Meyers v. Dunphy, (2007) 262 Nfld. & P.E.I.R. 173 (NLCA)

• Judge: Wells, C.J.N.L., Cameron and Rowe, JJ.A.
• Court: Court of Appeal (Newfoundland)
• Case Date: October 19, 2006
• Jurisdiction: Newfoundland and Labrador
• Citations: (2007), 262 Nfld. & P.E.I.R. 173 (NLCA);2007 NLCA 1

Meyers v. Dunphy (2007), 262 Nfld. & P.E.I.R. 173 (NLCA);

    794 A.P.R. 173

MLB headnote and full text

Temp. Cite: [2007] Nfld. & P.E.I.R. TBEd. JA.003

Steve Meyers (appellant) v. Lawrence Dunphy (respondent)

(05/117; 2007 NLCA 1)

Indexed As: Meyers v. Dunphy

Newfoundland and Labrador Supreme Court

Court of Appeal

Wells, C.J.N.L., Cameron and Rowe, JJ.A.

January 5, 2007.

Summary:

Meyers sued Dunphy for damages arising from a motor vehicle accident. The action was commenced outside the two year period set out in s. 5 of the Limitations Act. At issue on this application was (1) whether a series of letters between Meyer's counsel and Dunphy's insurer was a confirmation of the cause of action under s. 16 of the Act and (2) if so, whether the communications were privileged either by the inclusion of the words "without prejudice" on several of the letters, by the privilege accorded negotiations in contemplation of settlement, or by the operation of the disclaimer included in some of the correspondence.

The Newfoundland and Labrador Supreme Court, Trial Division, in a decision reported at 251 Nfld. & P.E.I.R. 157; 752 A.P.R. 157, held that the correspondence was a confirmation of liability, but it was privileged because it was aimed at furthering settlement negotiations. Thus, it was inadmissible for the purpose of confirming an action under s. 16 of the Limitations Act. The plaintiffs appealed.

The Newfoundland and Labrador Court of Appeal dismissed the appeal.

Evidence - Topic 3626

Documentary evidence - Private documents - Letters written without prejudice - Settlement negotiations - Meyers sued Dunphy for damages arising from a motor vehicle accident - The action was commenced outside the two year period set out in s. 5 of the Limitations Act - An applications judge found that a series of letters between Meyer's counsel and Dunphy's insurer was a confirmation of the cause of action under s. 16 of the Act, but it was privileged because it was aimed at furthering settlement negotiations - Thus, it was inadmissible for the purpose of confirming an action under s. 16 - Meyers appealed - The Newfoundland and Labrador Court of Appeal rejected Meyer's submission that the application of the settlement privilege rule to respond to a limitations plea rendered ss. 16(1) and 16(2) inoperable - Admissibility of evidence was an entirely different question, separate and apart from the operation of relevant provisions of the Limitations Act - See paragraphs 28 to 34.

Evidence - Topic 3626

Documentary evidence - Private documents - Letters written without prejudice - Settlement negotiations - Meyers sued Dunphy for damages arising from a motor vehicle accident - The action was commenced outside the two year period set out in s. 5 of the Limitations Act - An applications judge found that a series of letters between Meyer's counsel and Dunphy's insurer was a confirmation of the cause of action under s. 16 of the Act, but it was privileged because it was aimed at furthering settlement negotiations - Thus, it was inadmissible for the purpose of confirming an action under s. 16 - On appeal, Meyers submitted that the settlement privilege rule dealt with two separate and distinct disputes - The "primary dispute" was the question of liability and the amount of any resulting damages - The "secondary dispute" was "an interlocutory dispute" that had arisen relating to whether a confirmation within the meaning of the Limitations Act had occurred - Meyers agreed that the correspondence was privileged in the context of the primary dispute, but contended that the privilege had no application in respect of the secondary dispute - The Newfoundland and Labrador Court of Appeal rejected the submission - The "without prejudice" correspondence, specifically asserted that it was "... not to be taken as acknowledging or confirming any cause of action your client may have against our insured for the purposes of extending the applicable limitation period." - Further, unless a special reason existed, the matter in dispute should not be dissected, with the settlement privilege applying to some issues and not to others - See paragraphs 35 to 46.

Evidence - Topic 3626

Documentary evidence - Private documents - Letters written without prejudice - Settlement negotiations - The Newfoundland and Labrador Court of Appeal found no authority for the proposition that use of otherwise privileged correspondence, for the purpose of establishing confirmation of a cause of action under ss.16(1) and 16(2) of the Limitations Act, was an established exception to the settlement privilege rule - The court stated that it could envisage a circumstance where use of "without prejudice" correspondence to establish confirmation for purposes of the Limitations Act might well be an exception where the circumstances also established some blameworthy or meritorious conduct, as a result of which, a "compelling or overriding interest of justice" warranted admitting the correspondence, notwithstanding the settlement privilege - It could not, however, agree that absent some such special reason, there was anything about confirmation, for purposes of the Limitations Act, that would outweigh the public policy interest, in promoting resolution of disputes by negotiated settlement, and justify admitting in evidence communications protected by settlement privilege - Relevance to confirming a cause of action, for the purposes of ss. 16(1) and 16(2) of the Limitations Act was not, alone, sufficient - See paragraph 52.

Evidence - Topic 3626

Documentary evidence - Private documents - Letters written without prejudice - Settlement negotiations - The Newfoundland and Labrador Court of Appeal established the following principles as a basis for analysing a claimed exception to settlement privilege: "1. Protection of admissions against interest, for the purpose of encouraging settlement discussions, is a compelling public policy basis for settlement privilege; 2. Express or implied agreement of the parties can also be a basis for the rule, and where the admissions fall within what can clearly be identified as a term of an express or implied agreement between the parties that factor is also to be considered; 3. Except where a special reason exists, or on the basis of express or implied agreement, protection should not be withheld from identifiable admissions while extending it to others expressed in the privileged communication; 4. Without prejudice communications are admissible to prove those communications have resulted in a compromise agreement; and 5. Where exclusion of the communication would facilitate an abuse of the privilege, or another compelling or overriding interest of justice requires it, without prejudice communications are admissible." - See paragraph 27.

Evidence - Topic 3626

Documentary evidence - Private documents - Letters written without prejudice - Settlement negotiations - The Newfoundland and Labrador Court of Appeal held that it was desirable to substitute "analysis" for the "fairly mechanistic" application of the settlement privilege with limited specific exceptions - The court endorsed the view that "the rule, if not 'sacred', has a wide and compelling effect" and that "mere relevance does not provide a sufficiently high threshold to displace the compelling public policy underlying settlement privilege." - In addition to relevance, it had to be established that admission of the otherwise privileged communications was necessary, either to achieve the agreement of the parties to the settlement, or to address a compelling or overriding interest of justice - See paragraph 26.

Evidence - Topic 4166

Witnesses - Privilege - Communications - Offers of settlement or settlement negotiations - [See fourth and fifth Evidence - Topic 3626 ].

Limitation of Actions - Topic 9619

Enlargement of time period - Application for - Grounds - Confirmation of cause of action by defendant - [See first, second and third Evidence - Topic 3626 ].

Practice - Topic 4580

Discovery - What documents must be produced - Privileged documents - Documents prepared for the purpose of settlement - [See all Evidence - Topic 3626 ].

Cases Noticed:

Corner Brook Pulp and Paper Ltd. v. SNC Lavalin Environment Inc. et al., [2001] Nfld. & P.E.I.R. Uned. 57 (Nfld. T.D.), refd to. [para. 6].

Corner Brook Pulp & Paper Ltd. v. Geocon - see Corner Brook Pulp and Paper Ltd. v. SNC Lavalin Environment Inc. et al.

White v. Woolworth (F.W.) Co. (1996), 139 Nfld. & P.E.I.R. 324; 433 A.P.R. 324 (Nfld. C.A.), refd to. [para. 12].

York (County) v. Toronto Gravel Road & Concrete Co. (1883), 3 O.R. 584 (Ch.), refd to. [para. 14].

Pirie v. Wyld (1886), 11 O.R. 422 (C.A.), refd to. [para. 14].

Cutts v. Head et al., [1984] 1 All E.R. 597 (C.A.), refd to. [para. 16].

Rush & Tompkins Ltd. v. Greater London Council, [1988] 3 All E.R. 737; 104 N.R. 392 (H.L.), refd to. [para. 16].

Family Housing Association (Manchester) Ltd. v. Michael Hyde & Partners (A Firm), [1993] 2 All E.R. 567 (C.A.), refd to. [para. 16].

Muller v. Linsley & Mortimer (A Firm), [1996] 1 P.N.L.R. 74 (C.A.), refd to. [para. 16].

Unilever plc v. Procter & Gamble Co., [2001] 1 All E.R. 783 (C.A.), refd to. [para. 19].

Derco Industries Ltd. v. Grimwood (A.R.) Ltd. (1984), 57 B.C.L.R. 395 (C.A.), refd to. [para. 23].

Middelkamp et al. v. Fraser Valley Real Estate Board et al. (1992), 17 B.C.A.C. 134; 29 W.A.C. 134; 71 B.C.L.R.(2d) 276 (C.A.), refd to. [para. 23].

Berry v. Cypost Corp. et al., [2003] B.C.T.C. 1827; 21 B.C.L.R.(4th) 186 (S.C.), refd to. [para. 23].

Dos Santos Estate v. Sun Life Assurance Co. of Canada (2005), 207 B.C.A.C. 54; 341 W.A.C. 54; 249 D.L.R.(4th) 416 (C.A.), refd to. [para. 23].

Heritage Duty Free Shop Inc. v. Canada (Attorney General) (2005), 210 B.C.A.C. 264; 348 W.A.C. 264; 40 B.C.L.R.(4th) 152 (C.A.), refd to. [para. 23].

R. v. McIntosh (B.B.), [1995] 1 S.C.R. 686; 178 N.R. 161; 79 O.A.C. 81, refd to. [para. 33].

Belanger v. Gilbert (1984), 14 D.L.R.(4th) 428 (B.C.C.A.), refd to. [para. 40].

Farrell v. Tisdale (1987), 42 D.L.R.(4th) 284 (B.C.C.A.), refd to. [para. 41].

Morris v. Fletcher (1993), 23 B.C.A.C. 313; 39 W.A.C. 313; 76 B.C.L.R.(2d) 287 (C.A.), refd to. [para. 45].

Walker v. Wilsher (1889), 23 Q.B.D. 335, refd to. [para. 45].

Morrissey v. Morrissey et al. (2000), 196 Nfld. & P.E.I.R. 262; 589 A.P.R. 262 (Nfld. C.A.), refd to. [para. 49].

Carfra v. Rader, [1994] B.C.T.C. Uned. F35; 99 B.C.L.R.(2d) 311 (S.C. Master), refd to. [para. 49].

Finn v. St. John's (City) (1997), 153 Nfld. & P.E.I.R. 223; 475 A.P.R. 223 (Nfld. T.D.), refd to. [para. 49].

Unger v. Fortin et al., [1997] B.C.T.C. Uned. 532; 33 B.C.L.R.(3d) 97 (S.C.), refd to. [para. 49].

Unger v. Gooch - see Unger v. Fortin et al.

Low v. Petro-Canada Ltd., [2001] B.C.T.C. 251 (S.C.), refd to. [para. 51].

Sign-O-Lite Signs Ltd. v. Carruthers et al., [2000] B.C.T.C. 1016 (S.C.), refd to. [para. 51].

Statutes Noticed:

Limitations Act, S.N.L. 1995, c. L-16.1, sect. 16(1), sect. 16(2) [para. 11].

Authors and Works Noticed:

Phipson on Evidence (15th Ed. 2000), para. 21-10 [para. 15, footnote 3].

Sopinka, John, Lederman, Sidney N., and Bryant, Alan W., The Law of Evidence in Canada (2nd Ed. 1999), p. 810 [paras. 6, 12, footnotes 1, 2]; paras. 14.204 [para. 14]; 14.207 [paras. 6, 12, footnotes 1, 2]; 14.220 [para. 47].

Counsel:

William Goodridge, Q.C., for the appellant;

Reginald Brown, Q.C., for the respondent.

This appeal was heard on October 19, 2006, by Wells, C.J.N.L., Cameron and Rowe, JJ.A., of the Newfoundland and Labrador Court of Appeal. Wells, C.J.N.L., delivered the following decision for the court on January 5, 2007.