MO'ALLIM v GALLANT

An Appeal was brought with respect of a Chambers Judge’s decision regarding the pre-trial production of settlement documents. The Respondent commenced two separate Actions to recover damages arising from two unrelated motor vehicle accidents that occurred sixteen months apart. The two Actions had commonality in some of the injuries being alleged, but each Action alleged unique injuries, as well. The Respondent’s second Action (the “Second Action”) was settled.

The matter was initially brought before an Applications Judge, where the Appellants applied for the disclosure of the settlement documents in the Second Action. The Appellants submitted that injuries in the two Actions were indivisible, and this created a risk of overcompensation if the amount received in the Second Action was not set-off against any potential damages to be awarded. The Respondent argued that while prevention of double recovery was an exception to settlement privilege, the documents ought not be disclosed until the conclusion of the Trial. The Applications Judge determined that the settlement documents were potentially relevant and directed they be produced.

The Respondent appealed the Applications Judge’s decision. The Chambers Judge allowed the Appeal and held that the disclosure of documents could be addressed by a Trial Judge after a determination was made that the injuries were indivisible. The Chambers Judge went on to say that allowing the issue of disclosure to be determined after a determination on the issue of indivisibility would protect settlement privilege while still allowing the parties to address the issue of overcompensation, if it arose.

In making its determination, the Court of Appeal considered the interplay between settlement privilege and the Rules regarding document production. The Court of Appeal noted that, on their face, the settlement documents were producible according to the Rules. Rule 5.2 provides that a record is relevant and material if it could be reasonably expected to either significantly help determine one of the issues raised in the pleading or ascertain evidence that could do so. Given the overlap in the injuries between the two Actions, there was no doubt that these documents were relevant and material. However, the relevance and materiality of the settlement documents would be subject to any privilege that could reasonably be asserted, and there was similarly no doubt that settlement privilege applied to the settlement documents.

The Appeal was dismissed. The disclosure of the settlement documents was ordered to be addressed by the Trial Judge in the event that the injuries were found to be indivisible between the two Actions.