability, but that would be producible as a part of the continuation of the adjusting or investigative phase as discussed in Hamalainen until such time as a reasonable and principled decision to deny liability was reached.

[24]        In my view, that distinction is relevant and important.

[25]        From the end of the meeting on July 25, 2008 the entries, reports and other such material which relates to the issue of loss, damage and quantum is reasonably subject to a claim of litigation privilege and need not be further itemized or produced; the entries, reports and other such material which exist in either claim file or elsewhere, relating to liability and which pre-dates the determination to deny liability is not reasonably or properly subject to a claim of litigation privilege and must be listed and produced for inspection within 14 days.

[26]        The plaintiff will have his costs of this application in any event of the cause.

“Master Caldwell”