GATIEN v. LALONDE ET AL, 2017 ONSC 853

CITATION: GATIEN v. LALONDE ET AL, 2017 ONSC 853 COURT FILE NO.: 10-48223 DATE: 2017/02/03 MOTION HEARD : December 06, 2016 SUPERIOR COURT OF JUSTICE - ONTARIO RE: GATIEN v. LALONDE et al BEFORE: Master Fortier COUNSEL: Eric Appotive, for the Plaintiff Joel Dubois, for the Defendants HEARD: December 06, 2016 REASONS FOR DECISION Introduction [ 1 ] This is a motion brought by the defendants to strike out paragraphs and exhibits from the plaintiff’s affidavit (Gatien affidavit) sworn June 29, 2016 as they allegedly pertain to communications made in furtherance of settlement.

Background [ 2 ] On May 31, 2016, the Court granted leave to the plaintiff to discontinue this action against the defendants without prejudice to the defendant’s right to seek costs. [ 3 ] As a result of the discontinuance, the defendants have brought a motion for costs of this action (Costs Motion). [ 4 ] In response to the Costs Motion, the plaintiff delivered the Gatien affidavit, which contains a number of references and correspondence between counsel with respect to the potential settlement of the action, including costs. [ 5 ] The defendants are seeking an order striking out the following paragraphs and exhibits from the Gatien affidavit:

a) paragraph 18 and exhibit 16;

b) paragraph 21 and exhibit 20

c) paragraph 22 and exhibit 21

d) paragraph 23 and exhibit 22 and

e) paragraph 24 and exhibit 23. Issue [ 6 ] Whether settlement privilege in the context of a motion for costs applies to correspondence extending offers to settle, revoking offers to settle or advising that a party requires the payment of costs in order to consider the settlement of an action.

Position of the Parties [ 7 ] According to the defendants, the above noted paragraphs in the Gatien affidavit contain without prejudice communications made in furtherance of settlement and are protected by settlement privilege. [ 8 ] It is the plaintiff’s position that the communications referred to in the Gatien affidavit have been properly put before the court in the context of a motion for costs and the factors to be considered under Rule 57. 01 (1).

Discussion and Analysis [ 9 ] The defendants argue that the paragraphs and exhibits that they are seeking to strike are without prejudice communications made in furtherance of settlement and are protected by settlement privilege and are therefore inadmissible. The defendants rely on the case of Sable Offshore Energy Inc. v Ameron International Corp. , 2013 SCC 37 at para 2 , where Abella J. held: “The purpose of settlement privilege is to promote settlement.

The privilege wraps a protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of these negotiations are inadmissible”. [ 10 ] The plaintiff argues that Sable Offshore was not decided in the context of a motion for costs following the conclusion of the action but rather in the context of on-going litigation.

In the present case, the issue of liability has been dealt with by way of discontinuance of the action and permitting the evidence of the correspondence extending offers to settle etc. on the Costs Motion does not undermine settlement privilege.

In fact, parties expect written offers to be considered as one of the factors under Rule 57.01 (1). [ 11 ] The defendants state that the question of entitlement to costs will be determined in the context of the pending Costs Motion and that the plaintiff is attempting to put before the trier of fact privileged communications which relate to costs, being the same issue that the trier of fact will have to decide on the Costs Motion. [ 12 ] I do not agree with the defendants. The issue of liability in the action has been dealt with by way of a discontinuance of the action against all of the defendants.

There is no live issue between the parties on the merits of the action but rather the issue before the court is a motion for costs following the proceeding. [ 13 ] Motions for costs under Rule 23. 05 (1) are governed by Rule 57 .01 (1) of the Rules of Civil Procedure ( Hession v. Black Construction Services Inc . 2015 ONSC 7047 at para 43 ).

Rule 57.01 (1) explicitly contemplates the consideration of written offers to settle when exercising its discretion under s. 131 of the Courts of Justice Act to award costs. [ 14 ] Rules 23. 05 (1) and 57.01(1) of the Rules of Civil Procedure respectively read as follows: COSTS OF DISCONTINUANCE, DEEMED DISMISSAL 23.05

(1) If all or part of an action is discontinued, any party to the action may, within thirty days after the action is discontinued, make a motion respecting the costs of the action. GENERAL PRINCIPLES 57.01(1) Factors in discretion – In exercising its discretion under

section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or in to contribute made in writing. [ 15 ] The paragraphs and exhibits in the Gatien affidavit that the defendants seek to strike refer to correspondence extending offers to settle, revoking offers to settle and advice that a party will only settle on a with costs basis. In my view, these paragraphs and exhibits clearly refer to offers to settle and would be properly before the court for consideration under Rule 57.01(1) on a motion for costs under

Rule 23.05 (1). This type of correspondence does not undermine settlement privilege as it is explicitly contemplated as admissible and relevant on motions for costs. [ 16 ] It is noteworthy that the defendant is not seeking to strike a number of other paragraphs and exhibits in the Gatien affidavit that refer to offers to settle. It is the plaintiff’s position that the court on the Costs Motion should be able to look at the exchange of offers in its entirety. I agree.

Conclusion [ 17 ] For the reasons outlined above, the defendant’s motion to strike paragraphs 18, 21, 22, 23, 24 and exhibits 16, 20, 21, 22 and 23 from the Gatien affidavit is dismissed. [ 18 ] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the plaintiff within 15 days of the release of these Reasons for Decision followed by the defendants’ submissions within a further 15 days. Written submissions are to be no more than 3 pages in length each. ___________________________ Master Marie Fortier DATE: February 03, 2017