Common Sense and Litigation

November 10, 2020

By Brian Babcock

A little common sense can go a long way in litigation. The cost and delay in lawsuits can be significantly reduced when parties and their lawyers do the smart thing.

A recent Ontario superior Court case is just one of many examples.

In 1479021 Ontario Inc. v. Hawkesbury (Town), the Plaintiff had purchased an apartment building, only to run into all sorts of trouble with building and occupancy permits. It received compensation from a title insurer, which in turn sued in the name of the owner, attempting to recover damages from the builder, an architect, and the town for negligence (what is known in law as “subrogation”).

Things got well off the rails long before trial.

The insurer, as often happens, proposed to produce its insurance claims adjuster as the witness for the Plaintiff at the examinations for discovery. This made some sense, as he would be a key witness as to the damages.

Discoveries were scheduled on that basis. All the defendants served notices of examination naming the adjuster as the Plaintiff’s representative. The discoveries were scheduled for four consecutive days, one day allocated for each party’s representative to be examined.

So far, pretty normal.

Then, about a week before the scheduled dates, the lawyer for the builder decided that they wanted to examine the owner/president of the actual company, not the insurance adjuster. The owner would know more about liability, but less about damages. Again, not an unusual request. Within reason, parties get to pick who they want to examine, and are not stuck with the suggestion made by the party being examined.

Except, in this case, they had agreed in a discovery plan months before, and served a notice of examination for the adjuster.  The plaintiff’s lawyer had put a lot of time into preparing with the adjuster, especially reviewing the extensive documents involved in the case. They did not think the late substitution was reasonable.

The defendants’ lawyers then suggested that the discovery of the defendants proceed as planned, but that the discovery of the Plaintiff be rebooked to a later date.

The plaintiff’s lawyer refused, because the discoveries were in Ottawa, and they did not want two trips from Toronto, plus, they thought having their client examined last might give the defendants an advantage.

At least one of the defendants then suggested a further compromise – the discoveries would proceed as planned, but the defendants would reserve the right to have a later separate examination of the owner of the Plaintiff, if necessary. This was also refused.

The full four days of scheduled discoveries were then cancelled.

The result was more expense and delay. The lawyers trundled off to take up a judge’s time with this squabble.

By the time the issues were argued, it was all about the cost. Plaintiff lawyer wanted their client to be compensated for the costs “thrown away” on preparation of the adjuster, conceding that they would produce the owner. The defendants responded by asking for their costs wasted.

The motions ended up in front of Calum MacLeod, a senior judge who started his judicial career as a Master – a sort of deputy judge who hears nothing but procedural disputes. So no doubt he is sensitized about motions that waste time and money.  He also happens to have been my classmate. He was wise then, so is wiser now.

Justice MacLeod pointed out that the discovery plan system is intended to encourage parties to think about issues like who is the best witness as they schedule discoveries, not on the eve of the examination dates. Discovery plans are intended to save money, and reduce delay. So the defendants should have thought about this earlier.

Except, lawyers are also expected to work collaboratively on procedural issues. The plaintiff’s lawyer failed to do this.

Justice MacLeod ruled that the defendants’ second proposal – to proceed as scheduled, reserving the right to possibly have a further examination later – was reasonable. Divided discovery, with one witness on liability and another on damages, is not uncommon in subrogated claims.

Unilaterally cancelling the examinations was unreasonable.

Since both sides shared some of the blame, neither recovered their wasted costs. In addition, they wasted the cost of their motions, the time of the judge, and delayed the ultimate resolution of their action.

Wrangling over procedural disputes is seldom in anybody’s best interests. The ultimate objective ought to be resolving the dispute in a cost effective and timely fashion. Acting reasonably, with common sense, is always good strategy, and it avoids annoying judges as well.