IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20150810

Docket: S135991

Registry:
Vancouver

Between:

Dustin James
Kitsul

Plaintiff

And

Slater Vecchio LLP

Defendant

Before:
The Honourable Mr. Justice Voith

Reasons for Judgment

Introduction

[1]                 
The parties have advanced various cross-applications. The plaintiff, Mr. Kitsul,
seeks:

                          
i)         
leave to apply for a summary trial on the issue of liability; and

                        
ii)         
an order that the issue of liability be tried prior to, and separately
from, the issue of damages.

[2]                 
The defendant, in turn, seeks:

                          
i)         
an order that the plaintiff produce two separate documents over which a
claim of litigation privilege has been advanced in Part 4 of the plaintiff’s
list of documents.

[3]                 
The facts and chronology that underlie these various applications are
straightforward and are not, in the main, in dispute:

a)       On November 18, 2005, the
plaintiff was driving a truck owned by his employer, Trans Western Electric
Ltd. (Trans Western). Trans Western had provided the truck to Mr. Peters. Mr. Peters,
a foreman with Trans Western, and a friend and co-worker of the plaintiff, was
in the passenger seat of the truck. The two men were commuting to work and were
rear-ended while doing so. The plaintiff commenced an action seeking damages
from the driver and owner of the vehicle that rear-ended the truck he was
driving (the “MVA Action”). Liability in the MVA Action was admitted, and in
May 2012, the matter was set for a 15-day trial that was to commence on
November 25, 2013.

b)       In August 2012, the
defendants in the MVA Action brought an application pursuant to s. 257 of
the Workers Compensation Act, R.S.B.C. 1996, c. 492 (the “s. 257
Application”), seeking a declaration that the plaintiff was a worker in the
course of employment at the time of his accident. Success in the s. 257
Application would preclude the plaintiff from being able to advance the MVA
Action.

c)       In a decision dated
October 29, 2012, the Vice Chair of the Workers Compensation Appeal Tribunal (“WCAT”),
determined, inter alia, that the plaintiff was a worker within Part 1 of
the Workers Compensation Act and, more importantly, that his injuries
arose out of, or in the course of, his employment (the “WCAT Decision”).

d)       In the present action, the
plaintiff alleges that the defendant law firm’s handling of MVA Action was
negligent and in breach of his retainer agreement with the firm. The alleged
negligence on the part of the defendant, it is said, took the form of the
submissions made by the defendant firm to WCAT in response to the s. 257
Application.

[4]                   
More specifically, s. 257 Applications to WCAT are decided on the
basis of relevant policies, which are binding, and on the interpretation of
those policies. The plaintiff, in his notice of application, argues:

3.         Applications to WCAT under s. 257 of the Act
are decided on the basis of policies developed by the Board of Directors of the
Workers’ Compensation Board. These policies are published in the Rehabilitation
Services & Claims Manual (“RSCM”). Section 250(2) of the Act
provides that these policies are binding on WCAT decision-makers.

4.         In summary, the applicable RSCM policies provide
that, in general, workers who are injured while commuting to work are not
covered by the Act. However, that principle may or may not apply to workers who
are commuting in an employer-owned vehicle, depending on whether the employer
allows the vehicle to be used for personal purposes, in addition to being used
for work and commuting. If so, then there is no coverage. On the other hand, if
no personal use of the vehicle is allowed, the vehicle is considered to be an
extension of the employer’s premises, and coverage is triggered.

5.         At the time of the accident, the plaintiff was
commuting to work in a company truck with his friend and co-worker, Duane
Peters. Their employer had provided the company truck to Mr. Peters.

6.         As the result of the combined effect of the RSCM
policies, the application made under s.257 of the Act by the MVA defendants,
fell to be determined on the basis of whether or not the employer had permitted
Mr. Peters to make personal use of the truck, in addition to using it for
commuting and for work activities. If the employer permitted such use, then
policy #18.00 would apply, and the plaintiff would not have been barred by
s. 10(1) of the Act from proceeding with a civil claim.

7.         On the other hand, if the employer had not
permitted Mr. Peters to make personal use of the truck, policy #18.20
would apply, the plaintiff’s injuries would have been compensable under the Act,
and s. 10(1) of the Act would have precluded a civil claim arising
from the same injuries.

8.         In preparing their defence to the application, the
plaintiff’s lawyers evidently misinterpreted the applicable policy scheme in
RSCM II, and reached the erroneous conclusion that it would assist the
plaintiff to prove that Mr. Peters was not permitted to make personal
use of the truck.

9.         On August 1, 2012 counsel at the defendant firm
filed their submission to WCAT, asserting, as a matter of fact, that “Mr. Peters
was not permitted to use the Truck for personal use but was permitted to drive
it to and from work”. In support of that statement, they relied on an affidavit
of Mr. Peters which included the assertion that he had not been permitted
to make personal use of the truck. Plaintiff’s counsel had drafted the
affidavit, and had arranged for Mr. Peters to sign it.

10.       The statement in Mr. Peters’
affidavit, to the effect that he was not permitted to make personal use of the
truck, was inaccurate. In fact, he was permitted by his employer to make such
use of the truck.

[5]                   
Shortly after the WCAT Decision, the defendant law firm ceased to act,
and the plaintiff retained new counsel who continues to act for him in this
claim.

[6]                   
On January 22, 2013, the plaintiff’s current counsel made an application
to have WCAT reconsider the WCAT Decision. On July 9, 2013, the WCAT dismissed
that reconsideration application. The present action was commenced thereafter.

[7]                   
On June 12, 2014, plaintiff’s counsel delivered a draft notice of application
seeking summary judgment on whether the defendant law firm’s conduct had been
negligent. On June 24, 2012, plaintiff’s counsel delivered an expert report,
authored by Mr. Schroeder (the “First Schroeder Report”), that apparently
addressed the standard of care relevant to the defendant’s conduct and to the
circumstances of this case. Shortly thereafter, defence counsel advised the plaintiff
of various substantive concerns relating to the admissibility of the First
Schroeder Report. In November 2014, a summary-judgment application was set for
a one-day hearing on January 12, 2015.

[8]                   
The parties were unable to agree on how to proceed, particularly in
light of the objections taken to the First Schroeder Report, and they appeared
at a Case Planning Conference on December 4, 2014 before Mr. Justice G.A.
Weatherill. I am told that Justice Weatherill declined to direct the parties to
follow a particular process in advance of the summary-trial application.
Instead, he adjourned the summary-trial application and re-set it for two days
commencing on February 12, 2015.

[9]                   
The summary-trial application proceeded before Mr. Justice Wong on
February 12, 2015 who, on that same day, determined that the matter was not
suitable for disposition by way of summary trial. In succinct reasons, Wong J.
said:

[1]        THE COURT: I thank both counsel for their succinct
submissions on whether this is an appropriate procedure at this point.

[2]        I think that when one considers that this is an
allegation of professional negligence, and the principle of proportionality,
the defendants should have an opportunity to meet the allegations.

[3]        From what I have heard, I am of the view that a
summary procedure would be inappropriate.

[4]        Accordingly, to echo what the late Chief Justice
McEachern said: “Sometimes there are cases which require the Lexus treatment,”
I think this is one of them.

[5]        Accordingly, I can only make certain suggestions
here. That in the context of what took place, it might be perhaps shortened by
an agreement on a statement of facts for trial.

[6]        Also what would be important in this case,
clearly, would be cross- examination of Mr. Schroeder. And if counsel is
able to condense it for the purpose of a trial, I think it would be
expeditious. I leave that up to them.

[7]        The main issue, of course, will be the reason for
the actions of the two lawyers from the respondent firm.

[8]        Accordingly, for that reason, I would dismiss this
application for a summary trial.

[9]        The matter of costs
will follow the final result.

[10]                
The plaintiff has since had Mr. Schroeder re-work his initial
report and has had him produce a second report (the “Second Schroeder Report”).
Counsel for the defendant accepts that he has no ongoing concern with the
admissibility of the Second Schroeder Report, but maintains that he will still
require Mr. Schroeder to be produced for cross-examination on his second report.

Issue 1 – Leave to Apply for Summary Trial

[11]             
By virtue of R. 9-7(16) of the Supreme Court Civil Rules and Wong
J.’s earlier determination, it is now necessary for the plaintiff to first
obtain this Court’s leave before being able to again proceed with his summary-trial
application.

[12]             
Both counsel agree there is very little guidance on what legal
considerations or legal framework govern the application of R. 9-7(16). They
further agree, and it seems self-evident, that in order for the plaintiff’s summary
application to proceed, some material circumstance or consideration which
impeded or prevented the original application from proceeding, ought to have
been addressed or removed.

[13]             
Counsel for the plaintiff argues that, in this case, the central impediment
to the plaintiff’s summary-trial application proceeding was the potential
inadmissibility of the First Schroeder Report and the difficulties that flowed
from that issue. In aid of that submission, counsel emphasizes that the
dominant, if not only, issue raised in the written submissions of counsel for
the defendant before Wong J. were the difficulties associated with the First
Schroeder Report. Counsel argues that as that difficulty has now been addressed,
the matter is now suitable for summary disposition. He further argues that
considerations of proportionality and judicial efficiency militate in favour of
the plaintiff being granted leave to proceed with its application.

[14]             
Counsel for the defendant, in turn, argues that though the written
submission relied on before Wong J. focused on the problems associated with the
First Schroeder Report, additional issues were raised in argument before the
court and that the brief reasons of Wong J. reflect this. Still further, he
argues that though the Second Schroeder Report does not raise any issue of
admissibility, the continued need to cross-examine Mr. Schroeder raises
various procedural and scheduling problems. Finally, he argues that, depending
on what ensues from the cross-examination of Mr. Schroeder, he may have to
call one or more witnesses to explain the processes of the WCAT and the various
sources that the WCAT relies on in its determinations.

[15]             
Ultimately, I consider that these competing submissions somewhat miss
the central issue. The animating purpose and central object of summary-trial
proceedings is to provide the parties with a potential means of determining a dispute
efficiently and expeditiously. In Hryniak v. Mauldin, 2014 SCC 7, the Court
emphasized the important role that summary-judgment proceedings can play in
addressing access to justice concerns and said:

[34]      The summary judgment motion is an important tool
for enhancing access to justice because it can provide a cheaper, faster
alternative to a full trial. With the exception of Quebec, all provinces
feature a summary judgment mechanism in their respective rules of civil
procedure. Generally, summary judgment is available where there is no genuine
issue for trial.

[49]      There will be no
genuine issue requiring a trial when the judge is able to reach a fair and just
determination on the merits on a motion for summary judgment. This will be the
case when the process (1) allows the judge to make the necessary findings of
fact, (2) allows the judge to apply the law to the facts, and (3) is a
proportionate, more expeditious and less expensive means to achieve a just
result.

[16]             
Even if I were satisfied that the first two of the three criteria
referred to in para. 49 of Hryniak were satisfied the third such
requirement is not. Both counsel agree that a reasonable estimate for the plaintiff’s
intended summary-trial application would be three days. It is not clear whether
this would include the cross-examination of Mr. Schroeder, which might, I
understood, precede the application. Both counsel also agree that the liability
issues raised by the plaintiff could be addressed in a conventional trial that
required five days.

[17]             
It is manifest that a conventional trial has numerous advantages. It
would allow the judge to see the witnesses and, in particular, Mr. Schroeder.
It would also obviate the prospect of some issue surfacing that was not
canvassed adequately in the affidavit material and that might give rise to
further delay. Still further, the issue of proportionality, to the extent that
that issue engages a consideration of the amounts in dispute and the importance
of those issues, also likely militates, as Wong J. noted, in favour of a
conventional trial.

[18]             
It is also not at all clear that a conventional trial would be more
expensive in any meaningful way. Furthermore, my inquiries with the Trial Coordinator
confirm that the Registry can accommodate a three-day summary-trial application
and a five-day trial equally quickly.

[19]             
In such circumstances, I do not consider that a summary trial provides the
parties with any meaningful benefit. I do not, accordingly, consider it
appropriate to exercise my discretion to grant the plaintiff leave to bring a
further summary trial application.

Issue 2 – Severance of Liability and Damages

[20]             
The plaintiff seeks to have the issue of liability determined prior to,
and separately from, the issue of damages. This issue was not addressed in the
reasons for judgment of Wong J., as the defendant did not then apparently appreciate
that its opposition to severing questions of liability and damages was a
further and distinct basis on which it might oppose the plaintiff’s summary-trial
application.

[21]             
The concerns and constraints associated with severing and determining
some issues raised in an action separately from others have been frequently
expressed and are well-understood. The court’s jurisdiction to order the trial
of “one or more questions of fact or law … before the others” arises from R. 12-5(67).

[22]             
Such orders are discretionary; Emtwo Properties Inc. v. Cineplex
(Western Canada) Inc., 2009 BCSC 1592 at para. 12. The onus lies on
the party seeking severance to establish that that relief is appropriate; Emtwo
at para. 15.

[23]             
Applications for severance of one or more issues are informed by R. 1-3(1),
which confirms that the object of the Rules is to “secure the just,
speedy and inexpensive determination of every proceeding”; Emtwo at para. 13;
Nguyen v. Bains 2001 BCSC 1130 at paras. 9-10. They are further
informed by the object of proportionality in R. 1-3(2); Moore v. Brazauro
Resources Corporation, 2013 BCSC 341 at para. 26.

[24]             
Still further, the court’s discretion is influenced by the series of
considerations identified by Martinson J. in Nguyen:

[11]      Courts have considered the question of when some
issues should be tried before others. These are some of the points that have
been made:

a.         A judge’s discretion to sever an issue is
probably not restricted to extraordinary or exceptional cases. However, it
should not be exercised in favour of severance unless there is a real
likelihood of a significant saving in time and expense.

b.         Severance may be appropriate if the issue to be
tried first could be determinative in that its resolution could put an end to
the action for one or more parties.

c.         Severance is most appropriate when the trial is
by judge alone.

d.         Severance should generally not be ordered when
the issue to be tried is interwoven with other issues in the trial. This
concern may be addressed by having the same judge hear both parts of the trial
and ordering that the evidence in the first part applies to the second part.

e.         A party’s financial circumstances are one factor
to consider in the exercise of the discretion.

f.          Any pre-trial severance ruling will be subject
to the ultimate discretion of the trial judge.

(See BC Practice: Issue 37
(May/00) where the authors provide a useful overview of the relevant cases and
issues arising from them, and Goldman, Sachs, & Co. v. Sessions,
[1999] B.C.J. No. 1226 (S.C.))

[25]             
The precise standard that should be applied on such applications is not
entirely clear. Some cases suggest that severance should only be ordered in
“extraordinary, exceptional or compelling circumstances”; Morrison-Knudsen
Co. v. British Columbia Hydro and Power Authority (1972), 24 D.L.R. (3d)
579 at 584 (B.C.S.C.); Bidochka v. Ford Motor Company, 2000 BCSC 95 at para. 6;
Moore at para. 26; Hynes v. Westfair Foods Ltd., 2008 BCSC
637 at para. 33. Other cases suggest the relevant standard is not as high
as “extraordinary or exceptional”; Nguyen at para. 11; Enterprising
Minds Techonlogy v. Lululemon Athletica, 2006 BCSC 1168 at para. 15.
Still others retreat to, or focus on, the presence of “compelling”
circumstances; Bramwell v. Greater Vancouver Transportation Authority,
2008 BCSC 1180 at paras. 11-16. Whatever particular formulation or
standard is applied, it is clear that severance orders should only be made
infrequently and carefully and that conducting litigation “in slices” is to be
avoided in most cases.

[26]             
In this case, I am satisfied that the circumstances that favour
severance are both highly unusual, if not extraordinary, and compelling. The
liability and quantum determination in this trial will give rise to entirely
separate questions that arise from entirely different sets of circumstances.
Liability will turn on the alleged negligence of the defendant law firm in its
handling of the s. 257 Application, and on whether that negligence caused
the plaintiff’s loss. Both counsel agree that this latter issue will likely
give rise to a loss of chance, or loss-of-opportunity analysis that will then
be applied to the plaintiff’s damage claim; see e.g. Athey v. Leonati, [1996]
3 S.C.R. 458 at paras. 26-27; Graybriar Investments Ltd. v. Davis &
Company (1990), 46 B.C.L.R. (2d) 164 at 189-194 (S.C), aff’d 72 B.C.L.R.
(2d) 190 (C.A.).

[27]             
The plaintiff’s damage claim, on the other hand, will turn on the myriad
forms of lay and expert evidence that are relevant to the various heads of loss
advanced by the plaintiff.

[28]             
Thus, a dominant concern in severance applications, that being the
potential overlap of issues in the two trials, simply does not arise; Nguyen
at para. 23; Morrison at 584. There are no interwoven issues.
Instead, the issues that would be addressed in the liability and damages
aspects of the trial are compartmentalized to an unusual degree.

[29]             
In a related vein, the risk of inconsistent credibility findings will
often militate against severance; Bidochka at paras. 10-11; Hynes
at para. 36. Here, the risks associated with inconsistent credibility
findings are relatively remote. The plaintiff did not give evidence in the
s. 257 Application. Indeed, he deposes that the defendant law firm never
discussed the issues raised by the s. 257 Application with him. Thus, if
the plaintiff gave evidence at the liability trial, and I expect that absent
certain admissions he would, that evidence would nevertheless be finite and
modest.

[30]             
There is some prospect of concern with Mr. Peters, the plaintiff’s
friend and co-worker’s, credibility. He filed an affidavit in the s. 257
Application that he may now, at least in part, resile from. Be that as it may,
it is not clear to me that he would be required to give evidence at the quantum
trial, or that if he did, that his evidence would play any meaningful role in
the assessment of the plaintiff’s damages.

[31]             
The adverse financial circumstances of the plaintiff favour severance.
Apparently, though I accept that this was not in the affidavit materials, the
plaintiff has not worked since his accident almost a decade ago. I do observe
that the defendant’s materials reveal that this same assertion was made before
Wong J. It is self-evident that the costs associated with a three-week trial on
damages, the time estimate given by the defendant law firm before it was
replaced by the plaintiff’s present counsel, would be very significant.

[32]             
Finally, it seems clear that severance of the liability and damages
issues has the likely result of a significant savings of time and expense. If
the plaintiff cannot establish the defendant’s liability that would clearly bring
matters to an end. Conversely, an adverse liability finding will significantly
enhance, if not assure, the early resolution of the plaintiff’s damages claim. An
affidavit filed by a legal assistant, who works for the defendant, asserts, on
information and belief, “[t]he plaintiff’s damages claim is substantially in
dispute.” At the same time, the defendant law firm had earlier advised the
plaintiff, in writing, that it expected the damages issues to settle without a
trial. Furthermore, I reiterate that liability in this MVA Action is admitted.

[33]             
The trial estimates for the liability and damages trials, of one week
and three weeks respectively, together with the other considerations that I
have identified, speak to the appropriateness of the order the plaintiff seeks.
Accordingly, I am satisfied that the issue of liability should be tried before,
and separately from, the issue of damages.

Issue 3 – Document Production

[34]             
The defendant seeks production of two documents, dated March 22, 2013,
and April 13, 2013, respectively, over which the plaintiff has claimed litigation
privilege.

[35]             
Both counsel spent some time addressing Blank v. Canada (Minister of
Justice), 2006 S.C.C. 39, and in particular, those portions of the judgment
that deal with the circumstances in which litigation privilege that arises in
one action persists or survives in related claims; see e.g. paras. 34-41.

[36]             
The difficulties with the plaintiff’s claim of litigation privilege are
more fundamental. The onus is on the party asserting that a document is
privileged to establish that privilege; Hamalainen (Committee of) v. Sippola
(1991), 62 B.C.L.R. (2d) 254 at para. 19 (C.A.).

[37]             
Recently, in No Limits Sportswear Inc. v. 0912139 B.C. Ltd., 2015
BCCA 193, the court said:

[56]      Litigation privilege attaches to documents that are
created for the dominant purpose of litigation at a time when litigation was
ongoing or was reasonably contemplated: Gichuru v. British Columbia (Information
and Privacy Commissioner), 2014 BCCA 259 at para. 32, citing Keefer
Laundry Ltd. v. Pellerin Milnor Corp et al., 2006 BCSC 1180 at para. 96.

[57]      In Blank v. Canada (Minister of Justice),
2006 SCC 39, Fish J., writing for the majority, described litigation privilege
thusly:

[27]      Litigation privilege, on the other hand, is not
directed at, still less, restricted to, communications between solicitor and
client. It contemplates, as well, communications between a solicitor and third
parties or, in the case of an unrepresented litigant, between the litigant and
third parties. Its object is to ensure the efficacy of the adversarial process
and not to promote the solicitor-client relationship. And to achieve this
purpose, parties to litigation, represented or not, must be left to prepare their
contending positions in private, without adversarial interference and without
fear of premature disclosure.

[38]             
In Gichuru v. British Columbia (Information and Privacy Commissioner),
2014 BCCA 259, Garson J.A., for the court, said:

[32]      Madam Justice Gray then proceeded at para. 94,
and following, to usefully describe the type of information necessary to
sustain a claim of privilege. (Keefer Laundry concerns discovery of
documents in a civil suit but the principles discussed by Gray J. are equally
applicable to s. 14, the issue under consideration here.) I would adopt
her comments as follows:

[96]      Litigation Privilege must be established document
by document. To invoke the privilege, counsel must establish two facts for each
document over which the privilege is claimed:

1.         that litigation was ongoing or
was reasonably contemplated at the time the document was created; and

2.         that the dominant purpose of
creating the document was to prepare for that litigation.

(Dos Santos (Committee of) v. Sun
Life Assurance Co. of Canada (2005), 40 B.C.L.R. (4th) 245, 2005 BCCA 4 at paras. 43-44.)

[97]      The first requirement will not usually be
difficult to meet. Litigation can be said to be reasonably contemplated when a
reasonable person, with the same knowledge of the situation as one or both of
the parties, would find it unlikely that the dispute will be resolved without
it. (Hamalainen v. Sippola [(1991), 62 B.C.L.R. (2d) 254])

[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.

[39]             
In Keefer Laundry Ltd. v. Pellerin Milnor Corp., 2006 BCSC 1180,
Gray J. had continued and also said:

[100]    Milnor did not provide evidence from the creators of
the four documents over which there is a contested claim of Litigation
Privilege concerning their purpose in creating the documents. Again, I
reluctantly exercise my discretion to review the four documents, but could not
determine from the face of the documents whether they were properly the subject
of Litigation Privilege. With some, it may be that they are the subject of
Lawyers Brief Privilege, but again that was not apparent from the face of the
document.

[101]    In my view, the
preferable practice when asserting a claim of Litigation Privilege over a
document is to provide an affidavit from the creator sitting out in the creator’s
own words the circumstances and purpose of the creation of the document. If it
involved preparing for contemplated litigation, the court can assess of the
reasonableness of the anticipation of litigation on the basis of all the
evidence of the circumstances at the time.

[40]             
In the present case, the plaintiff failed to address, or to satisfy,
most of these various requirements. Identification of the parties to the correspondence
and the dates on which the two documents were authored may be consistent with
the documents having been prepared when litigation was either ongoing or was
reasonably contemplated.

[41]             
There is, however, nothing in either the circumstances or the records
before me, or from counsel for the plaintiff, that establishes what the
dominant purpose for the creation of the documents in question was. Nor was I
provided with these documents so that I might review them. Though less
desirable, such an examination will sometimes make clear the dominant object for
the creation of a document.

[42]             
In all the circumstances, the plaintiff has failed to satisfy the onus
of establishing that the two documents were prepared for the dominant purpose
of anticipated litigation. Accordingly, the documents are to be produced to counsel
for the defendant.

[43]             
I consider that the success of the parties on these various applications
was divided. Each party is, therefore, to bear their own costs.

“Voith
J.”