Div. Ct. Says Defence Medical, Surveillance Report from Tort Claim Can’t Be Used in Subsequent AB Litigation

In Kitchenham v. AXA Insurance Canada, the Divisional Court has considered the “deemed undertaking” rule (Rule 30.1.01) in the context of personal injury litigation. The decision of the Court was written by Associate Chief Justice Douglas Cunningham, concurred in by Justices James Kent and Charles Hackland. The ruling takes a restrictive view of the obligation to disclose in one proceeding evidence obtained in another, even when both involve the same plaintiff and arise out of the same incident.

The plaintiff had been injured in a 1993 motor vehicle accident. She had brought a previous action for damages in tort. That action had been settled in 2000. She commenced a second lawsuit (this one), in 1996. In it, she sued for accident benefits arising out of the 1993 accident.

The defendant in the prior lawsuit had obtained an independent medical report (“IME”). It had also undertaken surveillance of the plaintiff. AXA Insurance, the defendant in the AB action, sought disclosure and production of those documents.

AXA’s original motion was heard by Justice Thomas Heeney. He ordered that the documents had to be disclosed to AXA by the plaintiff but that the use to be made of them was to be determined by the trial judge.

The plaintiff appealed from the decision requiring disclosure of the documents and AXA cross-appealed from the restriction imposed by Heeney J. on the use that could be made of the documents.

The Divisional Court allowed the appeal and dismissed the cross-appeal. Its reasons will be instructive for practitioners in this area.

First of all, the Court observed that the IME had been obtained as a form of discovery and the surveillance had been disclosed pursuant to Rule 30, so that the provisions of the deemed undertaking rule applied to both.

The Rule reads as follows:

30.1.01     (1) This Rule applies to,

            (a) evidence obtained under,

                (i) Rule 30 (documentary discovery),

                (ii) Rule 31 (examination for discovery),

                (iii) Rule 32 (inspection of property),

                (iv) Rule 33 (medical examination),

                (v) Rule 35 (examination for discovery by written questions); and

            (b) information obtained from evidence referred to in clause (a).

        (2) This Rule does not apply to evidence or information obtained otherwise than under the rules referred to in subrule (1).

        (3) All parties and their counsel are deemed to undertake not to use evidence or information to which this Rule applies for any purposes other than those of the proceeding in which the evidence was obtained.

        (4) Subrule (3) does not prohibit a use to which the person who disclosed the evidence consents.

        (5) Subrule (3) does not prohibit the use, for any purpose, of,

            (a) evidence that is filed with the court;

            (b) evidence that is given or referred to during a hearing;

            (c) information obtained from evidence referred to in clause (a) or (b).

        (6) Subrule (3) does not prohibit the use of evidence obtained in one proceeding, or information obtained from such evidence, to impeach the testimony of a witness in another proceeding.

        (7) Subrule (3) does not prohibit the use of evidence or information in accordance with subrule 31.11 (8) (subsequent action).

        (8) If satisfied that the interest of justice outweighs any prejudice that would result to a party who disclosed evidence, the court may order that subrule (3) does not apply to the evidence or to information obtained from it, and may impose such terms and give such directions as are just.

The Divisional Court agreed with Heeney J., that Rule 30.1.01(3) applies to both the recipient of the information as well as the “discovered party” in the original proceeding, and to all parties and their counsel in the subsequent proceeding.

However, Heeney J. had held that although Rule 30.1.01(3) constrains the use that can be made of evidence obtained through one of the five discovery methods enumerated in the rule, it does not prevent relevant documents from being disclosed. The Divisional Court disagreed. It held that the wording of Rule 30.1.01(3) was broad enough to include disclosure.

Sub-rule 30.1.01(6) creates an exception to the deemed undertaking rule, to allow evidence from a prior proceeding to be used to impeach a witness in a subsequent proceeding. Justice Heeney had been concerned that if he refused to order that the IME and surveillance be disclosed, that would defeat the operation of sub-rule 30.1.01(6) (since a party would not be able to use a document for impeachment purposes if the document had never been disclosed to it). However, the Divisional Court said that that provision only allows “evidence from another proceeding to be used for impeachment [when it is] lawfully in the hands of the examining party”.

(It is not clear to us how such evidence would find its way into the hands of the examining party without someone having breached the deemed undertaking rule, which would presumably make possession of the document “unlawful”.)

The Divisional Court panel disagreed with Justice Heeney with respect to the latter having left to the trial judge the question of the use that could be made of the surveillance and IME evidence. The Court made it clear that when a party seeks relief from the provisions of Rule 31.1.01, the proper practice is to move for an order under sub-rule (8), asking to be relieved of the strictures imposed by the “deemed undertaking” rule. In this case, the Court felt that it lacked sufficient information to balance the privacy and probative interests at stake in the production of the IME and surveillance reports and so, directed that a motion be heard under sub-rule (8), “on a full record”.

Finally, the Court upheld Justice Heeney’s refusal to order production of the documentation surrounding the settlement of the tort claim. The motions judge had held that this evidence was irrelevant to the AB action and the Divisional Court agreed.

This entry was posted in Auto, Discovery, Insurance News, Practice and Procedure, Privacy. Bookmark the permalink.