2016 NLCA 73, 2016 NLCA 73

Unifund Assurance Company, Unifund, Compagnie D’Assurance (appellant) v. John Churchill (respondent) (16/29) Indexed As: Unifund Assurance Company v. Churchill 2016 NLCA 73 1 C.A.N.L.R. 343 Court of Appeal of Newfoundland and Labrador Green C.J.N.L., Welsh and Barry JJ.A. December 21, 2016

Summary: The respondent John Churchill brought an action against his insurer related to injuries resulting from a motor vehicle accident. He also settled a claim against the driver of the other vehicle. The appellant, Unifund delivered interrogatories to Mr. Churchill, including a question about whether he had submitted to any independent medical examinations in connection with the tort claim against the other driver. Mr. Churchill refused to answer the question on the grounds of privacy, litigation privilege and the implied undertaking rule.

Unifund applied for an order compelling him to answer the question and to provide copies of any medical reports. The applications judge dismissed the application. Unifund appealed. Held: Appeal allowed. Welsh J.A. (Green C.J.N.L. and Barry J.A. concurring): When this application was heard, leave to appeal was required on the basis that the order was interlocutory in nature. Although changes to the rules have since come into force, here, the former rules apply even though the decision was released after the new rules came into force.

In the circumstances, the result is the same whether rule 57.02 applies or, applying the new rules, leave to appeal is not required. Assuming leave to appeal is required under rule 57.02 , leave should be granted. Rule 31.01(1) of the Rules of the Supreme Court, 1986 provides for a party to serve interrogatories on an adverse party, and for that party to respond. Rule 31.03(2) provides that an objection to answering any interrogatory may only be taken on the ground of privilege or that it is not relevant.

To be relevant, the requested document must relate to the issues between the parties, be useful and be likely to contribute to resolving the issues. The reports of medical examinations sought by Unifund are relevant. Accordingly, Mr. Churchill could not refuse to reply to the interrogatory by contending that the requested information is not relevant. ______________________________ Leave to appeal to SCC refused, 37397 (April 20, 2017). An objection to answering an interrogatory may also be made on the basis that the document is privileged.

Litigation privilege is based upon the need for a protected area to facilitate investigation and preparation of a case for trial by the adversarial advocate. Litigation privilege comes to an end, absent closely related proceedings, upon the termination of the litigation that gave rise to the privilege. Special considerations apply to medical reports that are governed by the Rules of Supreme Court, 1986 which constitute subordinate legislation. Rule 34.04(1) addresses the disclosure of medical reports to other parties to the litigation.

Rule 34.04(2) provides that the party requesting a medical examination is entitled to the other party’s previous, relevant medical reports. Rule 34 was a deliberate decision to overrule the privilege in the context of orders for medical examinations. Thus, any report of a medical examination that may be relevant to Mr. Churchill’s claim against Unifund must be included in the list of documents. Further,

Mr. Churchill could not claim litigation privilege for a medical report that was requested by the insurer for the driver of the other vehicle because the action between Mr. Churchill and the driver of the other vehicle has been concluded. The implied undertaking rule is that both documentary and oral information obtained on discovery, including information thought by one of the parties to disclose some sort of criminal conduct, is subject to the implied undertaking.

It is not to be used by the other parties except for the purpose of that litigation, unless and until the scope of the undertaking is varied by a court order. It is also subject to legislative override. The implied undertaking rule is not engaged in this case. Disclosure of the plaintiff’s relevant medical reports constitutes factual information that is necessary for ascertaining the truth, encouraging settlement and narrowing the issues. In short, there is no public policy reason for application of the implied undertaking rule in these circumstances.

Insofar as the rule could be said to be engaged, it would be overridden by the requirements of rules 31 and 34, which constitute subordinate legislation. The medical reports referenced in the interrogatory are relevant and neither litigation privilege nor the implied undertaking rule applies to prevent their disclosure. The judge erred in concluding otherwise. Cases cited: Atlantic Lottery Corporation Inc. - Societé de Loteries de l’Atlantique v. Babstock , 2016 NLCA 64 Imperial Oil v. Jacques , 2014 SCC 66 , [2014] 3 S.C.R. 289 Blank v. Canada (Minister of Justice) , 2006 SCC 39 , [2006] 2 S.C.R. 319 Lizotte v.

Aviva Insurance Company of Canada , 2016 SCC 52 Morrissey v. Morrissey , 2000 NFCA 67 , 196 Nfld. & P.E.I.R. 262 Juman v. Doucette , 2008 SCC 8 , [2008] 1 S.C.R. 157 Counsel: Glen L.C. Noel and Megan C. Taylor, for the appellant; E. Mark Rogers and Shelley J. Handrigan, for the respondent. This appeal was heard on June 17, 2016 before Green C.J.N.L., Welsh and Barry JJ.A. The following judgment was delivered on December 21, 2016 by Welsh J.A. for the Court. ______________________________________________________________ Welsh J.A.: [ 1 ] John Churchill was injured in a motor vehicle accident on December 13, 2010.

He brought actions against the driver of the other vehicle for damages and against his own insurer, Unifund Assurance Company, for wage-indemnity benefits that he claimed were owing. The questions on appeal relate to the use of and response to interrogatories together with the operation of the implied undertaking rule insofar as it may apply to a medical report prepared for purposes of other litigation. BACKGROUND [ 2 ] Mr. Churchill’s claim against the other driver for damages for personal injury consequent upon the motor vehicle accident was settled by that driver’s insurer. Mr.

Churchill also claimed wage-indemnity benefits under his own insurance with Unifund Assurance. When those benefits were terminated on the basis that he was no longer disabled, Mr. Churchill filed a claim against Unifund. [ 3 ] In response, on December 14, 2015, Unifund delivered interrogatories to Mr. Churchill, including the following question: Have you submitted to any independent medical examinations in connection with the tort claim [against the other driver], arising out of the motor vehicle accident of December 13, 2010, and/or Canada Pension Plan Disability and/or pension/disability providers?

If so, when and with whom?

Mr. Churchill refused to respond to this question citing relevancy, litigation privilege and the implied undertaking rule. [ 4 ] Unifund responded with an application issued on January 27, 2016, seeking an order compelling Mr.

Churchill to answer the question and to produce copies of any reports resulting from the specified medical examinations, subject to Unifund obtaining the consent of the third party providers of such reports. [ 5 ] By oral decision on March 1, 2015, the applications judge dismissed Unifund’s application on the basis that an independent medical examination engages the implied undertaking rule and that the results of the examination “are strictly to be utilized only in the confines of that specific case”. She noted that Unifund may make its own request that Mr. Churchill undergo a medical examination.

Accordingly, Mr. Churchill was not required to answer the question. Nor was he required to produce any medical examination reports. ISSUES [ 6 ] The issues raised by this appeal are: (

a) Is leave to appeal required and, if so, should it be granted; (

b) Is Mr. Churchill excused from answering the interrogatory and supplying the requested reports on the basis of relevancy or litigation privilege; (

c) Does the implied undertaking rule apply such that Mr. Churchill is not required to answer the interrogatory or to supply the requested reports? ANALYSIS Leave to Appeal [ 7 ] When this application was heard, leave to appeal was required on the basis that the order is interlocutory in nature (rule 57.02 of the Rules of the Supreme Court, 1986 ).

As a result of changes to the rules which came into force on October 17, 2016, leave to appeal is no longer required in these circumstances. (See rule 35 of the Court of Appeal Rules , NLR 38/16 .) However, where, as here, a matter was heard prior to October 17, 2016, unless otherwise directed by the Court, the former rules will apply even though the decision is released after the new rules came into force ( rule 60(2) of the Court of Appeal Rules ; Atlantic Lottery Corporation Inc. - Societé de Loteries de l’Atlantique v.

Babstock , 2016 NLCA 64 , at paragraph 11 ). [ 8 ] In this case counsel did not ask to make submissions as to the effect of the change in the rules. In the circumstances, the result is the same whether rule 57.02 applies or, applying the new rules, leave to appeal is not required. That is, the appeal should proceed. Assuming leave to appeal is required under rule 57.02, I am satisfied that leave should be granted based particularly on the need to clarify the law regarding litigation privilege and implied undertakings in a situation such as arises in this appeal.

Application of Rules 31 and 32 – Relevancy and Litigation Privilege [ 9 ] Rule 31.01(1) of the Rules of the Supreme Court, 1986 provides for a party to serve interrogatories on an adverse party, and for that party to respond: A party may serve upon an adverse party written interrogatories in Form 31.01A to be answered by the adverse party, or if the adverse party is a body corporate, partnership or association, by an officer or agent thereof, and subject to rule 31.03, the adverse party, officer or agent shall answer each interrogatory to the best of his or her personal knowledge or from information available to him or her through any person. [ 10 ] Interrogatories must be answered “separately and fully” under oath or affirmation (rule 31.03(1)).

Rule 31.03(2) addresses objections to answering an interrogatory: An objection to answering any interrogatory may only be taken on the ground of privilege or that it is not relevant to the subject matter involved in the proceeding, but not that it is outside of the scope of the pleadings, and the objection shall be made in the affidavit in answer. (Emphasis added.) [ 11 ] Rule 32.01 requires each party to file and serve a list of documents relating to the proceeding. The list must include a short description of each document, but not a copy of the document.

A claim that any document is privileged from production must be included in the list with a statement of the grounds on which privilege is claimed. [ 12 ] Regarding the requirement that only relevant information is listed, in Imperial Oil v. Jacques , 2014 SCC 66 , [2014] 3 S.C.R. 289 , LeBel and Wagner JJ., for the Court, explained: [30] … To be relevant, the requested document must relate to the issues between the parties, be useful and be likely to contribute to resolving the issues … . [31] This relevance requirement ensures that the parties do not conduct “fishing expeditions”.

It also ensures that the conduct of the

proceedings is not delayed, complicated or even jeopardized by the introduction of evidence that does not assist in establishing the rights being claimed … . In this sense, the relevance rule is a procedural balancing rule that ensures the efficiency of the judicial process while facilitating the search for truth. [ 13 ] In this case, Mr. Churchill’s claim against Unifund is premised on his allegation that he has been continuously disabled as a result of, and since, the accident.

While the rules allow for Unifund to request a medical examination, the purpose of the interrogatory is to obtain information with respect to Mr. Churchill’s medical condition closer to the time of the accident. Reports of medical examinations undertaken as close as possible to that time would be relevant to Unifund’s defence against Mr. Churchill’s claim for continuing disability benefits, and may assist in achieving settlement of the claim. It may be inferred that such information could not, with due diligence, be otherwise obtained.

The conclusion follows that the reports of medical examinations sought by Unifund are relevant. Accordingly, Mr. Churchill could not refuse to reply to the interrogatory by contending that the requested information is not relevant. [ 14 ] An objection to answering an interrogatory may also be made on the basis that the document is privileged.

As noted above, rule 32.01 requires a document for which privilege is claimed to be included in the list of documents, with an explanation for the claim. [ 15 ] Assessing the validity of a claim for litigation privilege begins with a consideration of the purpose of the privilege. This is discussed in Blank v. Canada (Minister of Justice) , 2006 SCC 39 , [2006] 2 S.C.R. 319 , at paragraphs 27 to 41 . Fish J., for the majority, accepted that litigation privilege “is based upon the need for a protected area to facilitate investigation and preparation of a case for trial by the adversarial advocate” (paragraph 28).

Further, he explained, “litigation privilege comes to an end, absent closely related proceedings, upon the termination of the litigation that gave rise to the privilege” (paragraph 36).

The reason is that “the privilege to which it gave rise has lost its specific and concrete purpose – and therefore its justification” (paragraph 34). [ 16 ] The phrase, “closely related proceedings”, is described as “separate proceedings that involve the same or related parties and arise from the same or a related cause of action”, or “[p]roceedings that raise issues common to the initial action and share its essential purpose” ( Blank , at paragraphs 39 to 41 ). This consideration does not apply here because Mr.

Churchill’s claim involves a different party and different cause of action from the claim for damages against the driver of the other vehicle. [ 17 ] Finally, Fish J. addressed the test to be applied in determining whether litigation privilege is engaged: [58] The result in this case is dictated by a finding that the litigation privilege expires when the litigation ends. I wish nonetheless to add a few words regarding its birth. … [60] I see no reason to depart from the dominant purpose test.

Though it provides narrower protection than would a substantial purpose test, the dominant purpose standard appears to me consistent with the notion that the litigation privilege should be viewed as a limited exception to the principle of full disclosure and not as an equal partner of the broadly interpreted solicitor-client privilege. The dominant purpose test is more compatible with the contemporary trend favouring increased disclosure. … See also: Lizotte v. Aviva Insurance Company of Canada , 2016 SCC 52 , at paragraphs 22 to 24 ; Morrissey v.

Morrissey , 2000 NFCA 67 , 196 Nfld. & P.E.I.R. 262 , at paragraphs 15 and 37 . [ 18 ] With these principles in mind, special considerations apply to medical reports that are governed by the Rules of Court , which constitute subordinate legislation ( Morrissey v. Morrissey , supra , at paragraphs 32 to 34 ; Judicature Act , RSNL 1990, c. J-4, section 55(4) ).

Rule 34.01(1) provides: Where the physical … condition of a party is in issue, the Court may, at any time on the application of an opposing party or on its own motion, order the party to submit to a physical … examination by a qualified medical practitioner. [ 19 ] Rule 34.04(1) addresses the disclosure of medical reports to other parties to the litigation: A party causing an examination to be made under rule 34.01 shall promptly serve on every other party a copy of any written report of the examination that the examining medical practitioner may make. Applying this rule, Mr.

Churchill would be in receipt of any medical examination reports resulting from his claim against the driver of the other vehicle. [ 20 ] Rule 34.04(2) addresses the disclosure of previous, relevant medical reports: The party causing an examination to be made under rule 34.01 shall be entitled upon written request to receive promptly from the party being examined, a report of any examination of that party previously made by any medical practitioner, relating to any relevant mental or physical condition of the party, and the report shall be made available to the medical practitioner making the examination.

As applied here, if Unifund causes an examination of Mr. Churchill to be made under rule 34.01, it would be entitled to request and receive from Mr. Churchill any previously made medical report that is relevant. [ 21 ] In Morrissey v. Morrissey , supra , Cameron J.A., for the Court, concluded that rule 34 “was a deliberate decision to overrule the privilege in the context of orders for medical examinations” (paragraph 32). In that case, the plaintiff had been involved in a series of accidents. One of the submissions made regarding disclosure of medical reports was similar to that being advanced by Mr. Churchill.

Cameron J.A. explained: [38] The litigation privilege recognizes that relevant information will be withheld from the other party. This is a price which is paid to ensure that the system works and that counsel for litigants can and do conduct the case with the best knowledge available. The appellant

argues that the fact that the defendant can apply to have the plaintiff examined itself ensures fairness and that the litigation privilege need not be further eroded. That is, any unfairness which may be said to exist is met by the plaintiff’s having to submit to an examination by a doctor of the defendant’s choosing. [39] I am not prepared to conclude that in all cases dealing with personal injuries as a matter of law (as opposed to regulation) medical reports not intended to be used at trial must be provided to opposing parties.

However, the particular facts of this case demand that the report sought be revealed, not because it is subject to a rule which requires automatic production, but because in the circumstances of this case the privilege must give way to the importance of facts being available. … Facts were never privileged. That is, the privilege does not afford a privilege against the discovery of relevant facts. … This is not a case where by due diligence the information can be obtained elsewhere. … [ 22 ] Applying the above principles and rules in this appeal, any report of a medical examination that may be relevant to Mr.

Churchill’s claim against Unifund must be included in the list of documents. Consequently, reports of any medical examinations in respect of injury or disability related to the accident must be listed. [ 23 ] Further, in the circumstances, Mr. Churchill could not claim litigation privilege for a medical report that was requested by the insurer for the driver of the other vehicle. That action has been completed. As discussed in Blank , litigation privilege, if it exists, terminates when the litigation that gave rise to the privilege is ended. That principle would apply here because the action between Mr.

Churchill and the driver of the other vehicle has been concluded. Even assuming that litigation privilege could have been claimed for medical reports requested by the other driver’s insurer, that privilege is spent. [ 24 ] Further, as discussed in Morrissey , at paragraph 39 , the purpose of litigation privilege is to aid in the adversarial process, not to impede the discovery of relevant facts which could not be otherwise obtained with due diligence. Application of the rules regarding medical reports is consistent with that principle and governs disclosure of such reports by Mr.

Churchill. [ 25 ] In the result, Mr. Churchill cannot refuse to reply to Unifund’s interrogatory, or to provide copies of medical reports, based on litigation privilege or lack of relevance of the information. The Implied Undertaking Rule [ 26 ] The implied undertaking rule is set out in Juman v.

Doucette , 2008 SCC 8 , [2008] 1 S.C.R. 157 : [1] The principal issue raised on this appeal is the scope of the “implied undertaking rule” under which evidence compelled during pretrial discovery from a party to civil litigation can be used by the parties only for the purpose of the litigation in which it was obtained. … [4] Thus the rule is that both documentary and oral information obtained on discovery, including information thought by one of the parties to disclose some sort of criminal conduct, is subject to the implied undertaking.

It is not to be used by the other parties except for the purpose of that litigation, unless and until the scope of the undertaking is varied by a court order or other judicial order or a situation of immediate and serious danger emerges. [Italics in the original.] [ 27 ] In considering the operation of this rule, I begin with the fundamental proposition that “[t]he ultimate aim of any trial, criminal or civil, must be to seek and to ascertain the truth” ( Imperial Oil v. Jacques , supra , at paragraph 24 ).

Similarly, in Juman , Binnie J., for the Court, reiterated: [24] … [A] proper pre-trial discovery is essential to prevent surprise or “litigation by ambush”, to encourage settlement once the facts are known, and to narrow issues even where settlement proves unachievable. [ 28 ] The rationale for, and principles related to, the implied undertaking rule are discussed in Juman .

First, Binnie J. explained: [25] … The answers and documents are compelled by statute solely for the purpose of the civil action and the law thus requires that the invasion of privacy should generally be limited to the level of disclosure necessary to satisfy that purpose and that purpose alone. … The general idea, metaphorically speaking, is that whatever is disclosed in the discovery room stays in the discovery room unless eventually revealed in the courtroom or disclosed by judicial order. [26] There is a second rationale supporting the existence of an implied undertaking.

A litigant who has some assurance that the documents and answers will not be used for a purpose collateral or ulterior to the proceedings in which they are demanded will be encouraged to provide a more complete and candid discovery. … [27] For good reason, therefore, the law imposes on the parties to civil litigation an undertaking to the court not to use the documents or answers for any purpose other than securing justice in the civil proceedings in which the answers were compelled (whether or not such documents or answers were in their origin confidential or incriminatory in nature). … [Italics in the original.] [ 29 ] As to the effect of legislation on the implied undertaking rule, Binnie J. wrote: [39] The implied undertaking rule at common law, and in those jurisdictions which have enacted rules, more or less codifying the common law, is subject to legislative override . … (Emphasis added.) This principle would be relevant to the operation of rules 31 and 34, being subordinate legislation, insofar as they require the production of medical reports. [ 30 ] As discussed in Juman , where the implied undertaking rule is engaged, an application may be made to the court to modify or

relieve against the undertaking: [32] An application to modify or relieve against an implied undertaking requires an applicant to demonstrate to the court on a balance of probabilities the existence of a public interest of greater weight than the values the implied undertaking is designed to protect, namely privacy and the efficient conduct of civil litigation. … [ 31 ] Finally, as stated by Binnie J. in Juman : [41] … An undertaking implied by the court (or imposed by the legislature) to make civil litigation more effective should not permit a witness to play games with the administration of justice … . [ 32 ] In this case, it is difficult to see how the implied undertaking rule is engaged.

A medical report, being factual in nature, would be neutral insofar as encouraging the provision of complete and candid discovery, one of the rationales for the rule. Further, the proposition stated by Binnie J. that “whatever is disclosed in the discovery room stays in the discovery room” loses its impact and relevance when considered in the context of the factual nature of medical reports and the operation of rules 31 and 34. [ 33 ] Further, insofar as the rule could be said to be engaged, it would be overridden by the requirements of rules 31 and 34, which constitute subordinate legislation.

Any medical report obtained for purposes of the action against the driver of the other vehicle would have been provided to Mr. Churchill pursuant to rule 34.04(1). Although restricted to the situation where Mr. Churchill is required to submit to a medical examination under rule 34.01, rule 34.04(2) entitles Unifund to receive copies of “a report of any examination of [Mr. Churchill] previously made by any medical practitioner, relating to any relevant mental or physical condition of the party” and, in addition, such report must be provided to the medical practitioner examining Mr.

Churchill at Unifund’s request. [ 34 ] Finally, as discussed in Morrissey in the context of litigation privilege, disclosure of the plaintiff’s relevant medical reports constitutes factual information that is necessary for ascertaining the truth, encouraging settlement and narrowing the issues. In short, there is no public policy reason for application of the implied undertaking rule in these circumstances.

This may be contrasted with the situation in Juman where the Court was considering information obtained in civil discovery proceedings for use in a criminal prosecution where considerations such as self-incrimination may arise. [ 35 ] It follows that Mr. Churchill cannot rely on the implied undertaking rule to refuse to reply to the interrogatory and to provide the relevant medical reports.

SUMMARY AND DISPOSITION [ 36 ] In

summary, the applications judge erred in applying the implied undertaking rule, thereby concluding that the medical reports sought by means of the interrogatory could not be disclosed because their use was strictly confined to the litigation involving the driver of the other vehicle. [ 37 ] Applying rules 31 and 34 of the Rules of the Supreme Court, 1986 , and the relevant principles of law, the conclusion follows that the medical reports referenced in the interrogatory are relevant and that neither litigation privilege nor the implied undertaking rule applies to prevent their disclosure. [ 38 ] In the result, (1) the documents referenced in the interrogatory must be included in the list of documents provided by Mr.

Churchill under rule 32.01,

(2) Mr. Churchill is required to answer the interrogatory, and (3) he is required to provide to Unifund a copy of any medical reports referenced in the interrogatory. [ 39 ] Accordingly, I would grant leave to appeal, allow the appeal and order that Unifund is entitled to its costs under column 3 of the scale of costs in this Court and in the court appealed from. Appeal allowed.