CITATION: Reis v. CIBC
Mortgages Inc., 2011 ONSC 2309
COURT
FILE NO.: 06-CV-323372
DATE
HEARD: April 7, 2011
ENDORSEMENT
RELEASED: April 18, 2011
SUPERIOR
COURT OF JUSTICE - ONTARIO
RE: REIS v.
CIBC MORTGAGES INC.
BEFORE: Master R. Dash
COUNSEL: Ernest J. Guiste for the plaintiff
Jeff C. Hopkings for the Defendant
REASONS FOR DECISION
[1] This is a motion by the plaintiff under rule 60.12 to strike the
statement of defence for breach of a court order to answer questions asked on
an examination for discovery in writing and to serve a further and better
affidavit of documents with a particularized Schedule B. By the time the motion
was heard a supplementary affidavit of documents had been provided and the
questions ordered had been answered. The primary thrust of the motion was in
regard to the adequacy of the supplementary affidavit of documents and of
answers to follow up questions asked to the answers provided to the ordered questions.
THE LITIGATION
[2] This action, arising out of an alleged wrongful dismissal
occurring in June 2005, was commenced on December 1, 2006. As initially pled
the plaintiff alleged a campaign of harassment to force her to resign which
resulted in her suffering from situational stress disorder. A Human Rights
complaint (the “Complaint”) had been lodged, but after this action was
commenced, the Human Rights Tribunal dismissed the complaint on August 28, 2009
because of duplication in the two proceedings.
[3] In this action the plaintiff decided to conduct her examination
for discovery of the defendant in writing pursuant to Rule 35 and served her
written questions on June 20, 2008. It is not clear from the materials before
me when the defendant answered the questions, but a motion was brought before
Master Haberman to compel the defendant to answer questions refused and to
serve a further and better affidavit of documents. The plaintiff also sought to
amend the statement of claim to include a plea that the defendant’s motivation in
dismissing her in the manner it did, was on account of the objective of the plaintiff’s manager, Ms. Luu, of replacing all racial minorities with “brown” or “dark” skin in
her area, including the plaintiff who was of African-Canadian background, with
“Northern Asian” or “light skinned” persons.
THE ORDER OF
MASTER HABERMAN
[4] On April 20, 2010 Master Haberman permitted the amendments. She
ordered that 11 specific questions from the defendant’s written examination for
discovery be answered within 30 days. A number of other refusals were either not ordered to be
answered or were withdrawn. In her endorsement (but not in the formal order)
she granted the plaintiff 10 days from receipt of responses to ask proper
follow up questions as well as questions arising from the amendments. (Although she set no time limit for answering the further questions, rule 35.02 require written answers in Form 35B within 15 days.) Master
Haberman ordered each party to serve a further and better affidavit of
documents within 30 days. She indicated that privileged documents were to be
properly “delineated” but provided no other direction as to their content. She
also extended the set down deadline to June 30, 2010 (the fourth such
extension). No costs were ordered.
[5] The plaintiff set the
action down as ordered on June 30, 2010 and did not seek a further extension. The defendant does not
raise rule 48.04(1) as a bar to this motion, while reserving its rights in the
event of further motions.
SUPPLEMENTARY AFFIDAVIT OF DOCUMENTS AND FOLLOW UP QUESTIONS
[6] On May 12, 2010 the defendant served a supplementary affidavit
of documents sworn April 26, 2010, within the 30 day time limit set by Master
Haberman. The defendant added three additional documents to Schedule A, but
Schedule B was boiler plate, not delineating
the documents over which privilege was claimed, contrary to Master
Haberman’s order.
[7] On June 23, 2010 the defendant served answers to 9 questions
ordered by Master Haberman. (Although Master Haberman ordered answers to 11
questions, this discrepancy was not
explained, and appears not to be an issue.) The written answers were not in
Form 35B (i.e. not sworn). Sworn responses in Form 35B were not received until
September 27, 2010. Both the unsworn and sworn answers were served beyond the
30 day deadline ordered by Master Haberman.
[8] On June 27, 2010 the
plaintiff served follow up questions in writing to the answers given to the nine questions ordered by
Master Haberman plus seven sub-follow up questions to two of the answers. On June 24, 2010 the
plaintiff also served 24 questions in writing arising from the amendments to
the statement of claim.
[9] On September 27, 2010, three months after the questions were
asked, the defendant served sworn
answers to the follow up questions. By the time this motion was served in
November, the defendant had not yet answered the 24 questions arising out of
the amendments.
THE MOTION TO STRIKE THE DEFENCE
[10] This
motion brought by the plaintiff is to strike the statement of defence for
failure to comply with Master Haberman’s order, or in the alternative to order
compliance. The motion was served in November 2010. By that date, the
supplementary affidavit of documents had been served within the deadline
ordered by Master Haberman, but it was not in compliance with the order as
there was no particularized Schedule B. Unsworn answers had been delivered to
questions ordered by Master Haberman on June 23, approximately one month past
the deadline, but sworn answers were not served until another three months had
passed. By the time this motion was served the defendant had answered follow up
questions to the answers to questions ordered by Master Haberman, but had not
yet served answers to the questions on the amendments.
[11] In response to service
of the notice of motion: (1) The defendant prepared answers to the questions on the amendments on December
15, 2010, six months after they were asked. Although Master Haberman had not
set a deadline, it was beyond the deadline in rule 35.02; and (2) The defendant
prepared a revised supplementary affidavit of documents sworn February 8, 2011,
just prior to the return date of February 18, 2011. Schedule B now delineated
the document over which privilege was claimed, but the sufficiency of the
description was in issue.
[12] On the return of the motion before me the plaintiff had two
complaints: (1) The supplementary affidavit of documents was deficient, in
particular the description of the Schedule B document; and (2) The answers to
the follow up questions to the answers given to questions ordered by Master
Haberman were improper or inadequate.
[13] Although the specific
relief requested in the notice of motion was to dismiss for breach of Master
Haberman’s order, which had been complied with by the date of this hearing, I
agreed to hear argument on the adequacy of the supplementary affidavit of
documents and of the answers to the follow up questions to answers given to the
questions ordered by Master Haberman. The motion was booked for one hour but
after approximately two hours of argument there was no time to deal with the
answers to the questions asked on the amendments. If the plaintiff wishes to
pursue any relief arising out of those answers a fresh motion will be necessary.
THE
INVESTIGATIVE NOTES AND PRIVILEGE
[14] The item added to Schedule B of the supplementary affidavit of
documents as well a number of the follow up questions deal with production of
notes made by Christine Warden, the employee of the defendant who was
instructed by an in-house CIBC lawyer to conduct and who did conduct an internal investigation
into the Human Rights complaint after the Complaint was served on the
defendant. She interviewed a number of persons, including Ms. Luu, as part of
the investigation and memorialized her interviews of them in notes. According to Ms.
Warden, the sole purpose for her investigation and preparation of the notes
were to obtain legal advice from CIBC legal counsel and be used by them in
responding to the Complaint. Ms. Warden’s notes were in fact either given to
Mark Crestohl, then CIBC Senior Legal counsel, or were utilized by Ms. Warden
in creating a draft response which was given
to Mr. Crestohl. The notes, or the draft response prepared from the
notes, were utilized by Mr. Crestohl in preparing the defendant’s response to
the Human Rights Commission dated March 17, 2006. The defendant claims both
solicitor-client and litigation privilege over the notes, both in the
supplementary affidavit of documents and in answers to follow up questions.
[15] The existence of these notes was not disclosed in the original
affidavit of documents served in this action, either in Schedule B or
elsewhere. That was clearly improper. They were not disclosed until after
Master Haberman’s order and then not until this motion was served.
[16] The defendant has been unable to locate the original
handwritten notes but
an electronic transcription was
located and a print-out was provided for my examination at the hearing of the
motion pursuant to rule 30.06(d). Apparently Ms. Warden recalls giving the
notes to Sheryl Johnson, a lawyer at Grosman, Grosman & Gale, who represent
the defendant in this action, however Ms. Johnson does not recall receiving the
notes from Ms. Warden. The defendant continues to look for the notes, however
contrary to the plaintiff’s assertions I do not see this as misconduct on the
part of the defendant. In any event, the electronic version is available if I
were to determine that privilege does not apply.
[17] I am satisfied that the
notes were prepared for confidential communications between the defendant (as represented by Ms. Warden)
and its in-house lawyer for the purpose of receiving legal advice about the
Compliant and as such are protected by solicitor-client privilege unless
waived. (See General Accident Assurance
Co. v. Chrusz (1999) 45 O.R. (3d) 321 (C.A.) at paragraph 89 and Shibish v. Honda, 2010 ONSC 3770 (SCJ)
at paragraph 8.) Furthermore, the notes were prepared following receipt of the
Complaint and therefore at a time when litigation was not only reasonably
contemplated, but was in fact in existence, and were prepared at the request of
legal counsel for the dominant purpose of enabling counsel to respond to that
litigation. (See Kennedy v. McKenzie,
[2005] O.J. No. 2060 (S.C.J.) at paragraph 20.) As a result the notes are
protected by litigation privilege unless waived. Although the Complaint
proceeding has been concluded, I am of the view that given the commonality of
allegations and parties to the Complaint and to the current litigation, that
the Complaint and this action are closely related proceedings as discussed in Blank v. Canada, [2006] 2 S.C.R. 319 at
paragraphs 36 and 39. As such litigation privilege survives the conclusion of
the Complaint proceeding and continues during the life of the current action.
[18] The plaintiff argues
however that both solicitor-client and litigation privileges have been waived because, in answer to the
following written discovery question on the amendments (#11): “What evidence or
information does the defendant rely upon to establish that there was in fact no
racial animus involved in the plaintiff’s dismissal?” the defendant replied
that it “repeats and relies on the facts and information outlined in Mark
Crestohl’s March 17, 2006 response to Ms. Reis’s Ontario Human Rights complaint.”
[19] What the defendant relies upon are the facts
and information in the Crestohl letter to
the Human Rights Commission, sent in response to the Complaint. The
defendant does not allege reliance on the information in the notes,
notwithstanding that the notes may have been utilized to prepare the Crestohl
letter and notwithstanding that the information in the notes and the Crestohl
letter may to some extent contain all or parts or the same information. Indeed
the Crestohl letter has been produced, thereby waiving any privilege over the
letter. In fact in my view once the letter was sent to the Commission it lost
its privilege. That does not however mean that the confidential notes prepared
to obtain legal advice and to assist counsel in responding to the litigation
have lost their privilege. In my view, privilege over that document has not
been waived.
[20] It must however be kept in mind what exactly is privileged from
production. What is privileged and protected from production are the notes,
being a document prepared for the advice of counsel and in response to
litigation. What is not protected is the “information” or facts in the document
to the extent that they are relevant to the issues in this lawsuit and that
were discovered through Ms. Warden’s investigation and memorialized in the
notes. If asked, facts relevant to issues in the action must be revealed,
notwithstanding that the party’s source of the information is contained in a
privileged document. Rule 31.06(1) enables a party to obtain on examination for
discovery relevant information contained in a document otherwise protected from
production on the ground of privilege. See Pearson
v. Inco Ltd., [2008] O.J. No. 3589 (S.C.J.) at
paragraphs 15 to 19 and Shibish, supra, at paragraph 11. Furthermore rule 31.06(2) permits a party
to obtain disclosure of the names and addresses of persons who might reasonably
be expected to have knowledge of occurrences in issue in the action.
Furthermore, a “summary of the substance of the evidence of those persons who
might reasonably be expected to have knowledge of the matters in issue must be
provided if requested.”: Dionisopoulos v.
Provias (1990) 71 O.R. (2d) 547, [1990] O.J. No. 30
(S.C.J.) at p. 4 (O.J.)
[21] In the context of the notes in issue, this analysis would
protect production of the notes themselves, but if asked, the defendant would
be obliged to divulge the names and addresses of persons interviewed by Ms.
Warden if such persons have any knowledge of the matters or occurrences in
issue as defined by the pleadings as well as a summary of the substance of
their relevant evidence. The matters in issue of which such persons may have
knowledge include not only the circumstances surrounding the treatment and
cessation of employment of Ms. Reis, but also any knowledge of a systemic
application of policies to replace employees with dark skin with Asians. The
defendant need not provide the exact questions asked of these persons or a
precise quote of their responses as long as a “summary of the substance of the
evidence” of each of them is given. To the extent that Ms. Warden’s
investigation revealed other information relevant to the issues in this action
but not necessarily contained in the witness interviews, the substance of the
relevant information discovered must also be provided. Ms. Warden’s opinions,
conclusions and recommendations however are not facts or information and to the
extent they appear in the notes, they are not
discoverable.
[22] The plaintiff also
argues that litigation privilege fails based on the defendant’s abuse of process. Blank
v. Canada, supra, at paragraphs 44-45 stands for
the proposition that litigation privilege would
not protect from disclosure evidence
of the defendant’s “abuse of process or
similarly blameworthy conduct” upon a “prima facie showing of actionable
misconduct by the other party in relation to the proceedings.” The court may
review the documents to determine if disclosure should be granted on this
basis. I have reviewed the notes and their contents do not reveal any prima
facie evidence of abuse of process or similar blameworthy conduct. The notes
reveal details of the defendant’s investigation of the plaintiff’s Complaint
through the interview of various employees of the defendant. The plaintiff
alleges that the defendant’s delay in producing various documents and the
failure to disclose the existence of the notes in their original affidavit of
documents (which clearly the defendant should have done) is actionable misconduct
justifying production of the notes. I disagree. The litigation delay and
untimely disclosure in the circumstances of this action are not the sort of
“actionable misconduct” referenced in Blank that could deprive the defendant of the protection of litigation privilege. In
any event Blank was dealing only with litigation privilege, and not
solicitor-client privilege, when discussing this exception. Even if I agreed
that the defendant’s conduct was sufficient to lose the protection of
litigation privilege, solicitor-client privilege would still protect production
of the notes.
THE ADEQUACY
OF THE SUPPLEMENTARY AFFIDAVIT OF DOCUMENTS
[23] With all of this in mind I now consider the sufficiency of the
last version of the supplementary affidavit of documents and the answers to the
follow up questions to answers given to the questions ordered by Master Haberman.
[24] On April 20, 2010 Master Haberman ordered a further and better
affidavit of documents “delineating any documents which
they claim privilege on within 30 days”. In response the defendant served a
supplementary affidavit of documents sworn April 26, 2010 containing additional
Schedule A documents but a boiler-plate Schedule B with no documents listed.
This was in breach of Master Haberman’s order. After service of the notice of
motion a new supplementary affidavit of documents sworn February 8, 2011 was
served. One document was listed in
Schedule B under both litigation privilege and solicitor-client privilege
headings described as follows:
“Notes of Chris
Warden re: internal CIBC/Employee Relations investigation re: Yonette Reis’
Ontario human rights complaint.”
[25] I have determined that the notes are protected both by
solicitor-client privilege and litigation privilege and thus properly included
in Schedule B and protected from production,
although discovery of relevant information in the notes may be
compelled, including names of persons interviewed with relevant knowledge and
the substance of their evidence. The
plaintiff however has also raised the adequacy of the description of the
notes in the affidavit of documents.
[26] The description of documents in an affidavit of documents over
which privilege is claimed must be sufficient “to enable a court to make a
prima facie decision over whether the claim for privilege has been established”
but “it is not necessary to go so far as to give an indirect discovery”: Grossman v. Toronto General Hospital (1983), 41 O.R. (2d) 457 (H.C.J.). It should be
sufficient “to enable opposing counsel to appraise that claim [for privilege]
and decide whether to accede to it or contest it” and the information necessary
for that purpose is a description of the author of the document, a description
of the document, the date of the document and the addressee: Barrett v. Vardy, [1989] O.J.
No. 959 (O.D.C.). In Barrett an example of a sufficient description of the document was “a
medical report of the examination of the plaintiff conducted on” a specified
date. See also Shibish, supra, at para. 10.
[27] The description of the
notes is insufficient in that is omits a date for the notes. A date, or if more applicable a range of dates, must
be provided as to when the notes were created, presumably contemporaneously
with the interviews. The plaintiff also argues that the description is
deficient as it fails to outline all steps taken in the investigation and fails
to name each interviewee. I disagree. The description provided is sufficient to
enable plaintiff’s counsel and the court to determine the claim for privilege.
Any more would be intruding into “indirect discovery.” As stated earlier in
these reasons, however, the fact that the description of the document need not
be more specific in the affidavit of documents does not prevent the plaintiff
from discovering the names of persons interviewed if they have relevant
knowledge and the substance of their evidence.
[28] Furthermore, if all
that the defendant has in its possession is an electronic transcription of the
notes that is how the document should be described in Schedule B.
[29] The affidavit of documents is also deficient since if the
original handwritten notes are now lost they should also be listed in Schedule
C. Rule 30.03(2)(c) also requires a statement
of when and how the party lost possession and their present location (or
if unknown, a statement to that effect).
THE ADEQUACY
OF ANSWERS TO THE FOLLOW UP QUESTIONS
[30] Question 11 originally asked who at CIBC is responsible for
compiling, updating or enforcing CIBC’s Employee Policies. Master Haberman
ordered that it be answered restricted to policies dealing with harassment and
racial issues. The answer given was that
the applicable policy was the
“Harassment in the Workplace-Global Policy and Guidelines/Procedures” and the
defendant’s human resources policy and governance department was responsible
for compiling, updating and enforcing the policy. The plaintiff’s follow up
question was to provide names and addresses of all employees in that department
with material evidence on the application, scope and interpretation of the
policy. The defendant’s answer to this follow up question was a refusal to
provide the names and addresses since everyone in the department would have
knowledge with respect to the application, scope and interpretation of the
policy and there has been considerable personnel change in the department since
the termination of the plaintiff’s employment. Paragraph 10a of the amended statement of claim pleads a
racial animus and objective on the part of Ms. Luu of replacing employees “in
her area”. Ms. Luu as pleaded was the plaintiff’s supervisor in the Tax
Department of the Mortgage Servicing Group. Others were named as victims of the
same animus. In my view the question, while relevant to the allegation of
systemic racial animus in the department, is too broad. Therefore the persons with relevant knowledge
of the issues as defined by
the pleadings would be those human resource employees, whether or not still
with the defendant, who, during the time of the plaintiff’s employment with the
defendant, would have had some involvement with the terminations and hirings in
Ms. Luu’s “area”. The defendant shall provide their names and last known
addresses of the defendant’s human resources policy and governance department
who were involved with terminations in the Tax Department of the Mortgage
Servicing Group between January 2000 and June 2005. Addresses may be a work,
not necessarily a residential address.
[31] Question 17 originally asked what enquiry if any was made
into the
plaintiff’s allegation at
paragraph 5 of the statement of claim that Ms. Luu embarked on a campaign of harassment
and intimidation designed to have the plaintiff voluntarily leave her job or
form a basis for dismissal for cause. The answer given following Master
Haberman’s order was that the defendant made inquiries into the allegations
presented in the Complaint and additionally, prior to termination, the reasons
for dismissal were fully reviewed by the defendant and determined to be
justified. This was a proper, albeit brief and in my view incomplete and
inadequate answer to the question ordered. The follow up question was to
provide all documents with respect to the inquiries and conclusion. The answer
to the follow up question was that all documents have been produced unless
subject to litigation or solicitor-client privilege. The only document not
produced was the notes and I have ruled the notes are privileged and need not
be produced. The follow up question has therefore been properly answered. As
noted however, that does not relieve the defendant of providing relevant
information from those notes, including names and addresses of persons
interviewed who have relevant information together with a summary of their
evidence. It appears that the precise question has never been specifically
asked to provide a summary of evidence of persons interviewed.
[32] Such information however could and should have been provided in
answer to original question 17 which asked what enquiries were made into the
plaintiff’s allegation that Ms. Luu embarked on a deliberate campaign of
harassment against the plaintiff to cause her to leave her employ. Indeed, Master Haberman in her
reasons given on April 20, 2010, already cautioned the defendant that the
plaintiff was entitled at the discovery stage to the names of persons with
knowledge and a summary of their evidence. She made it clear in response to
question 17 that the plaintiff was entitled to know what “evidence” the
defendant relied on. I also note that question 11 on the amendments (although
not yet determined in this endorsement) also asks what evidence the defendant
relies upon to establish that there was no racial animus in the plaintiff’s
dismissal and to “provide the names and last known addresses of all witnesses”.
While the defendant replies that it relies on the facts and information in the
Crestohl response to the Complaint, it does not list witness names and
addresses in its response. Despite the fact that it was not specifically asked
as a follow up question, I would require the defendant to provide, as part of
the answer to original question 17, relevant information obtained as a result
of the investigation, including the names and addresses of persons interviewed
who have relevant information or knowledge about any of the issues as defined
in the pleadings, including the amendments and the substance of their evidence.
If I am wrong that it should now be provided as part of original question 17, I
would have given the plaintiff leave to ask further follow up question to
obtain the information.
[33] Three sub-questions
to question 17 were asked and in my view properly answered.
[34] Questions 18 and 19 also deal with enquiries
of Ms. Luu and were properly answered
as ordered by Master Haberman. Follow up questions request supporting
documents. The document again is the notes and they need not be produced, but
as indicated the substance of Ms. Luu’s evidence must be provided.
[35] Two of the four follow up sub-questions to question 19 have not
been satisfactorily answered and require more particularity. 19(i) asks when
the defendant first learned that the notes were no longer in its possession.
“Recently” is not a sufficient answer. 19(ii) and (ii) deal with production of
the notes to counsel and have been properly answered. 19(iv) asks why the notes
were not “disclosed”: in the affidavit of documents. The answer dealt with why
the notes were not “produced” (privilege). That does not answer the question
which queries why the notes were not disclosed for example in Schedule B and/or
C, a very relevant question.
[36] Question 24 and the
follow up question are properly answered.
[37] The follow up questions to the answers to questions 27 and
41 are
hypothetical. Question 27 originally asked “when” the defendant first
became aware that the plaintiff was suffering from situational stress disorder
and the answer given as ordered by Master Haberman was that the defendant was
and is not aware the plaintiff suffers from that disorder. By way of follow up
the plaintiff asks if their acts and omissions would have been different “if they knew”. Question 41 originally asked
whether the plaintiff advised the defendant that she wished a transfer to get
away from Ms. Luu. The answer given as ordered by Master Haberman was that the
plaintiff did not indicate that Ms. Luu or their relationship was the reason
for requesting a transfer. By way of follow up question the plaintiff asked
whether the defendant’s acts and omissions would have been different “if they
knew” that the plaintiff sought the transfer to get away from Ms. Luu’s
harassment. Both follow up questions were hypothetical questions, without any
foundation in the defendant’s evidence, and need not be answered. A party,
other than an expert, need not answer hypothetical questions: Motaharian v. Reid, [1989] O.J. No. 1947
(H.C.J.). The plaintiff could have asked if the defendant had policies on how
to respond to an employee alleging situational stress disorder or asking for a
transfer because of her manager’s treatment of her, but these questions were
not asked. The questions ordered by Master Haberman were properly answered and
the follow up questions were improper.
REMEDY
[38] The relief requested in the notice of motion was to strike the
statement of defence for breach of Master Haberman’s order or alternatively to
compel compliance. As noted, by the time this motion was served, the
supplementary affidavit of documents had
been served within the 30 days as
ordered albeit deficient (no delineated privileged documents in Schedule B) and by the time the motion was heard it was still deficient
(Schedule B was delineated but description incomplete as lacking dates).
By the time this motion was served the defendant had answered
all questions ordered by Master Haberman to be answered, albeit outside the
deadline ordered of 30 days (2 months for unsworn and 5 months for sworn
answers). No objection was raised to the answers, however follow up questions
were asked and answered. I made rulings as to the sufficiency of the answers to
the follow up questions, however Master Haberman did not set a time limit for
answering follow up questions nor did she rule on the propriety of possible
follow up questions, so no breach of her order could arise therefrom. Striking
a defence is an extreme remedy and the nature of the breaches (late answers and
non- compliant supplementary affidavit of documents) would not justify putting
an end to the defendant’s ability to defend the action, particularly where
there had been no pattern of disregard of court orders. The inability to locate
the original notes and the discrepancy between the recollections of Ms. Warden
and Ms. Johnson would not justify a dismissal, particularly where, as here, the
notes are privileged and to the extent that some of the information therein
must be disclosed, there is an electronic transcription available. It is
appropriate by way of relief that I make an order to correct the deficient
supplementary affidavit of documents and given that I made rulings on the
follow up questions to make an order with respect thereto.
COSTS
[39] With respect to costs, the defendant was in breach of the order
to provide a supplementary affidavit of documents with a delineated Schedule B
within 30 days. Even once corrected it
was still deficient, although I held in favour of the defendant on whether the
description needed to include identification of witnesses interviewed. The
questions ordered were answered late, although no issue was raised as to the
content of the answers. On the follow up questions there was a division of
success. The most significant issue which underlay many of the questions
refused was a refusal to produce the investigative notes prepared by Ms. Warden. This issue was the primary focus
of the written material, the cross-examination and the rule 39.03 examination
and took up the bulk of the time at the hearing of the motion. I upheld both
solicitor-client privilege and litigation privilege as claimed by the defendant.
On that basis I upheld the defendant’s refusals to produce the notes as
requested in follow up questions to the answers given to questions 17, 18 and
19. Although I held that the information in the notes and the identities and
summary of evidence of persons interviewed who had knowledge of the issues
could be obtained by proper discovery questions (even if the notes themselves
were protected from production), those questions had not been specifically
asked, and I gave the plaintiff an indulgence by requiring that information as
part of the answer required to original question 17. The defendant however
resisted providing the information from the notes on the basis that since the
notes were privileged, the names of interviewees and the substance of their evidence
were also protected by privilege. The defendant took that position despite
Master Haberman’s warning that the names of witnesses and a summary of their
evidence must be provided. My ordering witness names and evidence was a
critical ruling in favour of the plaintiff. I upheld the defendant’s refusal to
answer follow up questions to answers
given to questions 27 and 41 on the basis that they were hypothetical. I held
the defendant’s answers to follow up questions 19(i) and (iv) were non-
responsive and ordered they be answered. There was divided
success on follow up question 11. I permitted the plaintiff to
obtain names of employees in the human resources department but not as broadly
as had been requested.
[40] In all
of the circumstances the plaintiff should have its reasonable costs on a
partial indemnity scale. The defendant’s delay in answering, its initial
failure to disclose the notes and the
apparent inability to locate the original notes do not in my view amount to
contemptuous conduct nor do they amount to the sort of reprehensible behaviour
that would attract substantial indemnity costs. There should also be a
significant reduction in the costs awarded based on the division of success.
[41] The plaintiff has provided a bill of costs (and not a costs
outline as required by rule 57.01(6)) claiming a total of $14,794 on a full
indemnity basis. This includes 30.5 hours at an actual billing rate of $400 per
hour for a total of $13,786 fees inclusive of HST plus $1,008 disbursements.
There is no summary provided based on a partial indemnity rate. The definition
of substantial indemnity costs in rule 1.03 is 1.5 times partial indemnity
costs. Mr. Guiste’s partial indemnity rate would thus be $267 per hour.
Applying that rate the plaintiff’s partial indemnity costs would total $9,202
fees inclusive of HST plus $1,008 disbursements for a total of $10,210. Despite
rule 39.02(4) I am of the view, given the information about the notes, that the
cross-examination of Ms. Warden on her affidavit and the rule 39.03 examination
of Mr. Crestohl were reasonable and I would treat those as costs of the motion.
The motion was of only moderate complexity and in my view 14 hours of research
is somewhat excessive. The issue of privilege and production of the notes
however was considered to be of significant importance to both parties. Indeed
the defendant also incurred significant costs on the motion. Its costs outline
claimed costs of $14,130 on a substantial indemnity basis or $10,740 on a
partial indemnity basis, remarkably similar to the plaintiff’s.
[42] The fixing of costs
however is not simply a mathematical exercise of multiplying hours spent by an appropriate hourly rate.
The court must fix costs in an amount that is fair and reasonable in the
circumstances and that an unsuccessful party could reasonably expect to pay and
consider the factors under rule 57.01, which I have done in the preceding
paragraphs. I have also reduced costs
otherwise payable to account for the divided success on the motion. In my view
costs of $5,500 inclusive of HST and disbursements would be fair and reasonable
and, given the defendant’s own costs outline, within the reasonable
expectations of the defendant.
ORDER
[43] I hereby order as follows:
(1)
The motion to strike the statement of defence
is dismissed, but on terms that follow.
(2)
The defendant shall within 30 days serve a
revised supplementary affidavit of documents in which,
(a)
the notes listed as a document in Schedule B
shall be dated;
(b)
the notes listed in Schedule B shall be
properly described as an electronic transcription of the notes, or as the case
may be;
(c)
if the original handwritten
notes cannot be located, they shall also be listed in Schedule C with the
information required by rule 30.03(2)(c).
if the original handwritten
notes cannot be located, they shall also be listed in Schedule C with the
information required by rule 30.03(2)(c).
(3)
The
follow up question to question 11 shall be answered by the defendant providing
the names and last known address of persons in the defendant’s human resources
policy and governance department who were involved with terminations or hirings
in the Tax Department of the Mortgage Servicing Group between January 2000
and June 2005.
(4)
Follow up questions to questions 17, 18 and 19
have been properly answered and the notes need not be produced. The defendant
shall however as part of its answer to original question 17 provide all
relevant information obtained as a result of the investigation, including the
names and addresses of persons interviewed who have relevant information or
knowledge about any of the issues as defined in the pleadings, including the
amendments and the substance of their evidence.
(5)
The defendant must answer follow up question
19(i) with greater particularity and answer the question asked at follow up
question 19(iv).
(6)
Follow up questions 17(i), (ii) and (iii),
19(ii) and (iii), 24, 27 and 41 have been properly answered and require no
further answer.
(7)
The defendant shall answer the follow up
questions as ordered within 45 days.
(8)
The defendant shall pay to the plaintiff her
costs of this motion within 30 days fixed in the sum of $5,500.
Master R. Dash
DATE: April 18, 2011
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