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Tuesday Morning Case Bites for February 18, 2020

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Amanda Kostek & Steven Graham

Pederson v Allstate Insurance Company of Canada, 2020 ABCA 65
Litigation Privilege | Section 579(1) Action

Alston v Haywood Securities Inc, 2020 ABQB 107
Inordinate Delay | Rule 4.31

Pederson v Allstate Insurance Company of Canada, 2020 ABCA 65

The issue in this decision was whether litigation privilege from a prior motor vehicle accident extended over subsequent litigation brought under Section 579 (1) of the Insurance Act.   The Court of Appeal outlined the background facts of the case as follows: 

[2]               The prior litigation arises from a motor vehicle collision in 2003. The plaintiff, Ms Pedersen, sued the registered owner of the vehicle that struck her. Allstate had issued a motor vehicle liability insurance policy to the registered owner who claimed the vehicle had been stolen. Allstate defended the registered owner on that basis. The liability trial was heard in 2012. The trial judge found that the vehicle had not been stolen, that the registered owner’s adult son, who did not have a driver’s license, was operating the vehicle at the time of the collision and was residing with his mother (the registered owner) and was therefore deemed to be driving the vehicle with the owner’s consent at the time of the collision. Ms Pederson was successful in establishing liability for the collision against both the registered owner and her son. While some of these facts were discovered during the course of litigation, Allstate provided a defence until the end of the liability trial. 

The issue was when the underlying litigation came to an end: 

[4]               At issue is the scope of litigation privilege and whether the litigation privilege in the motor vehicle action expired or carried over to the statutory action. The leading case with respect to litigation privilege is Blank v Canada (Minister of Justice), 2006 SCC 39. Not only does this case explain the difference between litigation privilege and solicitor-client privilege, it explains the scope of litigation privilege. The purpose of litigation privilege is to create a “zone of privacy” in relation to current or apprehended litigation. It contemplates communications between solicitor-client but also communications between solicitor and third parties or in the case of an unrepresented litigant, between litigants and third parties. The purpose is to permit parties to litigation to prepare their positions in private without adversarial interference and without fear of premature disclosure: Blank at paras 27 and 34. When the litigation ends, the need for the privilege also ends. The question is: does the litigation privilege survive and continue to apply to related litigation notwithstanding the conclusion of the first litigation? 

[5]               In this context, litigation comes to an end when the litigation which gave rise to the privilege is over, unless there are closely related proceedings: Blank at paras 34 and 36; Reasons at paras 47-48. To assist in determining when separate proceedings are closely related Blank (at para 39) sets out some minimum factors to consider and balance: 

  • Whether the parties are the same or related;
  • Whether the issues arise from the same or a related cause of action (or juridical source);
  • Whether the issues are common in both actions; and
  • Whether the proceedings share the same essential purpose.

The Court of Appeal declined to interfere with the lower Court finding that litigation privilege did not extend to the Section 579 action.  However, it cautioned that this decision was determined on the specific facts of the case, and that it did not necessarily stand for the rule that a personal injury action and Section 579 action could never be closely related: 

[11]           We hasten to add that this decision does not necessarily stand for the proposition that a personal injury accident arising from a motor vehicle and a subsequent statutory action pursuant to s 579(1) of the Insurance Act would never be “closely related” for the purposes of litigation privilege. Rather each case must be decided based on its own factual context. 

Alston v Haywood Securities Inc, 2020 ABQB 107

In the context of an appeal for delay, the Court commented that delays on the part of the Defendant can reduce the length of inordinate delay:

[5] Although I do not agree with all of Master’s Prowse’s reasoning, I dismiss the appeal. The action should be dismissed under Rule 4.31. The overall delay was inordinate. There were periods of joint delay by the parties, acquiescence by the parties in some delay, and defence delay that fell short of active or purposeful obstruction. These reduce the length of the inordinate delay, or excuse some delay, but on the facts of this case do not eliminate or excuse all inordinate delay. Inordinate and inexcusable delay is presumed to have resulted in significant prejudice to the party that brought the delay application. The prejudice in this case includes stale evidence. The Plaintiffs did not rebut the presumption. Given the type of prejudice and the Plaintiffs’ history of obstructing the action, the only adequate remedy is to dismiss the action.