IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20150429

Docket: M132735

Registry:
Vancouver

Between:

Dinesh Dholliwar

Plaintiff

And

Ding Chang Yu,
Sandra Yan, Yongyi Ou

Defendants

Before: Master Scarth

Reasons for Judgment

INTRODUCTION

[1]            
The plaintiff was involved in three motor vehicle accidents between June
2 and August 16, 2011. He has settled his claims arising from the first two
accidents. The third accident is the subject of this action in which the plaintiff
claims damages for personal injury, including past and future wage loss and
loss of earning capacity and opportunity to earn income. The defendants apply
for production of settlement documentation relating to the claims from the June
and July 2011 accidents. The defendants requested these documents at the
plaintiff’s examination for discovery. The plaintiff relies on the privilege
attached to settlement documents. The defendants submit that privilege should
be set aside to prevent double recovery by the plaintiff.

BACKGROUND FACTS

[2]            
This action arises out of a motor vehicle accident that occurred on
August 16, 2011. In the notice of civil claim, the plaintiff claims damages for
injuries to his jaw, neck, shoulders and back.  The plaintiff alleges that
these injuries have cause chronic pain and suffering, and headaches.

[3]            
The plaintiff was also involved in two previous accidents, on June 2,
2011 and July 25, 2011. The plaintiff has been examined for discovery in this
action and has given evidence that he suffered injuries to his head, neck and
back in the first and third accidents, and headaches and back pain in the
second and third accidents. These injuries are also set out in the plaintiff’s
treating general practitioner’s report dated July 23, 2012.

[4]            
At the examination for discovery of the plaintiff, the defendants
requested that “if there has been a settlement [of the plaintiff’s claims
arising from the earlier accidents], that the settlement documentation
including the releases and the amounts of those settlements” be produced. There
is no dispute that those claims have been settled but the plaintiff has
declined to produce the documents requested or to advise the defendants of the
settlement amounts.

POSITION OF THE DEFENDANTS

[5]            
This application is brought pursuant to Rule 7-2(18) of the Supreme
Court Civil Rules, relying on the request made at the discovery.

[6]            
The defendants acknowledge that the documentation they seek is protected
by settlement privilege. However, they submit that this privilege is not
absolute and is subject to exceptions, one of which is where disclosure of the
settlement documentation would prevent double recovery: Pete v. Lanouette,
2002 BCSC 75.

[7]            
The defendants submit that based on the plaintiff’s evidence at discovery
and the medical evidence, the injuries suffered by the plaintiff in the three
accidents are indivisible. They rely on Ashcroft v. Dhaliwal, 2008 BCCA
352 for the principle that where multiple independent torts lead to indivisible
injuries, the tort-feasors are jointly and severally liable to the plaintiff,
and that, in such cases, damages are assessed globally, and the proceeds of
settlement of any of the individual torts are deducted from the final award at
trial.

[8]            
It is the submission of the defendants that the joint and several
liability faced by the three tort-feasors here raises the possibility that the
plaintiff may be overcompensated for his injuries if the settlement amounts are
not known. The defendants submit that while this process of deduction takes
place following the trial judgment, it is also necessary for purposes of
settlement discussions. The parties are contemplating mediation. The defendants
say that given that the injuries are indivisible, the chance of settlement is
slim if the settlement amounts are not known. They submit that “to apply the
settlement privilege in this case would thwart its very purpose” as it would
not foster settlement but rather prevent it.

POSITION OF THE PLAINTIFF

[9]            
The plaintiff submits that the settlement documentation does not address
material facts and is therefore not required to be disclosed under Rule 7-1(1).
Further the plaintiff submits that the documentation sought by the defendants
is protected by settlement privilege and that no overriding principle arises in
this case requiring an exception to be made. It is the plaintiff’s submission
that whether these injuries are indivisible, which the plaintiff disputes, is a
determination for the trier of fact in this action, and that no finding can be
made on this application. As a result, the question of over-compensation must
await the findings at trial: Anderson v. Cara Operations Limited (Montana’s
Cookhouse), 2009 CanLII 58608 (O.N.S.C.). In concluding that settlement
documents relating to a 2001 accident need not be disclosed in an action
related to a 2005 accident, the Court in Anderson stated:

[18]      The trial judge in the
case at bar, will determine if there are overlapping and ongoing injuries from
the first accident to the second. That will be decided based on the evidence,
including the medical reports and A.B. file from the first accident. It will
not be determined based on the settlement number agreed to in the first
accident.

DISCUSSION AND DECISION

[10]        
The cases set out the following principles which are applicable to this
application:

a.              
The public interest in the settlement of disputes generally requires
“without prejudice” documents or communications created for, or communicated in
the course of, settlement negotiations to be privileged: Middelkamp v.
Fraser Valley Real Estate Board (1992), 71 B.C.L.R. (2d) 276 (C.A.).

b.              
A final settlement agreement is covered under the Middelkamp blanket
protection for settlement communications: B.C. Children’s Hospital v. Air
Products Canada Ltd., 2003 BCCA 177, confirming a general policy of
non-production of all documentation relating to settlement negotiations.

c.              
To establish an exception to settlement privilege, the applicant must
show that a competing public interest outweighs the public interest in
encouraging settlement. An exception should only be found where the documents
sought are both relevant, and necessary in the circumstances of the case to
achieve either the agreement of the parties to the settlement, or another
compelling or overriding interest of justice. Relevance alone is not sufficient
to override the settlement privilege. See Middelkamp; Dos Santos v. Sun Life
Assurance Co. of Canada, 2005 BCCA 4, para. 21.

d.              
An exception to settlement privilege may be necessary to prevent
injustice through excessive compensation to the plaintiff: Dos Santos,
para. 29, citing Pete.

[11]        
Applying the principles set out above, the issues on this application
are firstly, whether the requested documents and information are relevant, and
secondly, if they are relevant, it having been conceded that the documents are
protected by settlement privilege, whether the defendants have established
that, in the circumstances, an exception to that privilege is necessary.

             
(i)                   
Are the settlement documents relevant?

[12]        
The plaintiff claims for injuries arising from the third accident in a
series. Evidence from his examination for discovery suggests that there are
overlapping injuries as between the accidents. In their response to civil claim,
the defendants set out their allegation with respect to the involvement of
other tort-feasors, alleging that:

2.         Any alleged injury,
loss, damage, expense or health care service paid by the Government of British
Columbia was not caused by the Collision but is attributable to previous and/or
subsequent accidents, injuries or conditions involving or affecting the
Plaintiff or congenital defects and/or pre-existing injuries or conditions

[13]        
The defendants take the position that the plaintiff’s injuries are
indivisible, i.e. they cannot be separated or have liability attributed to the
constituent cause: Bradley v. Groves, 2010 BCCA 361.

[14]        
I accept the submission of the defendants that the settlements arrived
at in relation to the first two accidents are relevant to a material fact, i.e.
the plaintiff’s damages arising from the third accident in circumstances where the
injuries claimed to arise from the various accidents overlap. To paraphrase the
Court in Bradley, at para. 37, while it may be that in some cases,
earlier injury and later injury to the same region of the body are divisible,
and while it will be for the trial judge to decide in the circumstances of each
case, it is difficult to see how the worsening of a single injury could be
divided up, particularly where the accidents from which the injury is alleged
to arise occurred in the space of three months.

[15]        
In my view, this case is distinguishable from Hughes v. Roodenburg, 2006
BCSC 282, in which Master McCallum held that there was no possible overlap
between the settled claim and the case before him.

[16]        
I conclude that the settlements are relevant to the plaintiff’s claims
in this action, applying the test of relevance in Rule 7-1(1).

           
(ii)                   
Is it necessary that the settlement documents be produced?

[17]        
In Ashcroft, the trial judge was aware that the claims against
the parties involved in the second accident had settled with the plaintiff: Ashcroft
v. Dhaliwal, 2007 BCSC 533. Shaw J. stated the issues to be:

[5]        …whether the present
defendants are liable for Mrs. Ashcroft’s cumulative injuries, including
those received in the second accident. If so, then a subsidiary issue arises:
what should be done in regard to the money Mrs. Ashcroft has been paid in
settlement of the second accident. Should it be deducted from the damages
assessed in the present proceeding?

[18]        
Shaw J. concluded that the present defendants were liable for the
plaintiff’s cumulative injuries, those injuries being indivisible. He went on
to state:

[48]      My ruling on the law raises the question of double
recovery because Mrs. Ashcroft has already received a settlement for the
second accident. Here, in my opinion, the common law rule against double
recovery comes into play.

[49]      The principle against double recovery is stated in Ratych
v. Bloomer, [1990] S.C.R. 940, 69 D.L.R. (4th) 25 per McLachlin J. (as
she then was) at 962:

It is a fundamental principle of
tort law that an injured person should be compensated for the full amount of
the loss, but no more…The plaintiff is to be given damages for the full measure
of his loss as best that can be calculated. But he is not entitled to turn an
injury into a windfall.

[19]        
Accordingly, Shaw J. held that, to avoid double recovery, there must be
a deduction from the full measure of damages of any extra benefit received by Ms. Ashcroft,
and judgment given for the net amount only.

[20]        
The Court of Appeal upheld the process followed by Shaw J. in
deducting the settlement amounts from the damages against the defendants.

[21]        
In light of Ashcroft, there is no doubt that information on the
settlements will have to be produced if and when the trial judge concludes that
the injuries are indivisible, as the trial judge will then be asked to
determine the amount for which these defendants are liable. The question
remains as to whether it is necessary that they be produced now, in advance of
such a finding.

[22]        
In Dos Santos, the Court of Appeal cited the decision in Pete as
an example of when a competing public interest –
that of preventing injustice in the form of excessive compensation to the
plaintiff – displaces the
blanket privilege set out in Middelkamp: see Dos Santos,
paras. 27 and 29. In Pete, the plaintiff was involved in two motor
vehicle accidents, the first in 1994 and the second in 1998. The defendants in
the action related to the second accident requested copies of the settlement
documents related to the action on the first accident, including a release or
an agreement. The plaintiff took the position that the documents were not
relevant and, in any event, were privileged. Master Bishop ordered that the
documents be produced, finding that they were relevant applying the Peruvian
Guano test (Compagnie Financiere du Pacifique v. Peruvian Guano Co.
(1882), 11 Q.B.D. 55 (C.A.)), and that there was a,

…real possibility that without
the disclosure of the settlement documents and the information requested, the
plaintiff could be compensated again for injuries for which she has already
received compensation” (para. 30) [cited in Dos Santos, at
para. 29]

[23]        
The decision in Pete was followed in Murray v. Hough &
Smith, 2002 BCSC 339 where, by way of interrogatories, the defendants asked
for details of a settlement reached in another action. Master Horn stated:

[17]      In this case too, it
seems to me, the terms of the settlement may show whether or not the plaintiff
has been compensated for injury or loss which is also encompassed by the
remaining actions. The plaintiff says that the injuries she suffered in the
nightclub are quite different from the injuries she suffered in the motor
vehicle collisions and that there was no amount paid to her for the loss of
income. That may be so, but the defendants are entitled to investigate whether
it is so.

[24]        
On the issue of settlement privilege, Master Horn considered himself
bound by the Pete decision, but, applying Middelkamp, only to the
extent that it holds that the terms of the settlement must be disclosed in
order to prevent double recovery.

[25]        
The plaintiff relies on the Ontario decision of Anderson in which
the Court declined to follow Pete. In essence, the Court in Anderson dismissed
any possibility of overcompensation, upon which the disclosure ordered in Pete
was founded, on the basis that the defendants would only be responsible for
the damages they caused: para. 22. This appears to be based on an
assumption that the injuries were divisible, or on the method of assessing
damages set out in Long v. Thiessen, 1968 CarswellBC 139, 65 W.W.R. 577
(B.C.C.A.).

[26]        
It has yet to be established here that the injuries arising from the
third accident are indivisible from those in the first and second. However, on
the basis that indivisibility is at issue, and that there is potential for
over-compensation, it is appropriate to require disclosure of the settlement
documents at this time. I accept the submission of the defendants that such
disclosure is necessary, in that it may assist in the settlement of the
plaintiff’s claims arising from the third accident. Disclosure at this time is
consistent with the previous decisions of this Court in Pete and Murray.
I am satisfied that the defendants here do not seek a purely tactical
advantage, as the Court found in Phillips v. Stratton, 2007 BCSC 1298,
but rather, they wish to have the information necessary to assess their
exposure, both for purposes of settlement and in the preparation of their case
for trial.

[27]        
In Dos Santos at para. 34, the Court stated that “significant
weight should be given to the just disposition of pending litigation in
determining whether the documents sought come within an exception to settlement
privilege.” In my view, to find that the documents should be disclosed at this
time is consistent with this approach.

[28]        
To the extent that disclosure at this time raises concerns with respect
to the fettering of the trial judge’s determination of damages, the parties may
wish to agree that, as in Gnitrow Ltd, v. Cape plc, [2000] 3 All E.R.
763, the terms of the settlements not be disclosed to the trial judge until a
determination of the damages payable by the defendant has been made: at
para. 21.

[29]        
In the circumstances, I conclude that it is appropriate to make an order
for production of the documents which set out the terms of the settlements of
the plaintiff’s claims arising from the two previous accidents.

[30]        
The defendants are entitled to their costs in the cause.

“Master
S. Scarth”