IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: | British Columbia v. Tekavec, |
| 2012 BCSC 1348 |
Date: 20120911
Docket: 12-2563
Registry:
Victoria
Between:
Her
Majesty the Queen in right of the Province of British Columbia
Plaintiff
And:
Louis
Peter Tekavec and Louis PeterTekavec doing business as
Goldcrest Apartments
Defendants
Before:
The Honourable Mr. Justice Williams
Reasons for Judgment
Counsel for Plaintiff: | P. D. Ameerali |
Counsel for Defendants: | D. H. Christie |
Place and Date of Hearing: | Victoria, B.C. August 30, 2012 |
Place and Date of Judgment: | Victoria, B.C. September 11, 2012 |
[1]
This is an application by the plaintiff, Her Majesty the Queen in right
of the Province of British Columbia (HMTQ) for an order that:
1. The
pleadings of the defendant, Louis Peter Tekavec, be dismissed and this action
proceed as though no Reply had been filed by him.
Or in the alternative;
2. Both
Edward Alexander Jack and the defendant, Louis Peter Tekavec, are released from
an implied undertaking arising in the litigation decided in Jack v. Tekavec,
2010 BCSC 1773.
3. The
defendant, Louis Peter Tekavec, must list the discovery transcripts and any
other relevant documents received from Edward Alexander Jack or created in the
litigation decided in Jack v. Tekavec, 2010 BCSC 1773 or his List of
documents as appropriate relative to their content.
4. Edward
Alexander Jack may release to the plaintiff documents or discovery transcripts
received from the Louis Peter Tekavec or created during the litigation decided
in Jack v. Tekavec, 2010 BCSC 1773.
5. The
plaintiff may make use of the discovery transcripts from Jack v. Tekavec,
2010 BCSC 1773 as if the discovery evidence had been given in this action.
And in either case:
6. The plaintiff is entitled to
the costs of this application from the defendant.
Background
[2]
The plaintiff has brought an action in accordance with the Health
Care Costs Recovery Act, S.B.C. 2008, c. 27 (the Act). I will
refer to that proceeding as the present action.
[3]
The defendant is the owner/manager of an apartment building located in
Gold River, B.C. In June 2007, Edward Alexander Jack was visiting
with two tenants of the apartment building. Mr. Jack leaned against the
balcony railing which gave way. He fell three stories, sustained serious
injuries and spent some substantial time in hospital and receiving medical
care.
[4]
Mr. Jack sued Mr. Tekavec. Following trial before Savage J., Mr. Tekavec
was found liable for Mr. Jacks injuries and recovered an award of damages.
I will refer to that litigation as the original action.
[5]
HMTQ seeks to recover from Mr. Tekavec the costs of health care
that were received by Mr. Jack as a consequence of the event.
[6]
In the course of the present action, the plaintiff has requested that Mr. Tekavec
release and disclose certain documents from that original action: specifically,
the plaintiff seeks transcripts of the examination for discovery of Mr. Tekavec
and the notice to admit which was in evidence at the original trial.
[7]
Mr. Tekavec resists the disclosure sought. He takes the position
that the items at issue are subject to an implied undertaking because of their
status in the previous lawsuit and that the court can only order the lifting of
that condition in limited circumstances, not present in this case. He says that
HMTQ was not a party to that action; he says that the issues in the present
action are different than those in the original action, as are the pleadings.
In his submission, those are the types of considerations that militate against
the court ordering the release of such materials.
[8]
In addition, he says that there are other aspects of the matter that
should cause the court to rule against production, namely that the applicant is
pursuing an ulterior motive. As I understand, he contends that HMTQ seeks these
materials in order to establish that Mr. Tekavec was responsible for the
injuries, but wishes to avoid calling the evidence of Mr. Jack or the
other two persons who were present at the time of the event, Ms. Mark and Mr. Billy,
and having them subject to cross-examination. It is Mr. Tekavecs view
that these witnesses were not properly cross-examined at the trial before
Savage J., and if they had been, findings of contributory negligence and novus
actus interveniens would have likely resulted, and that would have been to
the benefit of him (Mr. Tekavec). He has now issued third party notices to
those persons in the present action.
[9]
Finally, Mr. Tekavec submits that certain admissions which he was
found to have made at the first trial by virtue of a notice to admit should not
be allowed to stand as evidence in the present action and he takes the position
that he should be permitted to withdraw those admissions. He says that HMTQs
attempt to require him to disclose that evidence by way of this application is
an unfair endeavour to adduce those admissions and should accordingly be
denied.
The Legal Concepts
[10]
The application at bar raises two issues: the effect of the implied
undertaking principle as it applies to materials generated in other litigation
and the obligation to disclose the existence of such materials (where they are
relevant) as part of the document discovery process in subsequent litigation.
[11]
It is a fundamental rule of the litigation model that information, both
documentary and oral, obtained by a party through the discovery process is
subject to an implied undertaking. It cannot be used by any other party (i.e.
other than the originator) except for the purpose of the litigation in which it
was produced. The undertaking is essentially perpetual: it survives the
resolution of the litigation in which the discovery was made. The restriction
can be modified only by court order or with the consent of the party with whom
the material originates.
[12]
The principle is authoritatively articulated in Juman v. Doucette, 2008
SCC 8, and the underlying rationale is discussed there at some length. For the
purpose of the present discussion, there is no point to delving into that.
[13]
Where a court order is sought to relieve against the implied
undertaking, the applicant will have the onus of satisfying the court on a
balance of probabilities that the interest to be advanced through the sought-after
disclosure is greater than the values that underpin the rationale for the
implied undertaking. Central to the analysis will be a careful consideration of
any prejudice that will be caused to the party who initially provided the
material at issue. Of course, it goes without saying that the material must be
relevant to the issues in the action in which the disclosure is sought.
[14]
In Juman, at paragraph 34, the Court set out the applicable test,
the test that has been formulated in those Canadian jurisdictions which have
enacted rules governing applications to alleviate the restrictions of the
implied undertaking and which generally reflects the common law position:
If satisfied that the interest of justice outweighs any
prejudice that would result to a party who disclosed evidence, the court may order
that [the implied or deemed undertaking] does not apply to the evidence or to
information obtained from it, and may impose such terms and give such
directions as are just.
[15]
The Court then went on to comment upon practical considerations that
will be relevant:
35. The case law provides some guidance to the exercise
of the court’s discretion. For example, where discovery material in one action
is sought to be used in another action with the same or similar parties and the
same or similar issues, the prejudice to the examinee is virtually non-existent
and leave will generally be granted. See Lac Minerals Ltd. v. New Cinch
Uranium Ltd. (1985), 50 O.R. (2d) 260 (H.C.J.), at pp. 265-66; Crest
Homes, at p. 1083; Miller (Ed) Sales & Rentals Ltd. v.
Caterpillar Tractor Co. (1988), 90 A.R. 323 (C.A.); Harris v. Sweet,
[2005] B.C.J. No. 1520 (QL), 2005 BCSC 998; Scuzzy Creek Hydro &
Power Inc. v. Tercon Contractors Ltd. (1998), 27 C.P.C. (4th) 252
(B.C.S.C.).
36. On the other hand, courts have generally not favoured
attempts to use the discovered material for an extraneous purpose, or for an
action wholly unrelated to the purposes of the proceeding in which discovery
was obtained in the absence of some compelling public interest. See, e.g., Lubrizol
Corp. v. Imperial Oil Ltd. (1990), 33 C.P.R. (3d) 49 (F.C.T.D.), at
p. 51. In Livent Inc. v. Drabinsky (2001), 53 O.R. (3d) 126
(S.C.J.), the court held that a non-party to the implied undertaking could in
unusual circumstances apply to have the undertaking varied, but that relief in
such cases would virtually never be given (p. 130).
[16]
As a general observation, it seems clear that the courts general
approach will be that an undertaking should only be set aside in exceptional
circumstances. That said, I have examined the decision in Livent, supra;
it does not materially affect the outcome of the present application.
[17]
In short summary, the test will require that the applicant demonstrate
that the evidence is relevant and that any prejudice to be suffered by the
examinee is clearly outweighed by the legitimate interest in disclosure.
[18]
The application at bar raises another issue: what are the
responsibilities and obligations of a party who is involved in litigation and
who has possession of materials from another action, materials which are subject
to the implied undertaking and which appear to have relevance to the subsequent
action? As discussed earlier, it is clear that such materials cannot be
disclosed unless there has been a waiver by the party from whom the materials
emanated or the court has ordered disclosure. However, there is also the matter
of how the materials are to be dealt with in the context of the litigants
obligation to make discovery in accordance with the relevant rule of court,
that is Rule 7-1.
[19]
In Chonn v. DCFS Canada Corp. dba Mercedez-Benz Credit Canada,
2009 BCSC 1474, Voith J. examined that issue in some detail. After a careful
examination of the relevant authorities, he concluded that where such documents
are in the possession or control of a party and are relevant, they are subject
to the rule of disclosure. His conclusion is that the party in possession,
unless that party has consent or leave to use the documents, would be both
required and entitled to list such documents on part three of any list of
documents it generated.
[20]
I see no basis to doubt the correctness of that view.
Application to the Present Case
[21]
In this application, the plaintiff specifically seeks the transcripts of
the examination for discovery of Mr. Tekavec in the original action. As
noted, Mr. Tekavec declines to produce those. The plaintiff is not seeking
transcripts of the examination for discovery of Mr. Jack.
[22]
A conceptually similar issue was dealt with by Ehrcke J. in Wilson v.
McCoy, 2006 BCSC 1011. Although his ruling pre-dated the decision of the
Supreme Court of Canada in Juman, the discussion and conclusion are, in
my view, entirely applicable to the circumstances at bar. There, in the context
of a subsequent personal injury action, the defendant sought disclosure of
certain materials, namely the examination for discovery of the plaintiff, and
certain wage loss documents from the previous action. The plaintiff opposed
that application.
[23]
Ehrcke J. stated as follows:
8. This raises the issue of the scope of the implied
undertaking. Counsel for the defendant submits that the implied undertaking
only applies to those documents which a party obtained from an opposing party
through the compulsion of the discovery process. He submits that the implied
undertaking does not prevent or shield a party from producing in new litigation
items that came from that party herself in the previous litigation.
[24]
Justice Ehrcke examined previous judicial authorities dealing with the
issue, and concluded that there was a common theme; that the undertaking was
conceived as one that binds an adversary in litigation who obtains documents
from the opposing party through the compulsion of the discovery process.
[25]
Ultimately, he concluded:
Accordingly, I agree with counsel for the defendant that the
plaintiff in the present case is not bound by an undertaking to withhold from
the present defendant materials that she herself produced to the previous
defendants in the previous action. Rather, the implied undertaking that binds
her from the previous action is that she will not produce materials which she
obtained from the defendants the previous action.
[26]
I find that analysis and that conclusion to be apt in the present
matter, and effectively dispositive of the issue.
[27]
In my view, in the facts at bar, it is not open to Mr. Tekavec to resist
disclosure of the transcript of his own examination for discovery or any other
material that he created on the basis of an implied undertaking as described by
the Supreme Court of Canada in Juman. The items in question are of his
own creation; they do not fall under the category of materials obtained from
another party in the previous action and thus are not subject to the implied
undertaking restriction. The same would apply to Mr. Jack with
respect to the transcript of his own examination for discovery or other
material he generated in the original action.
[28]
As for material in the possession or control of Mr. Tekavec which
he obtained from other parties in the course of the discovery phase of the
original action, that is subject to an implied undertaking, and he is not at
liberty to disclose or otherwise deliver it to anyone else, unless there is
either consent from the originator of the material or an order of the court,
holding that the implied undertaking does not apply in the particular
circumstances.
[29]
In the matter at hand, it is my conclusion that the circumstances
warrant an order overriding the protection of the implied undertaking. The
basis for so deciding is that, while the applicant HMTQ was not a party to the
original action, the principal issue in the present action is compellingly similar
to the issue there: was Mr. Tekavec responsible for the injuries that were
sustained by Mr. Jack? I note as well the following: Mr. Jack has
apparently indicated that he has no objection to the materials being disclosed
to the applicant. There would be no prejudice to Mr. Jack if the materials
were to be disclosed. Finally, the same questions and topics that were
canvassed with Mr. Tekavec in the examination for discovery at issue could
be quite properly raised in his examination for discovery in the present action.
In effect, disclosure of the materials represents a proper means of proceeding
more efficiently.
[30]
There is of course the matter of the consent that Mr. Jack has
provided. In fact, that alone would be sufficient to require Mr. Tekavec
to disclose the material he has.
[31]
The application of HMTQ seeks an order of this Court requiring Mr. Tekavec
to list on his List of Documents the discovery transcripts and any other
relevant documents received from Mr. Jack in the original action. On the
basis of the discussion set out here, it will follow that there is in
circumstances such as these an obligation to list relevant materials which are
subject to the implied undertaking. Generally, because of the special status
impressed upon them by the implied undertaking and the requirement that the
detail or content not be disclosed, they are to be listed as subject to
privilege, that is, in Part 3 of the list. In the present circumstances, in
light of the order that they are now exempt from the implied undertaking, they
will be listed in Part 1.
[32]
The other arguments raised by Mr. Tekavec, the arguments that I described
earlier, do not, in my view, alter the outcome. With respect to the admissions
contained in the notice to admit, it is open to Mr. Tekavec to make
submissions and to adduce evidence to persuade the court, either the trial
judge or a chambers judge, that there is some relevant explanation that would
warrant the admissions being ruled inadmissible or of no effect. To the extent
that the evidence of the other witnesses, Mr. Jack, Ms. Mark and Mr. Billy,
can be developed in a way that will be more advantageous to Mr. Tekavec,
that can be accomplished in the course of the trial as it proceeds, given that
those persons will now be parties because of the third party notices.
[33]
The Notice of Application also sought an order that the plaintiff may
make use of the discovery transcripts from the original action, Jack v.
Tekavec, as if the discovery evidence had been given in the present action.
I decline to make that order. While I have ruled that the material should be
disclosed to the plaintiff, the ultimate evidentiary effect that those
transcripts should be assigned is a matter for the trial judge. Frankly, I
cannot say that I am fully aware of all the relevant considerations that might
bear upon the decision; there may be factors of which I am unaware that would
cause a court to rule that some parts of the evidence from that first trial
should not be admitted at the trial the present action. I am not prepared to
foreclose Mr. Tekavec from making arguments which he believes would
support an order for exclusion, and so I decline to make the order sought.
Alternative Relief
[34]
The Notice of Application sought two alternative remedies – either an
order that the defendants pleadings be dismissed and the action proceed as
though no Reply had been filed, or, alternatively, specific orders dealing with
the implied undertaking and the obligation to list. I have dealt with the
matter by way of orders relating to those specific issues. In my view, that is
the more appropriate course of action. The remedy of striking a partys defence
is a draconian measure and should generally be taken in extreme circumstances. It
is not warranted in the facts of this matter. I believe the orders I have made
provide a measured and proportionate outcome.
Summary
[35]
With respect to the materials in the possession or control of Mr. Tekavec,
arising from the original litigation, there is no implied undertaking
applicable to those materials which originated with or emanated from Mr. Tekavec;
specifically, and without limiting the generality of that holding, the
transcript of the examination for discovery of Mr. Tekavec and the notice
to admit, which he executed, are not subject to any implied undertaking.
[36]
In any event, for the purpose of the present action, given the
similarity between the original action and the present action, and other
relevant considerations, there is no implied undertaking applicable to the
materials in the possession or control of Mr. Tekavec which arise from or
relate to the original action.
[37]
For the purpose of the present action, again, given the similarity
between the original action and the present action, and other relevant considerations,
including his consent, there is no implied undertaking applicable to the
materials in the possession or control of Mr. Jack, which arise from or
relate to the original action. Mr. Jack may release to the plaintiff
documents or discovery transcripts received from Mr. Tekavec or created
during the original action.
[38]
Mr. Tekavec is obliged to list the items at issue in his list of
documents. Where such documents are subject to an implied undertaking, they are
to be listed in Part 3. In the present circumstances, and in view of the
conclusions set out herein, they are to be listed in Part 1.
[39]
I decline to make any order as to the evidentiary effect or use that may
be made of the materials in question in the present litigation. That is a
matter which should be decided by the court hearing the action.
[40]
With respect to costs, the applicant has been substantially successful
in this matter. There will be an order that the respondent, Mr. Tekavec,
will pay costs to the applicant at Scale B.
J. Williams J.
J.
Williams J.