IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20101013

Docket: 79115

Registry:
Kelowna

Between:

Debra Willard

Plaintiff

And

Gregory Edward
Mitchell

Defendant

Before:
The Honourable Mr. Justice Brooke

Reasons for Judgment

[1]            
The plaintiff in this personal injury action claims damages arising from
a motor vehicle accident. The present application, brought by the defendant,
seeks the production of medical and business records. Despite the failure of
the defendant applicant to rely upon Rule 26(11) and Rule 27(22) in the notice
of motion, the application was fully argued relying on those rules, without
complaint from the plaintiff and, I am satisfied, without prejudice to her.
Since the hearing of the defendant’s application, the new Rules have come into
force and effect and Rule 26(11) is now Rule 7‑1(18) and (19), and Rule
27(22) is now Rule 7‑2(18).

Background

Medical Records

[2]            
The plaintiff alleges that she sustained personal injuries in a motor
vehicle accident which occurred in Penticton in December 2006. As set out in
her statement of claim, they include injuries to her jaw, neck, chest, back,
left arm, right shoulder, hand and wrist, and both knees. She also claims
gastrointestinal difficulties, headaches and anxiety, depressive symptoms,
nightmares and sleep difficulties. The plaintiff alleges that as a consequence
of her injuries, she has sustained and will continue to sustain pain and
suffering, loss of enjoyment of life, loss of amenities and loss of earnings.

[3]            
The defendant denies liability. He further alleges in his statement of defence
that any injuries or losses suffered by the plaintiff were not caused by the
accident and are attributable to previous and/or subsequent accidents or pre‑existing
conditions. He alleges, as well, failure to mitigate.

[4]            
Dr. Segers has been the plaintiff’s family physician since 2001. The
defendant has received medical records from Dr. Segers covering much of
the period from December 2000 to the present. However, the defendant submits
that he has not received a majority of the records between November 20, 2002
and October 27, 2004. He therefore seeks the following orders:

3.         Within
7 days of receipt of an entered copy of the Order, Dr. I Segers of 150-1940
Harvey Ave., Kelowna, BC, V1Y 8J8, shall make and deliver to the solicitor for
the defendant a certified copy of all clinical records, including x‑rays,
if the parties are able to reproduce such x‑rays, relating to the
plaintiff…in the possession or control of the said parties including records
outlining the medical history of the plaintiff, copies of any reports from
consulting doctors or physicians, and all other records and tests related to
the mental or physical health of the plaintiff, dating from November 20, 2002
to October 27, 2004 and January 24, 2009 to the present;

4.         The said party, at such time or
times as may yet be agreed upon by the said party and the solicitor for the
defendant produce for inspection by the solicitor for the defendant the
originals of all said records by which information may be stored, including x‑rays,
CT and MRI scans, if the party is able to reproduce the same, and upon written
request therefore by the solicitor for the defendant provide one (1) certified
copy to such solicitor of any such records of which a certified copy has not
yet already been provided.

(I note that since filing his notice of motion, the
defendant has received updated records for the period between December 18, 2007
and February 23, 2010.)

[5]            
The defendant has filed evidence in support of his submission that
production of the plaintiff’s pre‑accident records is necessary and
material to his defence. That evidence, primarily excerpts from the plaintiff’s
examination for discovery transcript and a reporting letter from an orthopaedic
surgeon in April 2006, demonstrates that the plaintiff was involved in a
serious accident in the mid‑1980s when, as a pedestrian, she was struck
by a motor vehicle. She sustained many breaks to her right leg and was advised
by doctors of the possibility that she could “run into problems” with her leg
as she got older. The orthopaedic surgeon’s letter refers to that earlier
accident and to a “long standing history of problems with her right knee”. Under
the heading “Past Medical History”, it notes that the plaintiff has been seen
for a number of conditions including asthma, celiac disease and hypothyroidism.

[6]            
Thus, submits the defendant, the plaintiff’s pre-existing medical
conditions may be contributing to certain of the injuries she claims arose from
the accident. Even information regarding her children or gynaecological issues
she discussed with Dr. Segers may be relevant to the anxiety, depressive
symptoms and sleep difficulties she attributes to the accident.

[7]            
The plaintiff consents to the production of the records from November 2,
2002 to October 27, 2004 pursuant to a Halliday order. As noted, she
deposes that she has discussed gynaecological issues with Dr. Segers, as
well as issues regarding her children, and that privacy is a concern for her.

[8]            
An affidavit of Coleen Logan, a legal assistant with the plaintiff’s
counsel, deposes that she has reviewed the notice of motion, reviewed the file
and has spoken with the plaintiff. She deposes that the plaintiff advises she
is unaware of any x‑rays, MRI or CT scans that have not yet been produced
to the defendant.

Business Records

[9]            
The plaintiff alleges in her statement of claim that she sustained loss
of earnings as a consequence of her injuries.

[10]        
The plaintiff deposes in an affidavit filed on this application that she
began working for Spartan Refrigeration, a sole proprietorship run by Patrick
Ash, as a bookkeeper in 1995. She was employed by the company at the time of
the accident. She states that her main duties with the company were
administrative, and that this was the case until the accident.

[11]        
In approximately May 2007, the plaintiff and Mr. Ash incorporated
676996 Canada Ltd., which carries on business under the name Spartan
Refrigeration. The plaintiff and Mr. Ash are each directors of the company.
The plaintiff deposes that during the time Mr. Ash operated Spartan and
since the incorporation of the number company, he has made all the business
decisions for these companies. She continues to work for the company when and
to the extent she is able.

[12]        
The plaintiff gave evidence at her examination for discovery that she
began dating Mr. Ash in 2000 and that they married in 2008.

[13]        
The defendant seeks the following order:

Within 5 days of this hearing, the plaintiff produce the
documents requested and respond to the questions asked at the examination for
discovery of the plaintiff conducted in these proceedings on September 9, 2009,
including:

a.         Copies
of all “medical receipts” relating to the plaintiff which were claimed on her
pre‑accident income tax returns;

b.         Income
tax returns from 2007 to 2008 for 6769969 Canada Limited;

c.         Financial
statements from 2007 to 2008 for 6769969 Canada Limited;

d.         Statements
of profit, loss and expenses for Spartan Refrigeration for 2000 to 2007;

e.         Copy
of the plaintiff’s calendars wherein she recorded her work hours, telephone
calls, jobs, etc;

f.          Computer printout
showing the plaintiff’s hours of work;

g.         List
of clients and contact people for various jobs that the plaintiff would have
attended on site to perform labour;

h.         Contact
information for journeymen employed from 2000 to the present;

i.          Contact
information for “Danny”, employee;

j.          List
of all employees and contact information from January 1, 2000 to the present;
and

k.         All information and
correspondence received from Revenue Canada regarding the audit of 6769969
Canada Limited.

[14]        
The defendant submits that these records are in the plaintiff’s
possession and control and should be produced. Although she asserts that they
relate to a sole proprietorship that she did not own, he points to her
examination for discovery evidence where, in explaining why her actual hours
worked may not be reflected in her time records, she stated, “When you’re self
employed or you work with our own company, you do not keep track of every
single hour of the day that you work after your day is over…”. She also gave
evidence about Revenue Canada finding her liable for a debt owed by Spartan.

[15]        
In the unique circumstances of this case, the defendant alternatively
submits that Mr. Ash and the numbered company should be ordered to produce
these same documents, with the exception of (a), the plaintiff’s medical
receipts.

[16]        
The defendant asserts that production of this information is necessary
because of discrepancies in the information that has been provided by and on
behalf of the plaintiff regarding her earnings and employment. He has filed the
plaintiff’s certificate of earnings signed by Mr. Ash and a request for particulars
of employment. These documents indicate, inter alia, the number of
hours the plaintiff worked and the salary she received before and after the
accident. The defendant has also filed a record the plaintiff prepared of the
hours she worked from 2006 to 2009, excerpts from her examination for discovery
transcript, and her income tax returns. He identifies a number of discrepancies
between the various documents, which he says necessitate production of source
documents. For example, the certificate of earnings states that the plaintiff
worked 40 or more hours per week before the accident; however, the record of
hours prepared by the plaintiff does not show her working any 40-hour weeks
from July 2006 to the date of the accident. As well, the certificate of earnings
states that the plaintiff had gross earnings of $43,200 in the 12 months prior
to the accident; her 2006 income tax return indicates earnings of $20,475.

[17]        
The nature of the plaintiff’s work duties is another area the defendant
identifies in arguing for the order requiring the plaintiff to respond to
questions asked at her examination for discovery. (He cites Rule 27(22) in this
regard.)  The plaintiff gave evidence that some of her employment duties
entailed working on job sites, pulling wire and carrying tools, and that she
was required to hire a labourer to replace her after the accident. She also
gave evidence that some years she was salaried and at other times she was not.

[18]        
In light of the foregoing, the defendant advances the following grounds
of relevance for the documents and information he seeks:

a)    whether the
plaintiff was paid hourly or by salary was dependent on how the company was
doing financially;

b)    a determination
of the percentage of time the plaintiff spent performing labouring activities
requires her to review business records regarding the various work sites;

c)     computer
records may assist in determining whether the plaintiff is working fewer hours
than before the accident;

d)    the outcome of
Revenue Canada’s audit may be relevant to how the businesses were performing
financially;

e)    employees and
clients of Spartan Refrigeration or the numbered company may have witnessed and
be able to give evidence of the plaintiff’s involvement in the company and, in
particular, her role as a labourer and her ability to perform physical work
before the accident; and

f)      the
information may shed light on whether the post‑accident hire of a
labourer was required in order to replace work the plaintiff had done before
the accident.

[19]        
The plaintiff resists production. She submits that the documents are not
legally within her control, as they relate to a sole proprietorship she did not
own. She additionally submits that the defendant is engaged in a “fishing
expedition” and that the records he seeks are not relevant to issues raised in this
litigation.

[20]        
Ms. Logan deposes that the plaintiff advised her that she does not
have the medical receipts sought as they were attached to her previous income
tax return and forwarded to Revenue Canada. She did not keep copies. The
plaintiff also advised her that she sent the 2007 and 2008 income tax returns
for the numbered companies to Revenue Canada without keeping copies. The
plaintiff advised there is no computer print‑out showing her hours of
work. Rather, she noted her hours of work on the family calendar, which she
transcribed onto a separate document. (The defendant has this document and
referred to it in submitting there are discrepancies in the information he
possesses regarding the hours the plaintiff works.)

[21]        
With respect to these calendars, the plaintiff submits that they records
not only of her work hours, but also family matters that are not relevant.

[22]        
The plaintiff also argues that the information and correspondence
received from Revenue Canada regarding the audit of the numbered company are
similarly not relevant to issues raised in this litigation.

[23]        
 Mr. Ash filed a response to this application, opposing the
alternative relief sought by the defendant. He filed a brief affidavit in which
he deposes that Spartan Refrigeration is a small business that relies on its
existing customers for repeat contracts and referrals. Maintaining goodwill
with customers is important to the success of the business. Mr. Ash
is opposed to disclosing the names of the company’s customers because it is his
belief that the defendant or an investigator on his behalf intends to contact
the customers to inquire about the plaintiff, her relationship with the company
and the operations of the company. This will be a nuisance to the customers,
will create in them an impression that the plaintiff or the company is under
suspicion for some kind of wrongdoing, which will be harmful to the company’s
goodwill. Mr. Ash states that he objects to disclosure of the company’s
financial information unless it is necessary to determine the outcome of this
case.

Discussion

[24]        
Both the present action and application were filed before July 1, 2010,
when the new Supreme Court Rules came into effect. Rule 24‑1 of the new
civil rules provides that a proceeding started before that date will proceed
under the new rules, with this exception:

Step in ongoing proceeding

(14)  If a step in a
proceeding is taken before July 1, 2010, the former Supreme Court Rules apply
to any right or obligation arising out of or relating to that step if and to
the extent that that right or obligation is to have effect before September 1,
2010.

[25]        
In my view, the defendant’s application for discovery of documents
constitutes a step in a proceeding that was taken before July 1, 2010, and the
right or obligation will have effect before September 1, 2010. Accordingly, the
former Supreme Court Rules, and specifically Rule 26 governing the discovery
and inspection of documents, continue to apply to this application.

[26]        
Rule 26 permits each party to an action to obtain discovery of all
documents in the possession or control of the other that are relevant to the
action and are not protected from disclosure by privilege or some other legal
exemption. Where a party does not voluntarily produce a required document, the
court may order that it be produced:

Order to produce document

(10)      The court may order the
production of a document for inspection and copying by any party or by the
court at a time and place and in the manner it thinks just.

[27]        
Rule 26 also provides for production of documents in the possession or
control of third parties. A party may apply for such production where it is not
provided voluntarily:

Idem

(11)      Where a document is in
the possession or control of a person who is not a party, the court, on notice
to the person and all other parties, may order production and inspection of the
document or preparation of a certified copy that that may be used instead of
the original. An order under Rule 41(16) in respect of an order under this subrule
may be made if that order is endorsed with an acknowledgement by the person in
possession or control of the document that the person has no objection to the
terms of the proposed order.

[28]        
The general principles that govern an application under Rule 26(11) were
considered in Dufault v. Stevens (1978), 86 D.L.R. (3d) 671 (B.C.C.A.). The
initial step is for the applicant to satisfy the court that the application is
not in the nature of a fishing expedition, and that document in question
contains information which may relate to a matter in issue. As explained in the
oft‑cited Compagnie Financiere et Commerciale du Pacifique v. Peruvian
Guano Co. (1882), 11 Q.B.D. 55 (C.A.), a document relating to a matter in
issue is one which directly or indirectly may enable the party to advance his
own case or destroy that of his adversary or which may fairly lead him to a
train of inquiry or disclose evidence which may have either of these
consequences.

[29]        
Where the court is satisfied of the relevance of the document, it should
order production unless there are compelling reasons not to; for instance, the
document is privileged or “grounds exist for refusing the application in the
interest of persons, not parties to the action, who might be embarrassed or
affected adversely by an order for production”, including the custodian of the
document (at para. 12). Before denying production on the grounds of
embarrassment or adverse effect on a third party, the court should be satisfied
that (1) the probative value of the information contained in the document is
slight; and (2) production would cause such embarrassment or adverse effect
that it would be unjust to require production.

[30]        
Subject to these considerations, a party is entitled to an order under
Rule 26(11) notwithstanding that the document may contain some information
which is irrelevant or embarrassing.

[31]        
The plaintiff consents to the production of Dr. Segers’ medical
records from November 2, 2002 to October 27, 2004 pursuant to a Halliday
order. In Gorse v. Straker, 2010 BCSC 119, Macaulay J. engaged in a
thorough analysis of what is required to trigger the protections of such an
order. The safeguards present in Halliday orders ensure the necessary
balancing to provide relevant information while avoiding the disclosure of
private, potentially embarrassing, irrelevant information to an opposing
litigant.

[32]        
As Macaulay J. explained, the starting point, based on Dufault,
is for the applicant to satisfy the court that the documents in questions are
relevant within the meaning of Peruvian Guano, and that the application
is not in the nature of a fishing expedition. He emphasized that Dufault
requires the production of documents that are relevant as defined in Peruvian
Guano, even if private; it is the subject matter, regardless of privacy
considerations, which determines relevance.

[33]        
Macaulay J. did not endorse the proposition that a Halliday
order should be granted whenever there is a potential privacy interest in the
documents in question. Rather, he held that the court must first be satisfied
on the evidence that the record is likely to contain irrelevant, private
information. Where a record is likely to contain not only relevant producible
information but also irrelevant private information, the order for production
should be in Halliday format.

[34]        
As noted, the decision whether to make a Halliday order must be
evidence based, though the evidentiary burden is not an onerous one. The
evidence necessary to support a conclusion that the particular records are
irrelevant will vary according to the content of the pleadings and the nature
of the record. Macaulay J. stated that the party alleging the adverse
impact on his or her privacy interest should ordinarily swear an affidavit
setting out, at least in general terms, the nature of the privacy interest,
though this is not an absolute requirement so long as there is other admissible
evidence on the point. The evidence need not disclosure all the details of the
privacy interest but must be sufficient to reasonably identify the nature of
the interest and why it appears to be unrelated to any material issue in the
litigation.

Costs

[35]        
The defendant seeks costs in any event of the cause, submitting that the
plaintiff should have produced the requested information, particularly her
calendars, without the necessity for the application.

Decision

[36]        
I am satisfied, first of all, that the plaintiff was a principal of
6769969 Canada Limited from its incorporation and that the financial statements
and income tax returns for this company may be relevant to the plaintiff’s
claim for past income loss and any impairment of her opportunity to earn income
in the future. I am also satisfied that the plaintiff has possession or control
of any medical receipts relating to her claimed on her pre‑motor vehicle
accident income tax returns. There will, therefore, be an order that within 14
days of these reasons she produce those medical receipts, as well as the income
tax returns and financial statements for the company.

[37]        
I am also satisfied that the calendar or calendars from which the
plaintiff recorded her hours of work be copied and produced to the solicitor
for the defendant within 14 days of the date of this order. I would not expect
any personal or confidential matters to be recorded on a calendar and clearly
the original calendar is the best evidence of the matters recorded.

[38]        
If the plaintiff is in possession or control of any computer printouts
showing her hours of work, then those too are relevant and must be produced to
the solicitor for the defendant within 14 days of this order.

[39]        
I am not persuaded that the statements of profit and loss and the
financial statements for Spartan Refrigeration are in the possession or control
of the plaintiff. To the extent that those documents are in the possession or
control of Patrick Ash, then I am satisfied they may be relevant and copies
must be produced to the solicitor for the defendant within 14 days from this
order.

[40]        
I am not persuaded that lists of clients and contact people for jobs the
plaintiff would have attended upon or contact information for journeymen or
lists of all employees are in any way relevant to the plaintiff’s claims. The
name and the address of “Danny” who replaced the plaintiff following the
accident is relevant and there will be an order that any contact information in
the possession or control of the plaintiff or Mr. Ash be provided to the
solicitor for the defendant within 14 days. Similarly, I am satisfied that any
information or correspondence from Revenue Canada regarding an audit of 6769969
Canada Limited be produced to the solicitor for the defendant within 14 days of
this order.

[41]        
With regard to the medical records of Dr. Segers, I understand that some
of these have been provided, following the delivery of the notice of motion.
There will be an order that Dr. I. Segers shall make and deliver to the
solicitor for the defendant a certified copy of all clinical records, including
x‑rays, CT and MRI scans, relating to the plaintiff, as well as records
outlining the medical history of the plaintiff and copies of any reports from
consulting physicians and all other records and tests relating to the mental
and physical health of the plaintiff from November 20, 2002 to October 27, 2004
and January 24, 2009 to the present.

[42]        
The application for contact information for Currie Sandana (set out in
paragraph 1 b. of the motion) as well as the relief sought in paragraphs 5 and
6 of the motion will be adjourned generally.

[43]        
The defendant will have his costs of this application at Scale B.

“T.R. Brooke J.”