Fridays with Rogers Partners

August 20, 2021

At our weekly meeting, Annie Levanaj discussed the recent decision of the Ontario Superior Court of Justice in Skoblenick v Aviva General Insurance Company, 2021 ONSC 5340. This decision concerned motions brought by both parties for directions and costs regarding repeatedly adjourned examinations for discovery.

History of the Litigation

This action arose from a fire incident on the plaintiffs’ property in Waterford, Ontario on or about March 22, 2017, and the defendant’s denial of coverage under a fire insurance policy. The defendant alleged that the denial was because their investigation led them to believe that the plaintiffs had misrepresented the insured risk (they had not disclosed a fire loss in August 2012). The plaintiffs served the Statement of Claim on March 21, 2018, and the defendant responded on October 1, 2018 with a Statement of Defence.

Examinations for discovery were originally scheduled for June 10 and 11,2020 but were rescheduled for August 18 and 19, 2020. The parties disagree on the reason for the rescheduling.

On August 14, plaintiffs’ counsel called defendant’s counsel and cancelled the August discoveries for personal reasons. The defendant’s counsel stated that he had incurred costs due to the cancellation, for which plaintiffs’ counsel apologized. On September 8, 2020, the discoveries were once again rescheduled for November 2 and 3, 2020.

On September 23, 2020, defendant’s counsel sent a letter requesting $1000 in payments of costs thrown away for the cancelled discoveries, stating that he would bring a motion otherwise. Plaintiffs’ counsel did not respond to the letter.

On November 2, 2020 the examination of plaintiff Luba Skoblenick was taking place when counsel for the defendant aborted the examination and cancelled the next day’s discovery of a representative of the defendant. Defence counsel’s reasons for aborting the discovery were:

  1. The plaintiff was not prepared for the discovery since he had not reviewed the defendant’s documents from the affidavit of documents; and
  2. Plaintiffs had failed to provide any documents pertaining to damages which the defendant’s counsel required to properly defend the claim.

The Motions

The defendant’s counsel adjourned the discoveries and moved for directions from the Court,  and for costs thrown away for the August and November discoveries.

On February 16, 2021, the defendant brought a motion for:

  1. An order for costs thrown away for the August 18 and 19, 2020 cancelled discoveries;
  2. An order for costs thrown away for the aborted discovery on November 2, 2020;
  3. An order compelling the plaintiff to re-attend at their examinations for discovery at their own expense;
  4. An order for directions with respect to conduct of the examination of the plaintiffs; and
  5. An order for costs against plaintiffs’ counsel, personally, for costs thrown away for the August 2020 discoveries.

Then on March 12, 2021 the plaintiffs brought a cross-motion for:

  1. An order that the defendant be produced for examination at its expense;
  2. An order the defendant completed its right to examination of the plaintiffs; and
  3. Striking the statement of Defence because of defendant’s refusal to produce a representative on June 10 and 11, 2020 for discovery and further by refusing to produce on November 3, 2020.

At the hearing of the motion, the plaintiffs only sought on their cross-motion that a representative of the defendant attend to be examined for discovery.

Analysis & Decision

Regarding the August Examinations

The defendant filed a Bill of Costs based on four and a half hours of expended time. The defendant’s Bill of Costs describes the attendances as including discussions with client and counsel, reports, telephone calls and meetings, reviewing Affidavits and preparing for examinations for discovery. However, defence counsel did not particularize which portion of the costs incurred for the August preparations had to be duplicated for the November examinations.

The court looked tosubsection 131(1)of the Courts of Justice Act[1] which provides that “costs of and incidental to a proceeding or step in a proceeding are in the discretion of the court and the court may determine by whom and to what extent the costs shall be paid”. The court cited Nelson v Chadwick[2] where Justice Verbeem provided guidance on principles that should be considered for costs thrown away:

“An award of ‘costs thrown away’ is not designed to penalize a party who seeks, or is responsible for, an adjournment of the trial, but rather to indemnify a party for the wasted time incurred for trial preparation that was stripped of its value as a result of a subsequent adjournment or mistrial… the court is required to carefully review a party’s bill of costs to determine, intuitively, what portion of the trial preparation or work falls within the scope of wasted time”

The court concluded that not all four and a half hours claimed were in preparation for the examinations, and instead there was some level of duplication which it equated to one and a half hours. Therefore, the recoverable amount was on a substantial indemnity basis for a total of $400.

While the court noted that one would not expect costs thrown away to arise from an adjournment of examinations by counsel, given the fact that the adjournment was to accommodate the personal schedule of plaintiffs’ counsel, it was appropriate to order him to pay costs thrown away to the defendant personally as per rule 57.07(1)(c) Rules of Civil Procedure.[3]

Regarding November Examinations

The defendant relied on Rule 34.14(1) to justify aborting the November 3rd examination. The court found the reasons defendant’s counsel gave for the cancellation were not covered by rule 34.14 and that there is no known positive duty on a party examined to familiarize themselves with documents of the opposing side. The court stated that if defendant counsel felt they did not have the necessary documents needed for proper examination, the court stated that a motion under Rule 30.06 for an order requiring service of a further and better affidavit of documents, should have been brought instead of cancellation of the discoveries. The court cited Walsh v 1124660 Ontario Ltd[4] regarding proper conduct of examinations for discovery and rule 34.14:

“To achieve a proper discovery there must be a spirit of co-operation between counsel. They can protect their respective clients while still conducting a proper discovery. The difficulties arise where they are not in agreement as to the issues or relevancy of matters thereto. Rule 34.14 provides for an adjournment to seek directions for the specific purposes therein set out. Otherwise, examinations should be continued to their conclusion.”

The court decided that the cancellation of the November discoveries was not justified, and required that the plaintiffs re-attend to be examined for discovery on a date to be arranged with counsel for the defendant. The court further ordered that the defendant’s representative also be examined on a date chosen by the parties. Regarding the costs of these motions, the parties were ordered to bear their own costs.

Takeaways

The spirit of co-operation is integral in avoiding unnecessary cost and delay.

This case demonstrates that there is no general positive duty on a party to familiarize themselves with documents of another party for its examination for discovery. Failing to do so will not justify cancelling a discovery and prolonging the case unnecessarily.

[1] R.S.O. 1990, c. C.43

[2] 2019 ONSC 4544 at para 27

[3] R.S.O. 1990, c. C.43

[4] [2002] O.J. No. 4069 (S.C.J.)