2020 ONSC 904, 2020 ONSC 904

CITATION : Keedi et al v. The Wawanesa Mutual Insurance Company et al, 2020 ONSC 904 COURT FILE NO.: 18-78330 MOTION HEARD: November 7, 2019 SUPERIOR COURT OF JUSTICE – ONTARIO RE: Matthew Keedi and Dani Khoury v. The Wawanesa Mutual Insurance Company, Canada Brokerlink Inc. and Canada Brokerlink (Ontario) Inc. BEFORE: Master Marie Fortier COUNSEL: David Cutler, for the plaintiffs Matthew Keedi and Dani Khouri Douglas Treilhard, for the defendants The Wawanesa Mutual Insurance Company, Canada Brokerlink Inc. and Canada Brokerlink (Ontario) Inc.

R E A S O N S F O R D E C I S I O N Introduction 1 - The defendants The Wawanesa Mutual Insurance Company, Canada Brokerlink Inc. and Canada Brokerlink (Ontario) Inc. seek an order excluding the plaintiffs from each other’s examination for discovery as well as an order that each plaintiff’s oral discovery evidence not be communicated to the other until the examinations for discovery of both plaintiffs are complete.

Background 2 - The plaintiffs sue for losses arising out of an alleged theft of personal property from their residence located at 651 Ballycastle Crescent (“the residence”) and the subsequent denial of the insurance claim with respect to the loss. The residence was a new build that was almost completed. 3 - The plaintiffs Matthew Keedi (“Mr. Keedi”) and Dani Khouri (“Mr. Khouri”) were business partners and friends.

The plaintiffs intended to live in the residence for a period of time, sell it and divide the net proceeds. 4 - The defendant, The Wawanesa Mutual Insurance Company (“Wawanesa”) is the insurer to which the claim for indemnification was made. The defendant Canada Brokerlink Inc. and Canada Brokerlink (Ontario) Inc. (collectively referred to as “Brokerlink”) is the insurance broker that arranged for the issuance of the Wawanesa policy. 5 - On April 10, 2017, Mr. Keedi retained Brokerlink to secure insurance coverage for the residence. Brokerlink then placed the insurance coverage with Wawanesa. 6 - Mr.

Khouri moved into the residence in early April 2017 and left on April 15, 2017 to attend a wedding in Lebanon. It would appear that during his absence, the residence was broken into and items allegedly valued at approximately $60,700.00 belonging to Mr. Khouri were stolen. 7 - A claim was made to Wawanesa on April 24, 2017 relating to the theft of Mr. Khouri’s personal property. 8 - The claim was subsequently refused by Wawanesa.

In a letter dated July 17, 2017 Wawanesa denied the insurance claim for the following reasons: i- The policy excludes coverage for the loss or damage caused by theft of property in or from a dwelling under construction

until the dwelling is completed and ready to be occupied; ii- Khoury would not be considered as an insured as defined by Keedi’s home insurance policy; and iii- The insurance policy stipulates that the property of roomers or boarders who are not related to Keedi is not covered. 9 - I note that the insurer did not contest the value of the property loss nor allege fraud or bad faith against the plaintiffs. 10 - The plaintiffs commenced this action in November 2018. 11 - On December 27, 2018, following the close of pleadings, plaintiffs’ counsel forwarded a discovery plan to counsel for the defendants.

E-mails were exchanged between counsel with respect to discovery planning and as of January 28, 2019, an agreement was reached on discovery planning and scheduling issues including the scope of documentary production, the timing of the parties’ exchange of their affidavits of documents and the timing for the examinations for discovery. 12 - The parties’ unsworn affidavits of documents and

Schedule A productions were delivered in February 2019 and further emails were exchanged between counsel confirming the remaining discovery planning issues, including the order of the examinations for discovery of the parties. 13- The examinations for discoveries of all parties were scheduled for April 2, 2019.

As had been agreed by counsel, the defendants’ representatives were examined first, to be followed by the plaintiffs in no particular order as between them. 14- During the examination of the representative for Wawanesa on April 2, 2019, it was revealed that she had taken certain photographs of the residence, and that Wawanesa was relying on those photographs for their denial of coverage for the loss. 15- As the photographs had not been previously disclosed or produced by the defendants, the discoveries of the plaintiffs did not take place on that day.

The parties agreed that the plaintiffs’ examinations for discovery would be rescheduled to a mutually convenient date, after the defendants produced the photographs and the plaintiffs had an opportunity to review them.

16- Following the production of the photographs on April 12, 2019, counsel for the defendant sought dates to reschedule the plaintiffs’ discoveries.

There was no mention of excluding the plaintiffs from one another’s examination for discovery. 17- On April 23, 2019, counsel for the plaintiffs was notified that the defendants’ file was being transferred to a colleague in the firm and rescheduling arrangements for discoveries would follow. 18- On April 29, 2019, when counsel for the plaintiffs attempted to reschedule the plaintiffs’ discoveries, he was advised that the defendants required that each plaintiff be excluded from the other’s examination.

Counsel for the plaintiffs refused. 19- According to counsel for the plaintiffs, as of the April 2, 2019 discovery date, agreement had been reached on all discovery planning issues. The matter of excluding the plaintiffs from one another’s examination for discovery was never raised during the three-month discovery planning period that preceded the April 2, 2019 discovery date . Issue : 20- Should the court order that the plaintiffs be examined for discovery individually, without the other plaintiff being present?

Defendants’ position 21- The defendants argue that the plaintiffs’ credibility is a central issue in this proceeding and as such the interests of justice require that the defendants be permitted to test each plaintiff’s independent recollection of the facts in issue, untainted by prior knowledge of the questions posed to, and answers given by, the other plaintiff. Accordingly, each plaintiff should be examined for discovery without the other plaintiff being present.

Plaintiffs’ position 22- The plaintiffs oppose the exclusion order sought by the defendants on the following grounds: i- It is contrary to the discovery plan agreed to by the parties; ii- the credibility of the plaintiffs as co-parties, will not be a central issue at trial; iii- The defendants have not discharged their evidentiary burden of establishing that an exclusion order is necessary in the circumstances of this case; and iv- Parties have a presumed or prima facie entitlement to attend examinations for discovery in their proceedings.

Disposition 23- For the reasons outlined below, the defendants’ motion is dismissed. Exclusion of Co-parties at Examinations for Discovery

The Law 24- The leading case with respect to the exclusion of co- parties at examinations for discovery is the decision of the Divisional Court in Lazar v TD General Insurance Co . [1] 25- Lazar was an insurance case concerning the alleged failure of the insurer to pay the full amount of a contents claim arising out of a residential fire loss. The defendant sought to have the plaintiffs excluded from each other’s examination for discovery.

The Divisional Court determined that an exclusion order should be made, finding that “the credibility and reliability of the Respondents’ evidence will be the central issue at the trial and the primary factor which will affect recovery under the policy”. [2] 26- The following principles can be drawn from the decision in Lazar : a. The court has a broad discretion to exclude parties from the examination room during the examination of other parties in certain circumstances. [3] b. This discretion must be exercised upon proper legal principles to secure the ends of justice. [4] c.

To secure the ends of justice, a party cannot be excluded from the examination for discovery of another party except for cause. What constitutes cause will depend on the particular situation and the circumstances of each case. [5] d. The party seeking exclusion has the onus to demonstrate that exclusion is necessary to meet the ends of justice. [6] e. It is not necessary for a party to assert specific prejudice in order to be allowed

to be present for a co-party’s examination for discovery. [7] f.

Factors to be considered in determining whether the moving party has discharged its onus include but are not limited to the following: i. whether the co-parties have common interests; ii. whether the co-parties are represented by the same lawyer; iii. whether it appears that the examinations for discovery of co-parties will cover the same grounds; iv. whether credibility will be a factor or an issue in the case; v. whether there is a risk that evidence will be tailored or parroted; vi. whether a party is likely to be intimidated; vii. whether the proceedings are likely to be disturbed or disrupted; viii. whether there would be prejudice to the excluded party ix. generally, whether the ends of justice require the exclusion. [8] g.

Direct evidence of a propensity to tailor evidence is not required. Rather, inferences can be drawn from other factors such as those outlined in subparagraph f- above, that a risk of tailored evidence exists. [9] h. The risk that evidence will be tailored or parroted will exist where co-parties intend to be present for each other’s examination in a case where credibility is a central issue, even in the absence of a conscious intention on the part of the examinees to parrot each other’s evidence. i.

An exclusion order will reduce the risk of a co-party unconsciously tailoring his or her evidence in a desire to achieve consistency where credibility of co-parties with the same interest will be the central issue at the trial. [10] j. Whether credibility will be a central issue at trial can be determined from the pleadings and the uncontested evidence before the Motion Judge. [11] k.

Where there is a risk that the evidence of the co-parties will be tailored if an exclusion order is not made, the right of co-parties to attend each other’s examinations for discovery must give way to the opposing party’s right to use the discovery to its fullest potential and the obtain the evidence of the co-parties without any possible collusion. [12] Credibility The Defendants’ position

27- The defendants argue, that as was the case in Lazar , the credibility and reliability of the Plaintiffs’ evidence will be the central issue at trial and the primary factor which will affect recovery under the policy and accordingly, an exclusion order should be granted. 28- In support of their argument the defendants contend that, in addition to the factors outlined in their letter of July 17, 2017 this case is about:

a) whether the alleged loss occurred at all;

b) whether the chattels allegedly stolen are correctly valued at $60,700.00; and

c) whether Mr. Keedi or Mr.

Khouri owned the chattels that were allegedly stolen. 29- The defendants argue that there is a risk that the evidence of the co-parties will be tailored if an exclusion order is not made. 30- The defendants further argue that there would be no prejudice to the excluded party as each party will be able to review the other’s evidence in transcript form as soon as examinations for discovery are complete . 31- The defendants have asked the court to take an orthodox approach and look only to the pleadings to determine what the case is about and whether credibility will be the central issue at trial.

In particular, the defendants rely on paragraphs 23 and 24 of their statement of defence in support of the argument that the central issues at trial will revolve around whether the loss occurred at all, the quantum of the contents claims and the ownership of the chattels. Paragraphs 23 and 24 of the statement of defence state: 23: The defendants deny that the plaintiffs suffered a loss as a result of any, breach of contract, breach of duty, or negligence on the part of the defendants, which is not admitted but denied, and put the plaintiffs to the strict proof thereof.

24: Further, if the plaintiffs sustained any damages or losses, at the times and place pleaded in the Statement of Claim, which is not admitted but specifically denied, such damages of losses were caused or contributed to by the negligence of the plaintiff, Keedi, the particulars of which include, but are not limited to, the following: i. He failed to inform Brokerlink that the premises was under construction; ii.

He failed to inform Brokerlink that the Plaintiff, Khoury, would be a tenant and/or roommate and/or additional occupier, sharing the premises in any way, or that he wished for the belongings of the plaintiff, Khoury to be covered under the terms of the policy; iii. he failed to advise Brokerlink that he wished Khoury to be a named insured on the policy; and iv. such further and other particulars of negligence that are as of yet unknown but shall be proven at trial of this action.

The Plaintiffs’ Position 32- The plaintiffs argue, that in an attempt to bring this case within the ambit of Lazar, the defendants have mischaracterized what this case is really about. Although the plaintiffs agree that Lazar is the leading case with respect to the exclusion of co-parties at examinations for discovery, they argue that this case can be distinguished from Lazar on the facts. In particular, the sole issue in Lazar was the quantum of the contents claim. The credibility of the plaintiffs in Lazar was central because they provided three different contents lists, each

with different items and totals and they had very little evidence to support their significant claim. 33- The plaintiffs submit that Wawanesa denied the plaintiffs’ insurance claim for the reasons set out in their letter of July 17, 2017 as outlined in paragraph 8 above.

The plaintiffs argue that it is incorrect for the defendants to suggest that there are central issues with respect to whether the loss took place, the value of the property that was stolen, or the ownership of the property that was stolen. 34- The central issue is whether Brokerlink met the standard of care in placing an appropriate policy of insurance that would respond to the plaintiffs’ loss and not the plaintiffs’ credibility. 35- The plaintiffs submit that they have an inherent and fundamental right to be present at one another’s examination for discovery.

The defendants have not discharged their onus to present sufficient evidence of the factors in Lazar to overcome the fundamental rights enjoyed by the plaintiffs. Analysis and disposition 36- As held in Lazar, “where the credibility of co-parties with the same interest will be the central issue at trial, an exclusion order will attenuate the risk of a co-party unconsciously tailoring his or her evidence in a desire to achieve consistency”. [13] Whether credibility will be a central issue can be determined from the pleadings and the uncontested evidence

before the court on the motion for exclusion [14] and not just the pleadings as argued by counsel for the defendants. 37- In addition to the pleadings, the following documents formed part of the record on the motion before me: • Transcripts of telephone audio recordings between the plaintiff Keedi and Brokerlink in respect to the insurance coverage and reporting the loss; • The plaintiffs written statements provided to the defendants shortly after the loss took place; • Copy of the letter from Wawanesa to Keedi dated July 17, 2017 denying the insurance claim; • Correspondence between counsel for the plaintiffs and the defendants dated September 12, 2018 and October 11, 2018; • Copy of proof of loss dated September 27, 2018. 38- In contrast to the factual scenario in Lazar , there is nothing on the record before me that brings into question whether or not the loss actually took place, any issue with respect to the value of the property that was stolen, or any issue with respect to the ownership of the property that was stolen.

Moreover, in my view, paragraphs 23 and 24 of the Statement of Defence, that are relied on by the defendants, are boilerplate denials. 39- Rather, in my view, the central issue, according to the record is whether Brokerlink met the standard of care in placing an appropriate policy of insurance that would respond to the plaintiffs’ loss .

That being the case, in my opinion, the credibility of the plaintiffs as co-parties will not be a central issue at the trial nor the primary factor which will affect recovery under the policy. 40- Some of the factors outlined in Lazar are present in this case, for example, the co-plaintiffs are represented by the same lawyer and they have common interests. On the whole, however, on a review of the record before me, I find that the relevant factors do not favour an exclusion of the plaintiffs from each others’ examinations.

In particular: • The examinations for discovery of the co-parties will not necessarily cover the same ground; • As indicated above, in my view the credibility of the plaintiffs will not necessarily be a central issue at the trial; • There is little risk that the plaintiffs will tailor or parrot their evidence as there is comprehensive evidence in the form of telephone recordings and lengthy signed statements documenting the plaintiffs’ evidence; • There is no issue of witness intimidation or potential disruptive conduct.

41- In my view, the defendants have not discharged their onus to demonstrate that an order excluding the plaintiffs from each other’s examination for discovery is necessary to meet the ends of justice. This is a case where the court should give effect to the parties’ prima facie entitlement to be present throughout their entire proceedings. The Discovery Plan 42- It is undisputed that a discovery plan was agreed to by the parties. What is in dispute is whether there was an agreement, implied or otherwise, that the plaintiffs would attend each other’s examination for discovery.

Plaintiffs’ position 43- The plaintiffs argue that a discovery plan was agreed to and incorporated all discovery planning issues. According to the plaintiffs (and conceded by the defendants) at no time prior to April 29, 2019 had the defendants raised the notion of excluding the plaintiffs from one another’s examination for discovery. 44- The plaintiffs maintain that there was an implied agreement that the discoveries were going to proceed in accordance with the discovery plan, which did not include a term that the plaintiffs be excluded from each other’s examination for discovery.

Defendants’ position 45- The defendants argue that the issue of upholding and respecting the discovery plan is a red herring. Although the defendants admit that there was a discovery plan, there was never any agreement, express or implied about whether the plaintiffs could attend each other’s discoveries – it was not addressed.

Although counsel for the defendants concedes that it probably would have been good form to raise the issue in the course of negotiating the discovery plan, they have brought the matter forward to avoid first raising the issue at the commencement of the plaintiffs’ examinations for discoveries. 46- While the defendants acknowledge that they have the onus to demonstrate that exclusion is necessary to meet the ends of justice, they submit that it is a “leap too far” to conclude that the co-plaintiffs are entitled to sit in on each other’s examination for discovery.

Analysis and disposition 47- As indicated above, the parties agree that there was a discovery plan that was agreed to by the parties and followed until April 29, 2019 when the issue arose regarding the exclusion of the plaintiffs from each other’s examination for discovery. 48- The question becomes whether it was an implied term of the discovery plan that the plaintiffs attend each other’s examinations for discovery absent the specific term that they be

excluded. I conclude that there was such an implied term in the absence of any stipulation to the contrary. 49- In Sultana v. Veley [15] the Court enforced a discovery plan dealing with the order of discoveries and found that the defendants “had by their conduct given their implied agreement to the plaintiff’s discovery plan” [16] on the basis of that plan having been circulated and discovery arrangements discussed by the parties and acquiesced in by the defendants. As stated by Master Graham at para 17: To summarize, counsel for the Veley/ThyssenKrupp defendants did not object to the plaintiff's proposed discovery

schedule until 12 weeks after that

schedule was first proposed on March 15, 2011, seven weeks after the plaintiff's discovery plan was circulated on April 19, 2011 and 13 days before examinations for discovery were to commence.

In failing to respond to the plaintiff's discovery plan prior to June 9, 2011, defendants' counsel had acquiesced to the terms of that plan, which she was well aware of, given the acknowledgment in her letter that there were "previous arrangements" with respect to the timing of examinations for discovery. 50- In my view, the exclusion of co-parties from each other’s examinations for discovery is the exception and not the rule.

Indeed, the party seeking the exclusion must demonstrate that exclusion is necessary to meet the ends of justice. [17] Absent an explicit term in the discovery plan excluding the plaintiffs from each other’s examinations for discovery or court order, in my opinion, it can be implied that the plaintiffs would attend each other’s discovery.

51- The court in McCallum v. Thames Valley district School Board et al. [18] rejected the defendant’s attempt to introduce a new term to the discovery plan after the discovery plan had been agreed to and not updated in accordance with the rules.

In that case, the defendants sought to examine an 11- year-old plaintiff for discovery, after the circulation of a discovery plan indicating that the child’s litigation guardian would be examined, and not the child herself. 52- In the matter before me, there was a discovery plan that was agreed to by the parties and did not include the term that the plaintiffs be excluded from each other’s examination for discovery. As noted, all parties have a prima facie entitlement to attend examinations for discovery in an action.

In my view, it was an implied term of the discovery plan that the plaintiffs attend each other’s examinations for discovery absent the specific term that they be excluded. Moreover, the adjournment of the plaintiffs’ discoveries caused by the failure of the defendants to adhere to the Rules of Civil Procedure should not provide the defendants with the opportunity to inject a new term in the discovery plan as to how the plaintiffs’ rescheduled examinations for discovery are to be conducted. 53- Discovery planning is an important procedure that must be adhered to.

In the present case, the discovery plan was agreed to by the parties pursuant to a discovery planning process that took place over the course of 4 months. It should be respected.

C onclusion 54- For the reasons outlined above, the defendants’ motion is dismissed. 55- If the parties cannot agree on costs, they may file written submissions not exceeding three pages, exclusive of their respective bills of costs. If necessary, the plaintiffs shall file their costs submissions within 20 days of the release of this decision. The cost submissions of the defendants shall be filed within 10 days thereafter. ___________________________ Master Fortier DATE: February 11, 2020