IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120302

Docket: M105994

Registry:
Vancouver

Between:

Alexander Stephen
Gilbert

Plaintiff

And

Stephen Curtis
Nelson

Defendant

Before:
Master Taylor

Reasons for Judgment

[1]            
On June 6, 2005, when the plaintiff, Alexander Gilbert was 13 years of
age, he was riding his bicycle in and near the driveway of his home outside of Nanaimo,
in a rural area called Cedar, B.C.  Unfortunately, the young cyclist was struck
by the van driven by the defendant.  Currently, the issue of liability has yet
to be determined by the court, although the defendant, through his insurer,
ICBC, has denied liability for the accident and subsequent injuries suffered by
the young man as a result of the accident.  In fact, the defendant alleges that
the young plaintiff rode his bicycle out of his driveway without stopping and
right into the path of the defendant’s van.

[2]            
This is an application by the plaintiff for an order that the defendant
provide to the plaintiff a copy of the unedited CWMS notes from June 6, 2005,
to December 9, 2010.  As well, the plaintiff seeks an order that three
documents over which privilege is claimed be produced for inspection.  The
three documents include a report of an independent adjuster dated September 11,
2009, a report to ICBC from an engineer dated September 28, 2005, and a report
to ICBC from an engineer dated April 11, 2006.  The defendant is opposed to the
disclosure of all of the CWMS notes, but has produced some of them in a
redacted format.  The defendant is also opposed to production of the three
sought-after reports and claims privilege over them.

[3]            
Interestingly, the defendant has produced a report from Baker Materials
Engineering Ltd. dated March 1, 2006, over which at one time the defendant was
claiming privilege.

[4]            
In the notice of civil claim, commenced in July, 2010, some of the
plaintiff’s injuries are identified as follows:

 Traumatic Brain Injury;

 Fractured fibula and tibia requiring fasciotomy
and surgical nailing;

 Fractured rib;

 Left arm and wrist injury and left ankle injury;

 Dental damage;

 Soft tissue injuries;

 Chronic pain;

 Psychiatric and psychological sequelae arising
from the injuries.

[5]            
The accident was initially reported to ICBC by the boy’s father on June
7, 2005 and ICBC records show that Julia Fall was assigned as adjuster to the
file on the same day.

[6]            
In an affidavit filed in these proceedings, Ms. Fall, who is now
retired, deposes to the fact that she telephoned David Gilbert, the boy’s
father on June 7, 2005 to enquire about his son’s injuries.  She further
deposes that she learned the young man was unconscious and had been since the
accident the day before.  Ms. Fall also learned that the boy suffered a badly
broken leg and other injuries, the specifics of which were unknown at the time.

[7]            
At paragraph 7 of her affidavit, Ms. Fall deposes as follows:

7.         From the first day
that I learned about the accident, the plaintiff’s young age, the fact that the
plaintiff was a cyclist struck by a van, and the severity of the plaintiff’s
injuries which included a likely head injury were all factors that immediately
put me on alert that litigation was a likely possibility.

[8]            
Further in her affidavit, Ms. Fall describes attending the defendant’s
residence on June 8, 2005 with an ICBC estimator.  She also attended the scene
of the accident that same day and took photographs of the accident scene, the
purpose of which, she says, was to assist her in her assessment of liability
and also to preserve evidence for the eventual litigation.

[9]            
When she returned to her office that day, Ms. Fall made some notes
including this entry: “Insured travelling on country road.  T/P (13 year old
cyclist) rode bike out of driveway onto roadway in front of insured’s vehicle. 
Still under investigation, but would appear our insured is not liable”.

[10]        
Ms. Fall explains using the words, “still under investigation” because
she still hadn’t received the RCMP Accident Reconstructionist Report and
because she says she knew the investigation would be ongoing for the purpose of
litigation.

[11]        
On June 13, 2005, Ms. Fall met with Mr. Gilbert.  She says she told him
at the outset of the meeting that there did not appear to be negligence on the
part of the driver, Mr. Nelson.  She confirmed to Mr. Gilbert that their
investigation was not complete, and says she said this because she was still
awaiting the receipt of the RCMP report, and because “I knew the investigation
would be ongoing for the purposes of litigation”.

[12]        
The defendant relies heavily on the affidavit of Ms. Fall and affidavits
of two subsequent adjusters who dealt with the file.  In particular the
defendant relies on paragraphs 18 to 20 of the affidavit of Ms. Fall for a
determination of litigation privilege.  Accordingly, I reproduce all three paragraphs
in their entirety:

18.       On June 13, 2005, following my meeting with David
Gilbert, I believed that litigation was certain based on the following facts
and information:

 a. Alex Gilbert was a child cyclist struck by a
van;

 b. the plaintiff’s injuries were very serious
including a suspected head             injury and being in a medically induced
coma with an unknown             prognosis;

 c. Mr. Gilbert indicated to me that he intended
to retain counsel; and

 d. Liability would be denied based on the
following:

 i. Mr. Nelson’s description of the
accident including the fact             that the cyclist came flying out of
the driveway;

 ii. Mr. Nelson’s confirmation that
the RCMP did not give him a                         ticket after the accident;

 iii. My view of the scene of the
accident, including the bushes                         and foliage that
restrict the view of both parties; and

 iv. There were no other witnesses to
the accident.

19.       Furthermore, after my meeting with Mr. Gilbert on
June 13, 2005, all investigations into insurance issues such as coverage and
how ICBC would treat the liability issue were complete.  For example:

 a. Part 7 benefits were being paid and there was
no investigation with             respect to entitlement to Part 7 benefits;

 b. Mr. Nelson’s third party liability coverage
was in order;

 c. There were no identifiable breaches on the
part of Mr. Nelson;

 d. There was never a property claim made by the
Gilbert’s in respect             of the bicycle; and

 e. Liability had been determined for the purposes
of insurance.

From that point forward all steps I took were for the purpose
of gather evidence and assisting with the anticipated tort action.

20.       Therefore, I concluded
my June 13, 2005 note summarizing my meeting with David Gilbert with the
statement that “All further action I take on this file will be in anticipation
of litigation.”  …

[13]        
As well, Ms. Fall deposes to having had a phone call with Mr. Gilbert on
June 15, 2005, where she advised him that her position with respect to
liability had not changed.  In reply Mr. Gilbert is reported to have said he
was “getting his ducks in a row”, which Ms. Fall took to mean that Mr. Gilbert “was
preparing for litigation”.

[14]        
The defendant relies on two more affidavits of examiners who assumed
conduct of the file after Ms. Fall, who only had conduct until December 12,
2005.  Thereafter, Ingrid Franzke, a claims examiner, had conduct of the file
from December 12, 2005 to March 2008, and then Paula Simpson, another claims
examiner, assumed conduct of the file on September 9, 2008.  Thus, it would
appear no one at ICBC had conduct of the file from March, 2008 to September 9,
2008.

[15]        
Essentially, each of the two subsequent examiners with conduct of the
file depose to exactly the same reasons in exactly the same words as Ms. Fall
for determining that litigation was certain.

[16]        
As it turns out, nothing was done by the plaintiff until he retained
counsel and a notice of civil claim was filed on December 9, 2010.  The response
to notice of civil claim was filed on March 4, 2011.  The trial date in this
matter has been set for June 25, 2012 for 14 days.

[17]        
From the date of the accident, until July, 2010, no lawyer was ever
retained to act for the plaintiff.

[18]        
On or about July 7, 2010, the plaintiff’s solicitors wrote to ICBC making
a Freedom of Information and Protection of Privacy Act (“FOI”) request
for the complete file regarding the plaintiff.

[19]        
The office of plaintiff’s counsel eventually received documents on
December 2, 2010 from the FOI request.  The file is 947 pages in length. 
Apparently, the file contains heavily redacted adjuster’s notes, called CWMS
notes, for the dates of June 7, 2005 to June 13, 2005.

[20]        
Of particular note and importance to the plaintiff’s submissions is that
a CWMS entry by Ms. Fall on June 13, 2005 indicates that Ms. Fall confirmed in
conversation with Mr. Gilbert that her investigations were not yet complete. As
well, the plaintiff points to the CWMS entry on June 15, 2005 where Ms. Fall
indicated a discussion with Mr. Gilbert informing him that the traffic analyst
“report would not be available until August, at which time we [ICBC] would be
ordering a copy, and after review of same, would review liability and make
assessment at this time.”

[21]        
The plaintiff also points to the January 10, 2006 CWMS entry which
indicates that Naseem Rahiman, an employee at ICBC, wrote to an individual
working for the B.C. Health Insurance Plan as follows : “please note that we
are unable to pay this account at this time as liability is still in dispute
and we are still investigating this loss.”

[22]        
In response to correspondence from plaintiff’s counsel requesting copies
of the complete unredacted CWMS notes plus the documents listed in part 4 of
the defendant’s List of Documents, wherein litigation privilege is claimed, the
defendant’s counsel responded by claiming that the Part 4 documents and the
CWMS notes created after June 13, 2005 were made in contemplation of litigation. 
Attached in the correspondence were unredacted CWMS notes created prior to June
13, 2005 and an amended list of documents.  Defence counsel continued to claim
privilege over the documents as they were made “by a professional expert
commissioned to investigate liability in the tort claim.”

Discussion and Analysis

[23]        
Both parties agree that the decision of our Court of Appeal in Hamalaninen
v. Sippola, [1991] B.C.J. No. 3614, [1992] 2 W.W.R. 132, 62 B.C.L.R.
(2d) 254 sets out the test to be applied in an application such as this.  That
test is set out by Wood, J.A., (as he then was) as follows:

 Regardless of the terminology used to apply it, the
correct rule, as adopted in Voth, is that stated by Barwick C.J. of the
Australian High Court in Grant v. Downs (1976), 135 C.L.R. 674 at p. 677:

     Having
considered the decisions, the writings and the various aspects of the public
interest which claim attention, I have come to the conclusion that the court
should state the relevant principle as follows: a document which was produced
or brought into existence either with the dominant purpose of its author, or of
the person or authority under whose direction, whether particular or general,
it was produced or brought into existence, of using it or its contents in order
to obtain legal advice or to conduct or aid in the conduct of litigation, at
the time of its production in reasonable prospect, should be privileged and
excluded from inspection.

     Any attempt to apply the rule
when determining a claim of privilege with respect to a document necessarily
requires that two factual determinations be made:

(a)  Was litigation in reasonable prospect at the time
it was produced, and

(b)  If so, what was the dominant purpose for its
production?

(a) Was litigation "in reasonable prospect" at the
time these documents were produced?

     The
onus is on the party claiming privilege to establish on a balance of
probabilities that both tests are met in connection with each of the documents
falling within the claim. As was so in the Shaughnessy Golf Club case, no
effort was made in the material filed by the defendant in this case to
distinguish one document from another in meeting that onus. The assumption
seems to have been that by establishing that litigation was in reasonable
prospect from the outset, the claim of privilege must necessarily prevail.

[24]        
In regard to whether litigation was in reasonable prospect, Wood, J.A.
said this:

In my view litigation can
properly be said to be in reasonable prospect when a reasonable person,
possessed of all pertinent information including that peculiar to one party or
the other, would conclude it is unlikely that the claim for loss will be
resolved without it. The test is not one that will be particularly difficult to
meet.

[25]        
Following this analysis, it would seem to me that given the alleged
circumstances of the particular accident in the case at bar, and the nature of
the injuries suffered by Alexander Gilbert, that litigation would be a distinct
possibility from the time the accident was first reported on June 6, 2005.

[26]        
What is more difficult to determine is the dominant purpose for which
the documents were produced.  It is clear from the Court of Appeal analysis in Hamalainen
that each document must be reviewed for its purpose, and that a blanket
privilege cannot be granted just because the privilege is claimed.

[27]        
Wood, J.A. conducts the analysis thusly:

 Even in cases where litigation is in reasonable
prospect from the time a claim first arises, there is bound to be a preliminary
period during which the parties are attempting to discover the cause of the
accident on which it is based. At some point in the information gathering
process the focus of such an inquiry will shift such that its dominant purpose
will become that of preparing the party for whom it was conducted for the
anticipated litigation. In other words, there is a continuum which begins with
the incident giving rise to the claim and during which the focus of the inquiry
changes. At what point the dominant purpose becomes that of furthering the
course of litigation will necessarily fall to be determined by the facts
peculiar to each case.

     In
that sense there is obviously no absolute rule that the decision to deny
liability in such a claim must mark the point in which the conduct of
litigation becomes the dominant purpose underlying the production of each and
every document of the sort for which privilege was claimed in this case.

[28]        
The Supreme Court of Canada discussed litigation privilege in the
context of a claim to documents in the possession of the Crown but after the
litigation had ceased in Blank v. Canada (Minister of Justice), [2006] 2
S.C.R. 319, 2006 SCC 39.  According to the Supreme Court of Canada, the claim
to litigation privilege is waning especially in light of the on-going principle
of disclosure.  At paragraphs 59 – 61, Fish, J. said this in confirming the
dominant purpose test:

59           
                 
The question has arisen whether the litigation privilege should attach to
documents created for the substantial purpose of litigation, the dominant
purpose of litigation or the sole purpose of litigation.  The dominant
purpose test was chosen from this spectrum by the House of Lords in Waugh v.
British Railways Board, [1979] 2 All E.R. 1169.  It has been adopted
in this country as well: Davies v. Harrington (1980), 115 D.L.R. (3d)
347 (N.S.C.A.); Voth Bros. Construction (1974) Ltd. v. North Vancouver
School District No. 44 Board of School Trustees (1981), 29 B.C.L.R. 114
(C.A.); McCaig v. Trentowsky (1983), 148 D.L.R. (3d) 724 (N.B.C.A.); Nova,
an Alberta Corporation v. Guelph Engineering Co. (1984), 5 D.L.R. (4th) 755
(Alta. C.A.);  Ed Miller Sales & Rentals; Chrusz; Lifford;
Mitsui; College of Physicians; Gower.

60           
                  I
see no reason to depart from the dominant purpose test.  Though it
provides narrower protection than would a substantial purpose test, the
dominant purpose standard appears to me consistent with the notion that the
litigation privilege should be viewed as a limited exception to the principle
of full disclosure and not as an equal partner of  the broadly interpreted
solicitor-client privilege.  The dominant purpose test is more compatible
with the contemporary trend favouring increased disclosure.  As Royer has
noted, it is hardly surprising that modern legislation and case law

[translation] which increasingly attenuate the purely
accusatory and adversarial nature of the civil trial, tend to limit the scope
of this privilege [that is, the litigation privilege]. [p. 869]

Or, as Carthy J.A. stated in Chrusz:

The modern trend is in the direction of complete discovery
and there is no apparent reason to inhibit that trend so long as counsel is
left with sufficient flexibility to adequately serve the litigation client. [p.
331] 

61     
                 
      While the solicitor-client privilege has been
strengthened, reaffirmed and elevated in recent years, the litigation privilege
has had, on the contrary, to weather the trend toward mutual and reciprocal
disclosure which is the hallmark of the judicial process.  In this
context, it would be incongruous to reverse that trend and revert to a
substantial purpose test.

[29]        
Six months before the decision in Blank by the Supreme Court of
Canada, Madam Justice Gray of our court in Keefer Laundry Ltd. v. Pellerin
Milnor Corp. et al, 2006 BCSC 1180, addressed what information was required
from a party claiming litigation privilege as well as the care to be taken when
providing such information.  She wrote at paragraphs 98 and 99:

[98]           
To establish “dominant purpose”, the party asserting the privilege will have to
present evidence of the circumstances surrounding the creation of the
communication or document in question, including evidence with respect to when
it was created, who created it, who authorized it, and what use was or could be
made of it.  Care must be taken to limit the extent of the information
that is revealed in the process of establishing “dominant purpose” to avoid
accidental or implied waiver of the privilege that is being claimed.

[99]           
The focus of the enquiry is on the time and purpose for which the document was
created.  Whether or not a document is actually used in ensuing litigation
is a matter of strategy and does not affect the document’s privileged status.
 A document created for the dominant purpose of litigation remains
privileged throughout that litigation even if it is never used in evidence.

[30]        
I observe that the finding of the dominant purpose is fact specific to
each and every case.

[31]        
In the case at bar, the court has been left with affidavits of 3
adjusters or claims examiners who have opined that litigation is certain.  As
well, the defendant has produced an affidavit from Tim Harper, an engineer in
the employ of Baker Materials Engineering Ltd.

[32]        
Mr. Harper deposes to being retained by Ms. Fall on or about June 20,
2005 to attend the scene of the accident and to gather facts and information to
assist Ms. Fall in preparing for litigation.

[33]        
Mr. Harper was asked to prepare a report in February 2006 and did so. 
His report is dated March 1, 2006 and is the report that the defendants have
chosen to disclose to the plaintiff in these proceedings.  This report
concludes that the condition of the tires on the defendant’s vehicle was not a
factor in the accident, and the speed of the van at the time of impact was in
the range of 46 to 56 km/h.

[34]        
Mr. Harper apparently was requested by Ms. Franzke to do further work
and he created a report dated April 11, 2006, which is one of the reports over
which the defendants claim privilege.  Mr. Harper says in his affidavit that he
“believed that [his] work product was being prepared for the dominant purpose
of litigation …” How I could give any weight to Mr. Harper’s assertion
was not addressed by counsel seeking to rely on his affidavit.

[35]        
Saying that litigation is a certainty is not the test for the dominant
purpose.

[36]        
What I do observe from the facts before me is that no counsel was
consulted or retained by the defendant or his insurer until after the notice of
civil claim was issued in July, 2010.  While the retainer of counsel is not an
absolute test as to whether or not documents were created for the dominant
purpose of litigation, it is but one factor in this case that indicates that
the defendant and his insurer were not preparing for litigation nor directing
the course of the defence of a possible law suit, until a notice of civil claim
was issued some five years post accident.  One would have thought that the defendants
would have sought to establish the dominant purpose by showing on a balance of
probabilities that the dominant purpose of the documents was to obtain legal
advice or to aid in the conduct of the litigation.

[37]        
Most certainly the defendant and his insurer had followed a course of
investigating the accident, and its dynamics, but other than telephone
conversations Ms. Fall had with Mr. Gilbert on June 13 and 15, 2005, there is
no evidence before me that the defendant or his insurer made a formal
declaration to the Gilbert family by way of letter that liability for the
accident was being denied.  In my view, a reasonable person would expect no
less especially after the family was told that an assessment of liability would
be made after receipt of the traffic analyst’s report which was anticipated to
be received by Ms. Fall in August, 2005.

[38]        
In all of the circumstances, I find that the defendant hasn’t met the
onus on him to satisfy me that there exists over either the CWMS notes or the
reports currently listed in Part 4 of the Defendant’s List of Documents a
litigation privilege, such that disclosure of the documents up to the date of
the first letter from counsel for the plaintiff should not be made to the
opposite party.  The only caveat will be that all references to reserves are to
be redacted.

[39]        
The plaintiff shall have his costs for preparation for, and attendance
at the hearing.

“Master
G. Taylor”