IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120313

Docket: M081915

Registry:
Vancouver

Between:

Aaron Jeffrey
Cliff

Plaintiff

And

Maureen Evelyn
Dahl, Aggressive Auto Towing Ltd.,
Terry Snelgrove, Trevor Evan Ivor Jones, Peter Alan Weaver
and Brett Unger

Defendants

And

Trevor Evan Ivor
Jones, Peter Alan Weaver
and Brett Unger

Third
Parties

Before:
The Honourable Madam Justice Bruce

Reasons for Judgment

INTRODUCTION

[1]            
This is an application by the defendants and third parties, Mr. Weaver
and Mr. Jones, for production of statements they provided to an investigator
employed by Mr. Cliff, including any drafts of the statement, the audio
recording of the statement given during an interview, and any transcript of the
audio taped interview. The remaining defendants and third parties consent to
the order sought. Mr. Cliff opposes the order sought on the ground that the
statements are protected by litigation privilege.

[2]            
Mr. Weaver also seeks compliance with an order for production of certain
documents in the possession of Mr. Cliff that I issued at a Case Management
Conference on February 11, 2011. On the morning of this application, Mr.
Cliff’s counsel provided a disk to Mr. Weaver’s counsel that purported to
include unredacted copies of the Insurance Corporation of British Columbia’s (“ICBC”)
coordinator reports and Mr. Cliff’s rehabilitation file obtained pursuant to a
Freedom of Information Act request. Mr. Cliff does not oppose Mr. Weaver’s
application on its merits, but maintains it is academic because these documents
have now been produced. Although Mr. Weaver has not yet examined the disk, it
was suggested that this portion of his application be adjourned to permit a
review of the disk. I find this is an appropriate course of action. Thus this
portion of Mr. Weaver’s application is adjourned pending an examination of the
disk. Any issue of costs will be addressed by the trial judge.

BACKGROUND

[3]            
This action involves a motor vehicle accident that occurred on January
21, 2007, when Ms. Dahl’s vehicle struck Mr. Cliff, who at the time was a
pedestrian. Mr. Cliff was standing in the northbound lane of Bradner Road in
Abbottsford, B.C. when he was struck by Ms. Dahl’s vehicle. Mr. Cliff was
assisting Mr. Snelgrove, a tow truck driver, to load two disabled off-road vehicles
onto a tow truck. Aggressive Auto Towing Ltd. is a defendant because of an
allegation that, as Mr. Snelgrove’s employer, the company is vicariously liable
for his negligent acts in the course of employment.

[4]            
The third parties, Mr. Weaver, Mr. Unger, and Mr. Jones were present at
the scene of the accident and were the owners or operators of the disabled
vehicles. Ms. Dahl maintains the third parties caused or contributed to the
accident by their negligence. The third party notice against Mr. Weaver and Mr.
Jones was filed on June 1, 2010. On November 26, 2010, Ms. Dahl filed the third
party notice against Mr. Unger. This notice was filed late due to a
misunderstanding as to who, among the three third parties, owned the disabled
vehicles.

[5]            
Mr. Cliff subsequently applied to sever the third parties from the
primary action and, alternatively, to add the third parties as defendants to
ensure that he could claim damages against them in the event they were found to
have caused or contributed to the accident. On February 11, 2011, I granted Mr.
Cliff’s application to add the third parties as defendants in the action. This
matter is now set for trial commencing October 1, 2012, for a period of 25
days.

[6]            
In March 2007, Mr. Weaver was interviewed by an investigator hired by
Mr. Cliff’s counsel; he provided the investigator with an audio recorded
statement with respect to his recollection of the accident. In addition to the
recording of the interview, Mr. Weaver provided the investigator with a signed
statement of his account of the accident. He was not provided with a copy of
the statement or the recording. Similarly, Mr. Jones and Mr. Unger were
interviewed by the investigator in March and February 2007, respectively, and
provided her with signed statements. Their interviews were also audio-recorded.
Neither Mr. Jones nor Mr. Unger was given copies of their statements.

[7]            
Commencing in February 2007, Ms. McAuley, an investigator hired by ICBC,
attempted to contact Mr. Weaver, Mr. Unger and Mr. Jones to obtain statements
from them regarding the accident. At this time all three individuals were only
witnesses to the accident. Ms. McAuley made several attempts to secure
statements from these witnesses, but they refused to comply with her request.
Although all three witnesses agreed to provide Ms. McAuley with a copy of the
statement they had provided to Mr. Cliff’s investigator, only Mr. Weaver
provided her with an authorization to release the document. Ms. McAuley made
several attempts to obtain Mr. Weaver’s statement from Mr. Cliff’s counsel;
however, she received no response to her communications. Subsequent
correspondence with the three witnesses concerning an interview was not
answered.

[8]            
Mr. Weaver deposed that he met with counsel for Mr. Cliff in the spring
of 2008 for an interview; however, he does not recall the questions or his
answers. He recalled that Mr. Cliff spoke to him sometime well after the
accident and advised him not to speak to ICBC without first contacting Mr.
Cliff’s counsel. Mr. Weaver deposed that his memory of the events was much
better in the spring of 2007 than it is at present due to lapse of time.

[9]            
Mr. Jones deposed that he was interviewed by counsel for Mr. Cliff in
the spring or summer of 2007. He does not have a clear recollection of the
questions asked or his responses. Mr. Jones deposed that Mr. Cliff advised him
not to speak with ICBC representatives without first contacting his counsel
sometime in 2007 or 2008. Mr. Jones also deposed that his memory of the
accident was much better when he gave a statement to Mr. Cliff’s investigator
due to the passage of time since that interview.

[10]        
On October 23, 2009, prior to Mr. Weaver, Mr. Unger and Mr. Jones being
joined as third parties, Ms. Dahl brought an application for production of the
statements they provided to Mr. Cliff’s investigator. Master Baker dismissed
Ms. Dahl’s application on the ground that the documents were covered by
litigation privilege; that is, the dominant purpose for their creation was in
aid of the conduct of litigation and to obtain legal advice: Cliff v. Dahl,
2009 BCSC 1947 (“Cliff v. Dahl, 2009”). Ms. Dahl appealed this decision
and the appeal was dismissed: Cliff v. Dahl, 2010 BCSC 1998.

[11]        
Once Mr. Weaver, Mr. Unger and Mr. Jones were added as third parties,
they provided statements to Ms. McAuley. This occurred between September and
December 2010.

[12]        
Counsel for Mr. Cliff deposed that on numerous occasions he invited Mr.
Weaver, Mr. Jones and Mr. Unger to bring an application for summary dismissal.
He also advised these defendants that Mr. Cliff would support their application
for summary dismissal.

ARGUMENT

[13]        
Mr. Weaver argues that his change in status from a witness to a party
adverse in interest gives rise to a right to production of the statement he
provided to Mr. Cliff’s investigator. While a witness statement may be
privileged if the dominant purpose for its creation is to assist in the conduct
of litigation, where the witness becomes a party to the action adverse in
interest to the party taking the statement, it is no longer privileged: Flack
v. Pacific Press Ltd. et al, [1970] B.C.J. No. 631, 14 D.L.R. (3d) 334
(C.A.); Ridout Wines Ltd. v. Barratt (1983), 44 B.C.L.R. 142 (C.A.); Bell
et al v. Board of School Trustees of School District No. 7 (Courtney) (7
May 1987), Vancouver C825989 (S.C.); Strass v. Goldsack et al., [1975] A.J.
No 497, 58 D.L.R. (3d) 397 (Alta. S.C.); Peters v. Toews
(1993), 86 Man.R. (2d) 232 (Q.B.); and Wasilkowsky v. Borysowich, [1972]
2 O.R. 621 (Ont. H.C.J.).

[14]        
Mr. Weaver argues it is irrelevant that he was not a party at the time
of the statement. The privileged status of documents can change in the course
of litigation just as the parties to the action change: Bajpai v. Hunter,
[1990] B.C.J. No. 1185 (S.C.); and Western Canadian Place Ltd. v.
Con-Force Products Ltd. (1997), 50 Alta. L.R. (3d) 131 (Q.B.).

[15]        
Further, Mr. Weaver maintains the issues raised by his application are
not res judicata due to Cliff v. Dahl, 2009. In that case, Master
Baker addressed the status of a witness statement rather than a statement made
by a party who is adverse in interest.

[16]        
Lastly, Mr. Weaver argues that even if his statement continues to be
governed by litigation privilege, it should be produced out of fairness.
Despite significant efforts on the part of ICBC, the evidence contained in the
statement is not otherwise available: Steeves (Guardian ad litem of) v.
Rapanos (1982), 140 D.L.R. (3d) 121 (B.C.S.C.); Vukovic v. Madill
(1995), 9 B.C.L.R. (3d) 78 (S.C.); and Patelidis v. Black Top Cabs Ltd.,
[1998] B.C.J. No. 3154 (S.C.). Mr. Weaver argues that the statement
represents the best evidence of what occurred and his memory has faded over the
five years since the accident. Further, had Mr. Cliff not discouraged Mr.
Weaver from giving a statement to ICBC, the evidence would have been available
from another source.

[17]        
Mr. Jones adopts the argument made by Mr. Weaver and cites two
additional authorities that support his position that a party adverse in
interest is entitled to his own statement even if it has become part of Mr.
Cliff’s solicitor’s brief: Berghuis v. Future Shop Ltd., 2000 BCSC 1398;
and Hanna v. Maritime Life Assurance Co. (1994), 137 N.S.R. (2d) 339 (S.C.).

[18]        
Mr. Cliff opposes the production of the statements on the basis that it
is covered by litigation privilege. He argues this finding is res judicata:
Cliff v. Dahl, 2009; upheld on appeal: 2010 BCSC 1998. He also argues
that the issue of fairness in disclosing the statement was dealt with and
dismissed in Ms. Dahl’s application.

[19]        
Mr. Cliff argues that the authorities cited by Mr. Weaver and Mr. Jones
solely address the matter of solicitor-client privilege. They do not consider
litigation privilege which protects the process of litigation rather than the
relationship between lawyer and client: See Robert J. Sharpe, “Claiming
Privilege in the Discovery Process” in Law in Transition: Evidence, Law
Society of Upper Canada Special Lectures (Toronto: De Boo, 1984) 163.
Because these privileges are governed by different policy considerations,
authorities dealing with solicitor-client privilege cannot assist the
applicants. More recent cases have limited the ratio in Flack to
solicitor-client privilege situations: Henderson v. Lodge (1993), 16 C.P.C.
(3d) 276 (B.C.S.C.).

[20]        
Mr. Cliff argues that production of the statements would deprive his
counsel of privacy in preparing for litigation. Once Mr. Weaver and Mr. Jones
have their statements, the privilege is lost and they will be obliged to
produce them to Ms. Dahl. As a consequence, Ms. Dahl would have obtained
indirectly what she could not obtain directly through her own application for
production. This result creates additional unfairness to Mr. Cliff because it
is apparent that Ms. Dahl has no case against the applicants in negligence. These
parties will ultimately be released from liability in a summary trial
proceeding.

DECISION

[21]        
There are two issues to address: (1) Is the subject matter of this
application res judicata? (2) Should Mr. Cliff be ordered to
produce the statements of Mr. Weaver and Mr. Jones because these applicants are
now parties to the action?

[22]        
Turning to the first question, in Cliff v. Dahl, 2009, Master
Baker dismissed Ms. Dahl’s application for production of the statements
provided by Mr. Weaver, Mr. Unger and Mr. Jones to the investigator hired by
Mr. Cliff because they were privileged. Master Baker concluded that the
dominant purpose for the creation of these statements was in aid of litigation
and that litigation was a reasonable prospect at the time the statements were
taken. Master Baker’s decision was upheld on appeal: 2010 BCSC 1998.

[23]        
While I agree the question of whether the statements of Mr. Weaver and
Mr. Jones were governed by litigation privilege at the time they were created
is res judicata, I am satisfied there is a material difference between
production of statements made by a witness and production of statements made by
a party who is adverse in interest. These two types of applications raise
distinct issues. As illustrated by the authorities cited by Mr. Weaver and Mr.
Jones, there are different legal principles involved in a determination of
whether a party’s statement, as opposed to a witness statement, ought to be
produced by the opposing party. In addition, Master Baker, and latterly Smith
J. on appeal, addressed an application by Ms. Dahl for production of statements
made by Mr. Weaver, Mr. Jones and Mr. Unger rather than for production of her
own statement. These two key distinguishing factors preclude a conclusion that
Mr. Weaver and Mr. Jones’ application for production of their statements is
res judicata.

[24]        
Addressing the second question, it is clear that since the decision of
our Court of Appeal in Flack, a statement made by one party to an agent
of another party, who is adverse in interest, is not privileged and must be
produced upon demand to the maker of the statement. It is irrelevant that the
statement was made either before litigation had commenced or at a time when the
person was a witness rather than a party to the action. Privilege over a document
may be lost by a change in status from witness to party adverse in interest.
This is precisely what occurred in Flack and as noted by Master Grist
(as he then was) in Bajpai. Thus where a witness is subsequently joined
as a party, a statement made by that witness to a party now adverse in interest
is no longer privileged.

[25]        
Mr. Cliff argues that the authorities, commencing with Flack, are
distinguishable because the underlying rationale for the production of the
statements is that they are not covered by solicitor-client privilege. In this
case, argues Mr. Cliff, the statements are governed by litigation privilege,
which is much broader and does not hinge on a finding that the communications
originated in confidence. Mr. Cliff points to the fact that the cases cited by
the applicants do not address the leading authority on litigation privilege: Hamalainen
(Committee of) v. Sippola (1991), 9 B.C.A.C. 254.

[26]        
In my view, the principles articulated in Flack should not be
interpreted narrowly, as argued by Mr. Cliff. The underlying rationale for
ordering production of statements by adverse parties is the same regardless of
whether it is based upon the Wigmore factors or principles of fairness. Many of
the authorities cited by the applicants address both the lack of
confidentiality of statements made by parties to a party adverse in interest
and the concept of fairness inherent in a party knowing the case to be met and
preventing trial by ambush.

[27]        
In Flack, the defendant’s insurer obtained a statement from the
injured party in a motor vehicle accident before this party had commenced an
action against the defendant. It was agreed that the statement was obtained for
use in litigation pending or anticipated and for the purpose of instructing the
defendant’s counsel. After the writ was filed, the plaintiff sought production
of this statement. Robertson J.A., in concurring reasons, addressed solicitor-client
privilege in terms of confidential communications between the client and his
solicitor as well as the privilege that applies to documents gathered or
created by the solicitor in order to advise the client: Flack at para. 13.
Robertson J.A. elaborates upon the basis for concluding the statement of a
party adverse in interest is not privileged at para. 27 of Flack:

In my opinion the document does
not fall within the principle upon which privilege rests. It can be no
discouragement of laymen consulting lawyers that a party is allowed to see a
document which he himself supplied to an opposite party. The information having
originated with the one party, there is no secrecy to guard. The document was
not a communication between the defendants and their solicitor. The matter does
not fall within these words in the passage I have quoted from Anderson v.
Bank of British Columbia [(1876), 2 Ch.D. 644]: "The solicitor
requires further information, and says, I will obtain it from a third person.
That is confidential.", for the plaintiff is not "a third
person" in the sense in which the phrase is used there. In the passage I
have quoted from Southwark & Vauxhall Water Co. v. Quick [(1878), 3
Q.B.D. 315 (C.A.)] these words appear: "… no one shall be entitled to
call for the production of a document which has been submitted to the solicitor
for the purpose of obtaining his advice"; they do not apply here, for the
plaintiff did not submit the document to the defendants’ solicitor for the
purpose of her obtaining his advice; rather she gave the document to the
adjuster so that the insurers and the defendants might submit it to their solicitor
in order that he might advise them. The document does not fall within
these words that I have quoted from Lord Blackburn in Lyell v. Kennedy [(1883),
9 App. Cas. 81]: "… the other side is not entitled, on discovery, to
require the opponent to produce as a document those papers which the solicitor
or attorney has prepared in the course of the case, and has sent to his
client". When the document was handed by the plaintiff to the adjuster
there can have been on her part no "intention of confidentiality".

[28]        
Nemetz J.A., for the majority, based his decision on the lack of
confidentiality as between the plaintiff providing the statement and the
defendant’s legal advisors. The common sense perspective he applied to the
application for production is equally applicable to documents claimed to be
governed by litigation privilege. In this regard, Nemetz J.A. says at para. 80
of Flack:

It would be strange, indeed, if
the rule governing privileged documents was so extended as to allow the
obtaining of signed statements by one litigant from another, which could be
withheld until trial when the maker could then be cross-examined upon a
document, a copy of which he had neglected to retain. … I further conclude
that [the trial judge] should have exercised his discretion in favour of the
plaintiff since it would not, in my view, be "fit" or
"right" (to use the words of O. 31) to allow the defendants to
withhold the production of a statement made and signed by the plaintiff which
could not possibly interfere with the confidential relationship between the
defendants and their legal advisers.

[29]        
In my view, not only are the essential facts in Flack identical
to the case at hand, but the underlying rationale for the decision is also
equally applicable to this application. Mr. Weaver and Mr. Jones are no longer
witnesses without a stake in the pending litigation. Ms. Dahl claims their
negligence caused or contributed to the accident. Mr. Cliff has joined them as
defendants to the action to enable him to claim damages against them if they
are found liable in negligence. While it may be that the case against Mr. Jones
and Mr. Weaver is weak, at present their interests are directly affected by the
litigation. To properly defend themselves against the claims of either Mr.
Cliff or Ms. Dahl the applicants must know the case against them. They should
not be at risk of an ambush by the claimant in cross-examination or be held to
have admitted certain facts harmful to their defence: per Robertson J.A. at
para. 26 of Flack.

[30]        
The authorities cited by the applicants that followed Flack have
applied its ratio to situations where the privilege claimed is litigation
privilege rather than privilege related to confidential solicitor-client
communications. In Ridout Wines Ltd., the Court of Appeal upheld a
production order with respect to a statement taken by the defendant’s solicitor
from a manager employed by the plaintiff. No claim of confidentiality as
between solicitor and client could be made in the circumstances. Anderson J.A.
agreed with the ruling in chambers that in addition to any confidentiality, it
would not be “fit” to withhold the statement until trial. This conclusion stems
from Strass where McDonald J.A., in concurring reasons, expressly
addresses the solicitor’s brief privilege and concludes that this privilege
cannot preclude production of a statement taken from a party adverse in
interest: Strass at paras. 94-103.

[31]        
In Peters, Morse J. came to a similar conclusion in regard to the
production of a record of a conversation between the plaintiff and an
investigator hired by the defendant. In this judgment, Morse J. expressly
refers to “dominant purpose” and litigation privilege as not precluding
production of the transcript of the conversation. He states at para. 8:

Plaintiff’s counsel referred to
authority — authority which, in my view, should be followed — that statements
made by a party adverse in interest to a representative of the defendant are
not privileged even though, as in the present case, the dominant purpose for
which the statement is obtained is for anticipated litigation and for the
advice of solicitors — see Flack v. Pacific Press (1970), 74 W.W.R. 275
(B.C.C.A.), Wasilkowsky v. Borysowich, [1972] 2 O.R. 621 (Ont. H.C.J.), Strass
v. Goldsak, [1975] 6 W.W.R. 155 (Alta. C.A.), 85th Avenue Development
Co. Ltd. v. Northern Union Insurance Company Limited et (1986), 44 Alta. LR
(2d) 142 and GEAC Canada Ltd. v. Prologic Computer Corp. (1989), 26
C.P.R. (3d) 86 (B.C.S.C.).

[32]        
More recently, the Nova Scotia Supreme Court, in Hanna, concluded
that the fact a statement given by an adverse party found its way into the
“solicitor’s brief” and was obtained in anticipation of litigation could not
preclude production of the statement because to do otherwise would create unfairness.
As found by MacAdam J. at para. 47 of Hanna:

Fairness requires that a person
be able to obtain a copy of their own statement, particularly where they would
have had every right to demand a copy as a condition of making the statement in
the first place. As noted by Moir, J.A. [in Strass], "a trial is
not a sporting event" and "the result of litigation ought not to
depend upon ignorance or accident". Although not necessarily limited to
parties, this is particularly true when the person, although not a party at the
time, or even contemplated to be a party, is later sued and joined in the
proceeding.

[33]        
Lastly, in Berghuis, Drost J. addressed an application by the
plaintiff in a wrongful dismissal action for production of documents, including
notes of the employer’s questions to him and his responses. Drost J. concluded
that all of the documents, including the plaintiff’s statement, were prepared
for the dominant purpose of obtaining legal advice or aiding in the conduct of
anticipated litigation. The application was dismissed on this ground except for
the plaintiff’s statement. In this regard, Drost J. held that the principles in
Flack governed the application and ordered the documents be produced.
His conclusion is found at para. 36 of Berghuis:

The three possible exceptions
relate to documents P10, P19 and P20, the hand-written and typed notes made by
Ms. Stuart with respect to her meetings with the plaintiff.  While I accept
that the notes were prepared for the purpose of obtaining legal advice or aiding
in the conduct of anticipated litigation, I have concluded that the
confidential relationship between the defendant and its legal advisors will not
be violated by an order requiring it to extract and produce any portions of
those notes that record questions or allegations put to the plaintiff, and his
responses.  Notes of that nature are, in my opinion, the equivalent of
statements made by the plaintiff and should therefore be produced to him: Flack
v. Pacific Press Ltd. et al., [1970] 14 D.L.R. (3d) 334 (B.C.C.A.). Apart
from any such portions, Ms. Stuart’s typed and hand-written notes are
privileged.

[34]        
Mr. Cliff cites Henderson as an authority for the proposition
that Flack must be confined to cases where only solicitor-client privilege
is at stake. However, in Henderson, Master Bolton does not provide a
reasoned analysis for distinguishing Flack on this ground. I find this
is largely because it is apparent that the ratio in Flack could not
apply on the facts of the case before him. In Henderson, the plaintiff
sought production of the notes taken by an expert during an independent medical
examination commissioned by the defendant. The expert report and the underlying
notes could only be compellable if the defendant chose to make the report part
of its case.

[35]        
Based on these authorities, I am satisfied that Mr. Weaver and Mr. Jones
are entitled to a copy of the statement they provided to Mr. Cliff’s
investigator. While their statements as witnesses would not be compellable due
to litigation privilege, the change in their status to parties adverse in
interest to Mr. Cliff place them on a different footing. Disclosure of these
statements is necessary to ensure fairness in the litigation process, to enable
these parties to properly defend themselves against allegations of negligence,
and to support the truth seeking function of the court. Production of these
statements is neither counter-productive to the adversary process nor to the
confidential relationship between solicitor and client.

[36]        
The facts here present a particularly compelling case for production of
the statements. The applicants permitted Mr. Cliff’s investigator to take their
statements at a time when they were not represented. They were not offered
copies of their statements nor advised to seek legal advice about this matter.
In addition, Mr. Cliff interfered with the insurer’s investigation of the claim
by counselling the applicants not to give a statement unless they first
contacted his lawyer. By taking these steps Mr. Cliff’s actions may have
prevented a timely statement from the applicants that could have formed a
substitute for the statements taken by his investigator. Now that five years
have elapsed since the date of the accident, it is apparent that the
applicants’ memory of the events has faded. While there is nothing improper
about Mr. Cliff’s conduct, it has imbued the applicants’ case with more of a
sense of urgency and necessity. There is simply no other means by which the
applicants could refresh their memories of the events surrounding the accident.

[37]        
For these reasons I order production of the signed statements of Mr.
Weaver and Mr. Jones in possession of Mr. Cliff’s counsel and the audio recording
of the statement. It is not appropriate that I order production of the
transcript of the audio recording. This is an aid to follow along with the
audio recording and commissioned by Mr. Cliff’s counsel. There is no principle
of law that would require Mr. Cliff to share this work product with the
applicants. They are free to commission their own transcripts of the audio recording.
The applicants have not sought copies of the notes taken by Mr. Cliff’s counsel
during his interviews with them. I do not regard these as statements made by
the applicants; they are notes to refresh counsel’s recollection of the
interview and nothing more. Accordingly, these notes should not be made the
subject of a production order.

[38]        
Mr. Cliff shall produce the audio recordings and signed statements to
the applicants within 14 days of this order and upon payment of the reasonable
costs for production of copies thereof.

[39]        
Finally, the applicants are entitled to their costs for this application
at Scale B in any event of the cause.

“Bruce
J.”