What Surveillance Evidence Needs to Be Disclosed to Applicant? - 18-004555 RD v Wawanesa Insurance, 2019 CanLII 22203 (ON LAT)

May 20, 2019, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

18-004555 RD v Wawanesa Insurance, 2019 CanLII 22203 (ON LAT)

Date of Decision: February 26, 2019
Heard before: adjudicator amanda fricot

MOTION DECISION

SURVEILLANCE – is applicant entitled to surveillance evidence from respondent; is the evidence relevant to the issues in dispute;  is the evidence protected from disclosure by litigation privilege; surveillance that is related to the issues in dispute, if any, is relevant to this application; the respondent is not required to advise of the existence of any surveillance or provide copies of any surveillance evidence that relates to surveillance conducted after litigation privilege unless it intends to rely on it at the hearing

Overview

RD was in a car accident on May 1, 2013 and sought SABs benefits. RD applied to the LAT following a denial of certain benefits by Wawnesa.

The parties participated in a case conference on November 8, 2018.  At the case conference, RD requested that Wawnesa advise her of the existence of any surveillance and provide her with the complete, unredacted tapes and reports of any such surveillance. Wawnesa agreed to provide this evidence only if it intends to rely on it at the hearing, but otherwise claimed that it was covered by litigation privilege

Issues

1. Is Wawnesa required to advise RD of the existence of surveillance, if any?
2. If the answer to (i) is yes, is Wawnesa required to provide RD with complete, unredacted surveillance tapes and records if Wawnesa does not intend to rely on that evidence at the hearing?

To determine these issues, the following questions must be answered:

1. If surveillance evidence exists, is it relevant to the issues in dispute in this application?
2. If surveillance evidence is relevant, is RD entitled to have the existence of the same disclosed and the surveillance evidence produced, or is some or all of what is sought protected from disclosure by litigation privilege?

Result

1. Surveillance that is related to the issues in dispute, if any, is relevant to this application.
2. Litigation privilege arose in this case on September 4, 2014 when RD filed an application for arbitration to the Financial Services Commission of Ontario (FSCO) claiming accident benefits arising out of the May 1, 2013 accident (“2014 application”), and:
   1. Wawnesa must advise RD of the existence of all surveillance, if any, conducted prior to September 4, 2014 and provide RD with the date, time, place and reason for the surveillance; and
   2. Wawnesa must provide copies of any surveillance conducted before September 4, 2014 that relates to the issues in dispute. Wawnesa shall be entitled to redact solicitor-client privileged communications, if any.
3. Wawnesa is not required to advise RD of the existence of any surveillance or provide copies of any surveillance evidence that relates to surveillance conducted after litigation privilege arose on September 4, 2014, unless Wawnesa intends to rely on it at the hearing.
4. Wawnesa shall comply with the Tribunal’s Common Rules of Practice & Procedure (the “Tribunal Rules”) with respect to any surveillance evidence it intends to rely upon at the hearing.

Analysis

If surveillance evidence exists, is it relevant to the issues in dispute in this application?

RD claims that she sustained a catastrophic impairment. Wawnesa argues that she did not.  RD submits that surveillance evidence is relevant to a determination of RD’s catastrophic status.  RD relies on the Tribunal’s Unifund decision in support of the position that surveillance evidence is relevant. Wawnesa made no submissions regarding the relevance of surveillance evidence.

In this case, unlike in the Unifund case, RD commenced an earlier application to FSCO arising out of claims related to the same May 1, 2013 accident.  Wawnesa may, therefore, have surveillance evidence that was created in relation to this earlier application. It may be, however, that some or all of this same evidence, assuming it exists, is relevant to the issues in dispute in this application.

The Adjudicator found that any surveillance evidence that relates to the issues in dispute in this application is relevant to a determination of those issues and may be of assistance. The Adjudicator agreed with the adjudicator in the Unifund case that the fact that the surveillance is not helpful to Wawnesa’s case does not mean that it is not relevant.  Relevance, and not whether Wawnesa elects to rely on surveillance evidence, is the starting point in determining whether the surveillance evidence sought should be produced.

If surveillance evidence is relevant, is RD entitled to have the existence of the same disclosed and the surveillance evidence produced, or is some or all of what is sought protected from disclosure by litigation privilege?

For the reasons noted below litigation privilege arose in this case on September 4, 2014 when the 2014 application was filed.  The existence of any surveillance conducted after that date is protected by litigation privilege, and that Wawnesa is not required to produce the same unless Wawnesa intends to rely upon it at the hearing.

Does the Tribunal have jurisdiction to order the production of surveillance evidence that is subject to litigation privilege?

RD relies on Rules 3.1(b), 9.1 and 9.3(e) of the Tribunal Rules to support RD’s position that the Tribunal has the jurisdiction to, and should, order production of all of the surveillance evidence requested, including surveillance evidence Wawnesa does not intend to rely upon at the hearing.

The Adjudicator agreed with Wawnesa submission that the Tribunal Rules must be interpreted in a manner consistent with the Statutory Powers Procedures Act which clarifies that the SPPA provision authorizing the Tribunal to make disclosure orders does not authorize the Tribunal to make an order requiring disclosure of privileged information.

Thus the Tribunal does not have authority to order production of surveillance evidence that is protected by litigation privilege.

When will litigation privilege arise?

Litigation privilege is a limited exception to the general principle of full disclosure.  The onus is on Wawnesa to establish that litigation privilege applies and when it arose.

[The Supreme Court of Canada in Blank, noted 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,” as well as upon the need for parties to be able to prepare for litigation without the fear of premature disclosure.  A two-part test must be met by a party seeking to establish litigation privilege.  This test was applied in the Mamaca decision which requires that the party claiming privilege show both (1) that there was a reasonable prospect of litigation at the time the surveillance evidence was created, and (2) that the dominant purpose for the creation of the surveillance was to assist in the contemplated litigation.

Does any litigation privilege that may have arisen in the 2014 application continue for the purposes of this application?

The litigation privilege that arose in the 2014 application continues for the purpose of this application and that litigation privilege attaches to surveillance evidence, if any, created after that date for the following reasons.

The Court in Blank described the scope of litigation privilege as follows:

34…Once the litigation has ended, the privilege to which it gave rise has lost its specific and concrete purpose — and therefore its justification.  But to borrow a phrase, the litigation is not over until it is over: It cannot be said to have “terminated”, in any meaningful sense of that term, where litigants or related parties remain locked in what is essentially the same legal combat. …

36    I therefore agree with the majority in the Federal Court of Appeal and others who share their view that the common law litigation privilege comes to an end, absent closely related proceedings, upon the termination of the litigation that gave rise to the privilege:…

38   As mentioned earlier, however, the privilege may retain its purpose — and, therefore, its effect — where the litigation that gave rise to the privilege has ended, but related litigation remains pending or may reasonably be apprehended…..

39   At a minimum, it seems to me, this enlarged definition of “litigation” includes separate proceedings that involve the same or related parties and arise from the same or a related cause of action (or “juridical source”).  Proceedings that raise issues common to the initial action and share its essential purpose would in my view qualify as well.

Wawnesa relies on Blank  and submits that:

“Both the 2014 application to FSCO and the current application stem from the same juridical source – a disagreement between RD and Respondent as to the benefits owed by Wawnesa to RD as a result of RD’s 2013 accident. Therefore, the current application for castastrophic impairment benefits has been reasonably foreseeable since at least September 9, 2014. Any surveillance evidence created after that date is protected by litigation privilege.”

Wawnesa’s position is based on the premise that the possibility, in 2014, that RD may, at some future date, apply for a catastrophic impairment determination (“CAT determination”) is sufficient to satisfy the test that there was a reasonable prospect in 2014 of litigation relating to the issues now in dispute. I disagree. The possibility of future disagreements as to other benefits owed to RD as a result of the 2013 accident and claims being filed and denied and giving rise to litigation, does not, in and of itself, constitute a reasonable prospect of litigation in 2014 with respect to all such claims.  In each case, the nature of the claims advanced in the initial application must be compared to the nature of the claims advanced in any subsequent application to determine whether both relate to the same underlying facts and issues. 

In this case, the non-earner benefit claim (NEB) that was made in the 2014 application shares sufficient commonality with the CAT determination in dispute in this application to support a finding that the litigation privilege that arose in the 2014 application continues for the purpose of this application.

To establish her 2014 claim for a NEB, RD needed to demonstrate that she suffered “a complete inability to carry on a normal life as a result of an accident”.  That phrase is defined in the Schedule to mean that she sustained an impairment that “continuously prevents” her from “engaging in substantially all of the activities” she ordinarily engaged in before the accident.” In the current application challenging the CAT determination denial, RD alleges that she is catastrophically impaired as a result of the accident, both because she suffers from (1) an impairment or a combination of impairments that results in a 55 per cent or more impairment of the whole person; or (2) an impairment that results in a marked or extreme impairment due to mental or behavioural disorder.

Both of these determinations – entitlement to an NEB and whether RD suffered a catastrophic impairment – examine the same fundamental issue: RD’s level of impairment resulting from the accident.  Although the specific test that must be satisfied is different for each determination, the underlying factual basis for the determination of both claims is very similar.  In this sense, both the 2014 application and the current application are, in my view, closely related proceedings that raise sufficiently common issues to satisfy the test for continuing litigation privilege set out by the Supreme Court of Canada in Blank.

The application for a CAT determination was filed on January 26, 2017 and was denied on July 20, 2017.  The 2014 application was settled on December 11, 2017.  As RD conceded in her Supplementary Submissions, surveillance conducted after July 20, 2017, the date of the denial of the CAT determination, would have been created for the dominant purpose of litigation and would have been privileged.  Therefore, prior to the litigation privilege coming to an end at the conclusion of the 2014 application, the current application, which the Adjudicator found to be a closely related proceeding, was already contemplated.

In her Supplementary Submissions, RD relies upon the decision in Chrusz in support of her position that, after the 2014 application settled, the “parties were essentially returned to their original positions as insurer and insured” and that at “that point, the previous litigation privilege over the surveillance came to an end”. The facts in Chrusz are distinguishable.  In that case, litigation privilege was found to have come to an end when the factual basis for the claim that gave rise to litigation privilege, namely a belief that the insured had been involved in in arson, came to an end.  In this case, as noted above, there are common factual issues underlying both the NEB claim and the CAT determination such that the litigation privilege that arose in the 2014 application has not yet come to an end.

On this basis the Adjudicator found that the litigation privilege that arose in the 2014 application continues for the purpose of the current application and that surveillance evidence that was privileged in the 2014 application remains privileged and is not compellable in this application.

When did litigation privilege with respect to surveillance evidence arise in the 2014 application?

RD submits that Wawnesa’s claim that litigation privilege attaches to all surveillance obtained after September 4, 2014 must fail as there is no evidence addressing the possibility that surveillance conducted after that date may have been conducted for the purpose of adjusting claims, rather than for the dominant purpose of litigation. RD submits that this evidence is necessary where an insurer has accepted and is paying a number of different types of ongoing claims, while rejecting and defending against only some of RD’s claims, which RD submits is the situation in this case.  RD relies on the Mamaca[16] decision in which the insurer claimed that litigation privilege protected non-surveillance related documents from production. In that case, the insurer had accepted and was paying a number of ongoing claims and was only defending against an income replacement benefit claim.

The Adjudicator found that Wawnesa’s failure to establish that all surveillance, if any, was conducted for the dominant purpose of litigation and not for the purpose of adjusting claims or for some other purpose, does not automatically prevent litigation privilege from attaching to surveillance conducted after September 4, 2014 for the following reasons. In the case before me, unlike in Mamaca, there is no evidence regarding whether other benefits were being paid on an ongoing basis or whether any were subject to ongoing adjustment.  The absence of that evidentiary foundation, there is no onus on Wawnesa to adduce evidence establishing that surveillance, if any, was not conducted for the purpose of adjusting claims but rather for the purpose of litigation.  Wawnesa’s failure to adduce such evidence does not automatically negate the existence of litigation privilege in this case.

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