Orlecki v Challenge Insurance Group Inc, 2014 ABQB 664

Court of Queen ’ s Bench of Alberta Citation: Orlecki v Challenge Insurance Group Inc, 2014 ABQB 664 Date: 20141031 Docket: 1303 17789 Registry: Edmonton Between: George Orlecki Plaintiff - and - Challenge Insurance Group Inc. and CIGI Insurance Services Inc. ` _______________________________________________________ Reasons for Judgment of W. S. Schlosser , Master in Chambers _______________________________________________________ [ 1 ] This is an application to relax the (now) express undertaking to allow portions of a transcript from one action to be used in another. [ 2 ] Rule 5.33 provides:

Confidentiality and use of information 5.33(1) The information and records described in subrule (2) must be treated as confidential and may only be used by the recipient of theinformation or record for the purpose of carrying on the action in which the information or record was provided or disclosed unless (

a) the Court otherwise orders (

b) the parties otherwise agree, or (

c) otherwise required or permitted by law.

(2) For the purposes of subrule (1) the information and records are: (

a) information provided or disclosed by one party to another in an affidavit served under this Division; (

b) information provided or disclosed by one party to another in a record referred to in an affidavit served under this Division; (

c) information recorded in a transcript or questioning made or in answers to written questions given under this Division [3] This action is for compensation arising from an employment agreement. The Defendants deny owing any compensation andsay that the Plaintiff was paid in accordance with an agreement that was amended in 2008. In the other action, which is about non-competition, and which arises from the same employment arrangement, the Defendant admits the amended agreement. In this action hedenies it.

At the questioning in the non-competition action he said: Question: Do you know who signed that? [The amended employment agreement.] Answer: No Question: Were you supposed to have signed that? Is that the deal? Answer: It is the deal. Question: So it accurately reflects the arrangements, but that’s not your signature; is that correct? Answer: Correct, that’s right. [4] The Defendant Applicant wants to use the evidence from that action to support a

summary judgment application in this one.This seems to be a very nice admission and it is understandable that the Applicant should want to transfer it from one action to another.But they don’t want to use it just to impeach credibility, (which may throw a

summary judgment application off the rails); the Applicantwants to use it as an admission against interest. [5] If the evidence were to be used to impugn creditability,

section 23 (and 25) of the Alberta Evidence Act, RSA 2000, c A-18and the rule in Browne v Dunn (1894), 1893 CanLII 65 (FOREP), 6 R. 67 (HL) would apply. The rule requires the substance of theprior inconsistent statement be put to the witness.

Fairness dictates that they have an opportunity to explain. [6] In Browne v Dunn Lord Halsbury said: To my mind nothing would be more absolutely unjust than not to cross-examine witnesses upon evidence which they have given, so as togive them notice, and to give them an opportunity of explanation, and an opportunity very often to defend their own character, and, nothaving given them such an opportunity, to ask the jury afterwards to disbelieve what they have said, although not one question has beendirected either to their credit or to the accuracy of the facts they have deposed to. [7] Using evidence from another action to impugn creditability is the type of situation to which rule 5.33(1)(

c) applies. In thiscontext, it is more required than permitted (see Iozzo at para. 11 and Hardcap at para 61, cited below). [8] If the evidence is to be used to make a case, to establish liability or a defence, rule 5.33(1)(

a) applies. On that front,Graesser, J., summarized the law saying: [56] Regarding the importance of the implied undertaking, the Government cites Juman v Doucette, 2008 SCC 8 , 2008SCC8. At para 30, the Supreme Court notes that “exceptional circumstances” are required before the Court can exercise its discretion toprovide relief from the implied undertaking. [57] In Pl v Alberta, 2012 ABQB 309 at para 117, I set out a three-part test for listing the implied undertaking: [117] From the case law, I conclude that on an application to lift the implied undertaking: 1.

The party seeking to lift its bears the burden to demonstrate through cogent and persuasive reasons that the relief should begranted; 2. The information sought to be used must be relevant and material to the application or action in which it is sought to be used (inother words this should not be a fishing expedition); and 3. To grant the relief sought, the court must conclude that the public interest in seeing justice done in the particular case outweighsthe privacy interest of the litigants involved in the other litigation and the integrity of the discovery process.

[58] I commented at para 118: [118] Considerations in determining whether the implied undertaking should be lifted include the presence of fraud or criminalwrongdoing, whether the information could have been obtained from other sources, whether third parties are involved, and whether thenew proceedings are connected with the proceedings in which disclosure was made, in the sense that they involve the same or similarparties, the same or similar issues, and arise out of the same series of events (from LSI Logic, supra). [59] The test above was approved in Secure Energy Services Inc. v CCS Corporation, 2014 ABQB 107 where Wittmann CJQB heldat para 13 that the applicant must meet a “heavy burden” at “every stage” of the test.

LC v Alberta, 2014 ABQB 557 (see also Doucette v Wee Watch Daycare Systems Inc., 2008, 50 CPC 6, sub nom Juman v Doucette,2008 SCC 8 per Binnie J. at paras 30-41; Iozzo v Weir, 2004,ABQB 259; Hardcap Investments Inc. v Alberta Permit Pro, 2007 47 CPC 699 (Alta. QB) and Johma v McAllister, 2008, 96 Alta LR (4th) (Alta QB): all of which precede the passing of our rule 5.33 but go to theapplication the now codified ‘implied undertaking’). [9] It remains to be seen how this lawsuit will turn out, but public policy does not support starting lawsuits that are inconsistentwith sworn testimony in other lawsuits.

There is no doubt the evidence is relevant and material. It is difficult to see any prejudice. Inparallel circumstances in Iozzo v.

Weir , 2004 ABQB 259, Slatter J (now JA) said (at para.10): … It can only bring the administration of justice into disrepute if a party can give an answer under oath in one discovery, and then bringan application in express contradiction to the answer given under oath … [10] I do not want to wade into the debate about whether there is a parallel distinction between ‘impeachment’ and ‘incrimination,’in the criminal context and impeachment and establishing liability or a defence in the civil realm (e.g.

R v Nedeleu, 2012 SCC 59, R vNoel, 2002 SCC 67, R v Kuldip, (SCC), [1990] 3 SCR 618)) but the question appears to be whether as a condition ofrule 5.33(1)(a), fairness dictates that the Court ensure that the party have an opportunity to explain the evidence. [11] This could come up in several forms. First, the party seeking to use the evidence could put it to the party on cross examinationon an Affidavit. This would be the riskiest approach from the Applicant’s perspective because the evidence can be used by both sides.Second, it might be put to the party at the Questioning.

There would be a chance to respond there but a more limited opportunity for theparty questioned to use the explanation. They could put it to the witness on the stand at trial. This lawsuit is in its salad days and (to mixmetaphors) the questioning is only on the horizon. There is no reason it shouldn’t be used now. [12] Just because the Applicant might be obliged to put this evidence directly to the Plaintiff during examination if they wereseeking to impeach credibility in a Browne v Dunn scenario, does not, in my view, require that the use of the evidence be so limited.

Inmy view, the Applicant is free to treat the questioning admissions in the non-competition action as admissions against interest in theemployment compensation action and use it as if it were an excerpt from the questioning there. If the Plaintiff wishes to respond by wayof an Affidavit he is free to do so. He may also avail himself of Rule 5.31(3) with respect to other parts of the transcript in the non-competition action that may explain or qualify these admissions. Heard on the 27th day of October, 2014. Dated at the City of Edmonton, Alberta this 31st day of October, 2014. W. S. Schlosser M.C.C.Q.B.A.

Appearances: Christopher Hoose Stillman LLP for the Plaintiff/Respondent

Gregory Leia Wolff Leia for the Defendants/Applicants