Senin, 24 Desember 2012
Happy Holidays
Happy holidays from the Ontario Insurance Law Blog. We'll be back in January with our weekly posts. We wish you all the best in 2013.
Rabu, 19 Desember 2012
When Has FSCO Mediation Failed - Part 2
Last week, we blogged on the Court of Appeal`s decision in Hurst v. Aviva, which held that insureds may proceed to bring court actions or arbitration proceedings if 60 days have passed since an application for mediation at FSCO has been filed and no mediation has taken place.
The Court released its decision in Younis v. State Farm Insurance Company, 2012 ONCA 836 (C.A.) concurrently with Hurst. In the Hurst actions, the 60 day period had elapsed prior to the insured filing a court action. In Younis, however, the claimant applied for mediation on July 14, 2011 and filed a court action a few days later. State Farm`s motion to stay the action took place well after the 60 day period had elapsed. Justice Sloan refused to stay the action.
The Court of Appeal allowed the appeal. The Court held that the insured commenced his action in contravention of the statutory requirement by not waiting 60 days. Since Younis had not waited until mediation had failed, his action was barred. To allow otherwise would permit insured person to immediately commence civil actions and the statute did not permit this tactic.
The Court released its decision in Younis v. State Farm Insurance Company, 2012 ONCA 836 (C.A.) concurrently with Hurst. In the Hurst actions, the 60 day period had elapsed prior to the insured filing a court action. In Younis, however, the claimant applied for mediation on July 14, 2011 and filed a court action a few days later. State Farm`s motion to stay the action took place well after the 60 day period had elapsed. Justice Sloan refused to stay the action.
The Court of Appeal allowed the appeal. The Court held that the insured commenced his action in contravention of the statutory requirement by not waiting 60 days. Since Younis had not waited until mediation had failed, his action was barred. To allow otherwise would permit insured person to immediately commence civil actions and the statute did not permit this tactic.
Rabu, 12 Desember 2012
When Has FSCO Mediation Failed - Part 1
We previously blogged on the decision in Cornie v. State Farm, in which Justice Sloan held that insureds may commence claims against their accident benefits carriers if 60 days have elapsed since an application for mediation has been filed, even if mediation itself has not occurred. The Court of Appeal has now released its appeal decision in Hurst v. Aviva, 2012 ONCA 837 (C.A.).
Section 281(2) of the Insurance Act prevents insured persons from commencing court actions or arbitrations against their insurers unless they first seek mediation and mediation has failed. The claimants waited 60 days after applying for mediation and when no mediation had taken place, they commenced actions. FSCO`s position was that the prescribed 60 day time limit for conducting mediation did not begin to run until an application for mediation had been assessed by FSCO and found to be complete. FSCO refused to issue a report declaring the mediations had failed. The insurers in four actions brought motions to have the actions stayed on the basis that they were barred by s. 281(2) as mediation had not taken place. Justice Sloan dismissed the motions and the insurers appealed.
The Court of Appeal dismissed the appeals. The Court concluded that the process is intended to be completed with 60 days after an application for mediation has been filed; however, if mediation has not taken place within 60 days, insured persons are free to pursue either court action or arbitration.
The Court rejected the insurers` arguments that the cost to the industry could be $83 million as a result of the interpretation of the Act that does not require mediation to actually take place. The insurers submitted statistics that 75% of claims are resolved by mediation at FSCO. One has to expect a flood of court proceedings as a result of this decision, along with significant costs to insurers.
Section 281(2) of the Insurance Act prevents insured persons from commencing court actions or arbitrations against their insurers unless they first seek mediation and mediation has failed. The claimants waited 60 days after applying for mediation and when no mediation had taken place, they commenced actions. FSCO`s position was that the prescribed 60 day time limit for conducting mediation did not begin to run until an application for mediation had been assessed by FSCO and found to be complete. FSCO refused to issue a report declaring the mediations had failed. The insurers in four actions brought motions to have the actions stayed on the basis that they were barred by s. 281(2) as mediation had not taken place. Justice Sloan dismissed the motions and the insurers appealed.
The Court of Appeal dismissed the appeals. The Court concluded that the process is intended to be completed with 60 days after an application for mediation has been filed; however, if mediation has not taken place within 60 days, insured persons are free to pursue either court action or arbitration.
The Court rejected the insurers` arguments that the cost to the industry could be $83 million as a result of the interpretation of the Act that does not require mediation to actually take place. The insurers submitted statistics that 75% of claims are resolved by mediation at FSCO. One has to expect a flood of court proceedings as a result of this decision, along with significant costs to insurers.
Rabu, 05 Desember 2012
Appellate Jurisdiction
Under the Courts of Justice Act, appeals relating to amounts greater than $50,000 must be made to the Court of Appeal. Appeals of judgments relating to amounts under $50,000 are to the Divisional Court. Where only a portion of a judgment is appealed, does the jurisdiction change?
In Grammatico v. Chambers, 2012 ONSC 6518 (Div. Ct.), the parties disagreed on whether the proper court to hear an appeal was the Divisional Court or the Court of Appeal. The substantive judgment involved sums greater than $50,000, the threshold imposed by s. 19(1.2) of the Courts of Justice Act for appeals to the Court of Appeal. The defendant argued that it sought to appeal an interest component relating to costs, rather than the substantive judgment. Since the amount would be less than $50,000 the defendant's position was that the appeal was to the Divisional Court.
Justice Eberhard held that the appeal was to the Court of Appeal. The jurisdiction for appeal must be determined by the aggregate of the sums awarded. The fact that only one part of the decision was under appeal did not determine jurisdiction.
In Grammatico v. Chambers, 2012 ONSC 6518 (Div. Ct.), the parties disagreed on whether the proper court to hear an appeal was the Divisional Court or the Court of Appeal. The substantive judgment involved sums greater than $50,000, the threshold imposed by s. 19(1.2) of the Courts of Justice Act for appeals to the Court of Appeal. The defendant argued that it sought to appeal an interest component relating to costs, rather than the substantive judgment. Since the amount would be less than $50,000 the defendant's position was that the appeal was to the Divisional Court.
Justice Eberhard held that the appeal was to the Court of Appeal. The jurisdiction for appeal must be determined by the aggregate of the sums awarded. The fact that only one part of the decision was under appeal did not determine jurisdiction.
Rabu, 28 November 2012
Costs on a Summary Judgment Motion
In Mo v. Johnson, the defendant successfully moved for summary judgment dismissing the plaintiff's claim. Justice Morgan's decision on costs is reported at 2012 ONSC 6307 (CanLii).
One of the arguments made by the plaintiff was that the defendant was only entitled to costs of the motion, not the entire action. Justice Morgan disagreed, holding that:
One of the arguments made by the plaintiff was that the defendant was only entitled to costs of the motion, not the entire action. Justice Morgan disagreed, holding that:
[24] I agree with Mr. Bizezinski that where summary judgment dismisses the action, it is the costs of the action in its entirety that are at issue. To hold otherwise would allow a party who brings spurious litigation to cause the opposing side to incur substantial costs with no means of compensation.
The defendant was awarded costs of the entire action on a substantial indemnity basis due to the plaintiff's conduct, which was described as "aggressive and high-handed". The decision is a nice synopsis of some of the basic principles relating to costs.
Rabu, 21 November 2012
Cost of Productions
Who pays for the cost of producing documents?
In Veillette v. Piazza Family Trust, 2012 ONSC 4782 (S.C.J.), the plaintiffs brought a motion to compel the defendant to answer undertakings and refusals he gave on an examination in aid of execution. The defendant took the position that the plaintiffs must pay any charges for obtaining the documents.
The Court cited two cases dealing with production of documents before trial, Ho v. O’Young-Lui, 2002 CanLII 6346 (ON SC), and Traverse v. Turnbull, [1996] N.S.J. No. 212 N.S.C.A. which held that the general rule is the party in possession or control of the documents is to produce them at their expense, although the court has residual discretion to depart from that rule where fairness and justice so require. The general rule may be altered if its application would prevent a party from presenting its case. Justice Kane held that there was no reason to depart from the general rule.
Although this case deals with an examination in aid of execution, disagreement over who pays for documents can often arise in the context of examination for discovery. The Veillette case is useful in providing a succinct argument as to why plaintiffs should bear the cost of producing their documents.
In Veillette v. Piazza Family Trust, 2012 ONSC 4782 (S.C.J.), the plaintiffs brought a motion to compel the defendant to answer undertakings and refusals he gave on an examination in aid of execution. The defendant took the position that the plaintiffs must pay any charges for obtaining the documents.
The Court cited two cases dealing with production of documents before trial, Ho v. O’Young-Lui, 2002 CanLII 6346 (ON SC), and Traverse v. Turnbull, [1996] N.S.J. No. 212 N.S.C.A. which held that the general rule is the party in possession or control of the documents is to produce them at their expense, although the court has residual discretion to depart from that rule where fairness and justice so require. The general rule may be altered if its application would prevent a party from presenting its case. Justice Kane held that there was no reason to depart from the general rule.
Although this case deals with an examination in aid of execution, disagreement over who pays for documents can often arise in the context of examination for discovery. The Veillette case is useful in providing a succinct argument as to why plaintiffs should bear the cost of producing their documents.
Rabu, 14 November 2012
Martin v. Fleming - Deductibles
The Court of Appeal has now released its decision in Martin v. Fleming, which can be found at the following link: Martin v. Fleming, 2012 ONCA 750 (C.A.)
At issue was the operation of the deductible where a plaintiff has been in multiple accidents. The motions judge ruled that where the plaintiff has been involved in two accidents and the actions are tried together, there is a deductible for each action.
In a brief endorsement, the Court of Appeal dismissed the appeal. They followed the motion judge's reasoning that s. 267.5(7) is unambiguous and the plaintiff is subject to two deductibles.
Although this is a brief endorsement, it is important to those defending claims where the plaintiff has been in multiple accidents. Insurers for each defendant retain the benefit of the deductible.
Rabu, 07 November 2012
Expert Independence
Do the new rules pertaining to expert evidence impose a higher duty than at common law? When an expert is alleged to be biased due to a connection to one of the parties or a matter in issue, does it go to admissibility or weight?
In Henderson v. Risi, 2012 ONSC 3459 (S.C.J.), the defendant proffered an expert, Mozessohn, to give testimony at trial regarding irregularities in the financial records of Timeless Inc., provide an opinion on the value of shares in Timeless held by the plaintiff, and critique the plaintiff expert's opinion. The plaintiff objected to the admissibility of Mozessohn's evidence on the basis that he was not independent or impartial since he was a partner in the accounting firm that acted as Timeless' Trustee in Bankruptcy. Mozessohn testified that there had been no communication between members of his firm about the case.
Justice Lederman quoted the Newfoundland Court of Appeal in Gallant v. Brake-Patten 2012 NLCA 23 (CanLII), which summed up the law regarding the admissibility of expert evidence where the allegation is the expert lacks institutional independence as opposed to personal advocacy:
Plaintiff's counsel argued that the new r. 4.1 and the changes to r. 53 imposed a higher level on duty on an expert in Ontario, and that the question of institutional independence must be determined at the admissibility stage rather than leaving it to be considered as a matter of weight.
Justice Lederman disagreed and allowed the expert to give testimony. Rules 4.1 and 53 simply remind experts of their already existing obligations to provide opinion evidence that is fair, objective and non-partisan. Any lack of institutional independence went to weight rather than admissibility. The new rules impose no higher duties than already existed at common law.
In Henderson v. Risi, 2012 ONSC 3459 (S.C.J.), the defendant proffered an expert, Mozessohn, to give testimony at trial regarding irregularities in the financial records of Timeless Inc., provide an opinion on the value of shares in Timeless held by the plaintiff, and critique the plaintiff expert's opinion. The plaintiff objected to the admissibility of Mozessohn's evidence on the basis that he was not independent or impartial since he was a partner in the accounting firm that acted as Timeless' Trustee in Bankruptcy. Mozessohn testified that there had been no communication between members of his firm about the case.
Justice Lederman quoted the Newfoundland Court of Appeal in Gallant v. Brake-Patten 2012 NLCA 23 (CanLII), which summed up the law regarding the admissibility of expert evidence where the allegation is the expert lacks institutional independence as opposed to personal advocacy:
In summary, in civil cases, if expert evidence meets the Mohan criteria for admissibility, it is admissible. Bias or partiality in expert evidence which is based on the expert having a connection with a party or issue or a possible pre-disposition or approach in the case is a reliability issue which is best determined when the whole of the expert evidence is considered in the context of all of the trial evidence. As such, the issue is one of weight and not admissibility.
Plaintiff's counsel argued that the new r. 4.1 and the changes to r. 53 imposed a higher level on duty on an expert in Ontario, and that the question of institutional independence must be determined at the admissibility stage rather than leaving it to be considered as a matter of weight.
Justice Lederman disagreed and allowed the expert to give testimony. Rules 4.1 and 53 simply remind experts of their already existing obligations to provide opinion evidence that is fair, objective and non-partisan. Any lack of institutional independence went to weight rather than admissibility. The new rules impose no higher duties than already existed at common law.
Rabu, 31 Oktober 2012
Restricting Summary Judgment
Are courts beginning to restrict the use of summary judgment?
Justice Brown took the opportunity to comment on summary judgment in a decision encompassing two cases, George Weston Limited v. Domtar Inc and 1318214 Ontario Limited v. Sobeys Capital Inc., 2012 ONSC 5001 (S.C.J.). These were two cases from the Commerical List in Toronto where counsel sought to schedule summary judgment motions. In George Weston, the plaintiff sought to schedule a summary judgment motion prior to examinations for discovery. In 1318214 Ontario, discoveries were mostly complete and when the plaintiff sought to set the matter down for trial, the defendant advised it intended to bring a motion for partial summary judgment to limit the issues for trial.
Justice Brown laments the motion culture in Toronto and what he sees as a reluctance of counsel, especially counsel who have practiced for less than 15 years, to bring cases to trial. He suggests that instead of bringing summary judgment motions, counsel should take more cases to trial and that courts should facilitate the process by approving innovative ways of proceeding to trial; for example, evidence could be a hybrid of written and viva voce evidence.
It will be interesting to see if other judges share Justice Brown's concerns and if courts will start restricting the use of summary judgment motions. Defence counsel and insurers will need to carefully assess each case to determine whether the appropriate way is to proceed by way of summary judgment or whether it might be more beneficial to simply proceed to trial.
Justice Brown took the opportunity to comment on summary judgment in a decision encompassing two cases, George Weston Limited v. Domtar Inc and 1318214 Ontario Limited v. Sobeys Capital Inc., 2012 ONSC 5001 (S.C.J.). These were two cases from the Commerical List in Toronto where counsel sought to schedule summary judgment motions. In George Weston, the plaintiff sought to schedule a summary judgment motion prior to examinations for discovery. In 1318214 Ontario, discoveries were mostly complete and when the plaintiff sought to set the matter down for trial, the defendant advised it intended to bring a motion for partial summary judgment to limit the issues for trial.
Justice Brown laments the motion culture in Toronto and what he sees as a reluctance of counsel, especially counsel who have practiced for less than 15 years, to bring cases to trial. He suggests that instead of bringing summary judgment motions, counsel should take more cases to trial and that courts should facilitate the process by approving innovative ways of proceeding to trial; for example, evidence could be a hybrid of written and viva voce evidence.
It will be interesting to see if other judges share Justice Brown's concerns and if courts will start restricting the use of summary judgment motions. Defence counsel and insurers will need to carefully assess each case to determine whether the appropriate way is to proceed by way of summary judgment or whether it might be more beneficial to simply proceed to trial.
Rabu, 24 Oktober 2012
Second Independent Medical Examination - Evidence
What evidence is necessary on a motion to compel the plaintiff to attend a second independent medical examination?
In Nasir v. Kochmanski, 2012 ONSC 4088 (S.C.J.), the plaintiff was a minor who was injured in a motor vehicle accident. The claim alleged the plaintiff was struck while a pedestrian and sustained a head injury and various psychological impairments. He had been assessed by a number of medical doctors and psychologists, both treating and arranged by plaintiff`s counsel. He had been assessed by a paediatric neurologist on behalf of the defendant, although no report had been prepared. The defendant sought to have the plaintiff assessed by a psychologist. The proposed assessor wrote a letter to defence counsel outlining the assessment, its length, information she would require from the plaintiff`s parents, and test results from other assessments she required.
Justice Daley permitted the assessment. The proposed assessment was outside the scope of expertise of the neurologist, according to the psychologist`s letter. There was no evidence the assessment would delay trial or prejudice the plaintiff. Since the plaintiff was very young, his evidence would be of limited evidentiary value, and the most probative and reliable evidence would have to come from experts. Trial fairness favoured the second examination.
It should be noted that the evidence in support of the motion appears to come from a letter from the proposed assessor. Justice Daley stated that it would have been preferable to have an affidavit or report from the neurologist outlining the need for a further examination, but accepted that there was enough evidence to support the motion. There is some inconsistency in the case law as to the form of evidence needed on a motion for a further examination, and counsel should carefully consider whether it would be beneficial to have affidavit evidence.
In Nasir v. Kochmanski, 2012 ONSC 4088 (S.C.J.), the plaintiff was a minor who was injured in a motor vehicle accident. The claim alleged the plaintiff was struck while a pedestrian and sustained a head injury and various psychological impairments. He had been assessed by a number of medical doctors and psychologists, both treating and arranged by plaintiff`s counsel. He had been assessed by a paediatric neurologist on behalf of the defendant, although no report had been prepared. The defendant sought to have the plaintiff assessed by a psychologist. The proposed assessor wrote a letter to defence counsel outlining the assessment, its length, information she would require from the plaintiff`s parents, and test results from other assessments she required.
Justice Daley permitted the assessment. The proposed assessment was outside the scope of expertise of the neurologist, according to the psychologist`s letter. There was no evidence the assessment would delay trial or prejudice the plaintiff. Since the plaintiff was very young, his evidence would be of limited evidentiary value, and the most probative and reliable evidence would have to come from experts. Trial fairness favoured the second examination.
It should be noted that the evidence in support of the motion appears to come from a letter from the proposed assessor. Justice Daley stated that it would have been preferable to have an affidavit or report from the neurologist outlining the need for a further examination, but accepted that there was enough evidence to support the motion. There is some inconsistency in the case law as to the form of evidence needed on a motion for a further examination, and counsel should carefully consider whether it would be beneficial to have affidavit evidence.
Rabu, 17 Oktober 2012
Catastrophic Impairment: Aviva v. Pastore
The Court of Appeal has released an important decision relating to catastrophic impairment:
Aviva Canada Inc. v. Pastore, 2012 ONCA 642 (C.A.)
The insured was injured in a 2002 motor vehicle accident as a pedestrian and sustained an ankle injury. She alleged her gait had been altered and was diagnosed with a pain disorder. A DAC found her to be catastrophically impaired in 2005 due to a marked mental or behavioural impairment under s. 2(1.1)(g) of the SABS. An assessment under s. 2(1.1)(g) is carried out with reference to the AMA Guides, which provide for an assessment of function in four categories:
Pastore was diagnosed with a number of psychological disorders and the DAC concluded that she had a class 4 marked impairment in activities of daily living. The DAC concluded she was catastrophically impaired on the basis of the one class 4 impairment. The insurer did not agree with the assessment and the matter proceeded to mediation then arbitration.
At arbitration, the arbitrator agreed with the DAC assessors and held that one marked impairment was enough to comply with the Guides approach to impairment. In addition, it was appropriate to consider physical pain in assessing mental disorder, as it was not possible to factor out all physically based pain since it was intertwined with mentally based pain. The Director's Delegate upheld the decision, but the Divisional Court overturned the arbitrator.
The Court of Appeal allowed the appeal and reinstated the arbitrator`s decision. The conclusion that only one marked impairment is sufficient to meet the definition of catastrophic impairment was a reasonable one. In addition, it was not an error for the DAC assessors to consider both physical and mental pain.
Pastore appears to have lowered the bar for catastrophic impairment based on a mental disorder and more claimants may be able to fit themselves into a catastrophic designation than prior to this decision.
Aviva Canada Inc. v. Pastore, 2012 ONCA 642 (C.A.)
The insured was injured in a 2002 motor vehicle accident as a pedestrian and sustained an ankle injury. She alleged her gait had been altered and was diagnosed with a pain disorder. A DAC found her to be catastrophically impaired in 2005 due to a marked mental or behavioural impairment under s. 2(1.1)(g) of the SABS. An assessment under s. 2(1.1)(g) is carried out with reference to the AMA Guides, which provide for an assessment of function in four categories:
(1) Activities of daily living (ADL);
(2) Social functioning;
(3) Concentration, persistence and pace; and
(4) Deterioration or decompensation in work or work-like settings.
Pastore was diagnosed with a number of psychological disorders and the DAC concluded that she had a class 4 marked impairment in activities of daily living. The DAC concluded she was catastrophically impaired on the basis of the one class 4 impairment. The insurer did not agree with the assessment and the matter proceeded to mediation then arbitration.
At arbitration, the arbitrator agreed with the DAC assessors and held that one marked impairment was enough to comply with the Guides approach to impairment. In addition, it was appropriate to consider physical pain in assessing mental disorder, as it was not possible to factor out all physically based pain since it was intertwined with mentally based pain. The Director's Delegate upheld the decision, but the Divisional Court overturned the arbitrator.
The Court of Appeal allowed the appeal and reinstated the arbitrator`s decision. The conclusion that only one marked impairment is sufficient to meet the definition of catastrophic impairment was a reasonable one. In addition, it was not an error for the DAC assessors to consider both physical and mental pain.
Pastore appears to have lowered the bar for catastrophic impairment based on a mental disorder and more claimants may be able to fit themselves into a catastrophic designation than prior to this decision.
Rabu, 10 Oktober 2012
Motion to Add Municipal Defendant Dismissed
A motion to add a municipality as a defendant was recently dismissed.
In Temporin v. DiVincenzo, 2012 ONSC 5213 (S.C.J.), the plaintiff was injured in a 2007 motor vehicle accident. Although the City of Burlington had been named as a third party, the plaintiff did not move to add it as a defendant until 2012. The plaintiff ordered the police report in 2007, but did not receive officer's notes as counsel had inadvertently neglected to send payment. The notes were ultimately received in 2010 when a follow up request was made. They referred to road conditions consisting of "fierce" black ice. The plaintiff argued that the two year limitation period for adding the municipality began in 2010.
Parayeski J. dismissed the motion. The failure to follow up for police notes until 2010 did not give rise to a discoverability issue. The plaintiff had not exercised reasonable diligence and even though there was no prejudice to the municipality, this did not justify it being added as a defendant post-limitation.
This decision is a good example of the maxim that limitation periods are not enacted to be ignored. The burden is on plaintiffs to act diligently to identify defendants within the appropriate limitation period.
In Temporin v. DiVincenzo, 2012 ONSC 5213 (S.C.J.), the plaintiff was injured in a 2007 motor vehicle accident. Although the City of Burlington had been named as a third party, the plaintiff did not move to add it as a defendant until 2012. The plaintiff ordered the police report in 2007, but did not receive officer's notes as counsel had inadvertently neglected to send payment. The notes were ultimately received in 2010 when a follow up request was made. They referred to road conditions consisting of "fierce" black ice. The plaintiff argued that the two year limitation period for adding the municipality began in 2010.
Parayeski J. dismissed the motion. The failure to follow up for police notes until 2010 did not give rise to a discoverability issue. The plaintiff had not exercised reasonable diligence and even though there was no prejudice to the municipality, this did not justify it being added as a defendant post-limitation.
This decision is a good example of the maxim that limitation periods are not enacted to be ignored. The burden is on plaintiffs to act diligently to identify defendants within the appropriate limitation period.
Rabu, 03 Oktober 2012
Election of Arbitration or Court Proceeding
Gordyukova v. Certas Direct Insurance Company, 2012 ONCA 563 (C.A.)
The subject of this appeal is s. 281.1(1) of the Insurance Act, which provides that an insured shall commence a court proceeding or arbitration within two years of the insurer's refusal to pay benefits.
The plaintiff was in a motor vehicle accident in 2001. She applied for accident benefits and a dispute arose over certain medical benefits. After mediation failed, she issued a Statement of Claim in 2002. In 2005, the insurer advised her she had exhausted her non-catastrophic limits for medical and rehabilitation benefits. Her application for a catastrophic designation was rejected so she commenced an arbitration at FSCO in 2008. Certas brought a motion to stay the arbitration on the grounds that the CAT dispute should be added to the court action. The arbitrator ruled the plaintiff could not proceed with both the court action and the arbitration, but could proceed with arbitration if she discontinued the court action. The arbitrator ruled he was not ruling on the limitation issue. The plaintiff gave notice of her intention to discontinue the court action and proceed with arbitration, and the insurer brought a motion seeking a ruling on the limitation issue. The arbitrator ruled the plaintiff could add all of the matters pending before the Superior Court to the arbitration.
Certas appealed, arguing that the plaintiff could not re-elect the method of proceeding eight years after the court action was commenced. The matter was appealed to the Director 's Delegate then the Divisional Court.
The Court of Appeal held that the arbitration should be stayed. Section 281.1(1) of the Insurance Act requires an election between a court action and an arbitration. It provides that a proceeding shall be brought within two years. The insured has the choice of forum, but cannot switch forums after the expiry of the limitation period. Since the court proceeding included a claim for "continued accident benefits", it would necessarily include a determination of the CAT issue.
The subject of this appeal is s. 281.1(1) of the Insurance Act, which provides that an insured shall commence a court proceeding or arbitration within two years of the insurer's refusal to pay benefits.
The plaintiff was in a motor vehicle accident in 2001. She applied for accident benefits and a dispute arose over certain medical benefits. After mediation failed, she issued a Statement of Claim in 2002. In 2005, the insurer advised her she had exhausted her non-catastrophic limits for medical and rehabilitation benefits. Her application for a catastrophic designation was rejected so she commenced an arbitration at FSCO in 2008. Certas brought a motion to stay the arbitration on the grounds that the CAT dispute should be added to the court action. The arbitrator ruled the plaintiff could not proceed with both the court action and the arbitration, but could proceed with arbitration if she discontinued the court action. The arbitrator ruled he was not ruling on the limitation issue. The plaintiff gave notice of her intention to discontinue the court action and proceed with arbitration, and the insurer brought a motion seeking a ruling on the limitation issue. The arbitrator ruled the plaintiff could add all of the matters pending before the Superior Court to the arbitration.
Certas appealed, arguing that the plaintiff could not re-elect the method of proceeding eight years after the court action was commenced. The matter was appealed to the Director 's Delegate then the Divisional Court.
The Court of Appeal held that the arbitration should be stayed. Section 281.1(1) of the Insurance Act requires an election between a court action and an arbitration. It provides that a proceeding shall be brought within two years. The insured has the choice of forum, but cannot switch forums after the expiry of the limitation period. Since the court proceeding included a claim for "continued accident benefits", it would necessarily include a determination of the CAT issue.
Rabu, 26 September 2012
Threshold Motion Successful
Surveillance evidence can be useful in showing that the plaintiff does not meet the Insurance Act threshold.
In Dahrouj v. Aduvala, 2012 ONSC 4090 (S.C.J.), the plaintiff was injured in a minor rear end collision. She was a homemaker and alleged she developed chronic pain which impaired her functioning in the home and her social interaction in the community.
The evidence at trial was that the plaintiff visited her family doctor on multiple occasions prior to the accident complaining of head, neck and back pain. She made similar complaints post-accident. The defendant obtained surveillance showing the plaintiff engaged in a variety of activities, including scraping snow and ice off her car, pumping gas, reaching for groceries on an upper shelf and carrying groceries. Justice Hackland described the video as “particularly devastating” to the plaintiff’s credibility, as it showed the plaintiff stretching and lifting, the activities she alleged restricted her functioning as a homemaker.
The plaintiff’s expert diagnosed her with “central sensitization”, based on a 45 minute interview and relying only on the plaintiff’s self reports. Justice Hackland preferred the defence expert, who conducted a more thorough assessment and whose opinion was corroborated by the surveillance evidence.
Justice Hackland held the plaintiff had not proved she sustained a serious, permanent impairment of an important physical function. As a result, she was not entitled to general damages and her recovery was limited to $32,000, the amount the jury awarded for past housekeeping.
Surveillance of the plaintiff can be extremely important in defending claims, especially those alleging chronic pain. When surveillance can be combined with expert opinion, it can be effective in showing that the plaintiff’s claim does not meet the threshold.
Rabu, 19 September 2012
Adding an Insurer as a Defendant Rather than a Statutory Third Party
Can an insurer add itself as a defendant rather than as a statutory third party?
In Azad v. Dekran, 2012 ONSC 4257 (S.C.J.), the Personal insured the defendant and brought a motion pursuant to r. 13.01 to intervene as an added defendant. It wished to allege that the accident did not occur or was staged and to crossclaim against its insured. It preferred this route rather than being added as a statutory third party since s. 258(14) of the Insurance Act prohibits a statutory third party from taking a position incongruous to its insured.
Master Dash dismissed the motion, holding that it was not a proper use of r. 13.01. One of the purposes of s. 258 is to permit an insurer to contest the plaintiff’s claim in a situation where it denies coverage. The plaintiff’s action is not the appropriate forum to decide issues between the insured and insurer. Any dispute could be decided in subsequent proceedings, including a proceeding to recover the statutory minimum paid to the plaintiff.
Master Dash noted that if the accident was staged, the plaintiff would not be entitled to damages; on the other hand, if the trial court did award damages, it would mean there was a legitimate accident and there would be no basis for a crossclaim against the insured. In addition, as a statutory third party, the insurer would have a right to discover its insured.
Master Dash refused to follow the decision in Esho v. Dekran, 2012 ONSC 3638 (S.C.J.), where the insurer was added as a defendant. Now that there are conflicting decisions on this issue, perhaps it will be up to the Divisional Court
Rabu, 12 September 2012
Production of Statements Made Following an Accident
A recent motion decision deals with two issues that can arise in defending claims: the extent of litigation privilege with respect to statements made following an incident, and whether reviewing such a statement prior to examination for discovery waives privilege.
In Knox v. Applebaum Holdings, 2012 ONSC 4181 (CanLii) the plaintiff brought a motion seeking production of a statement prepared by the defendant’s property manager following an accident in its parking lot. The accident occurred at 8:55 p.m.. The property manager was quickly notified, travelled to the parking lot, took pictures and called her risk manager to report what she had found at 12:35 a.m. At this point, she was aware that two people had been injured. She typed up a statement detailing her recollection of what she had seen and learned of the accident while it was fresh in her mind. The statement was delivered to the adjuster later that day.
On the motion, the issues were whether the statement was protected by litigation privilege and whether privilege was lost when the property manager reviewed it when she prepared for her examination for discovery.
Justice Hockin held that litigation privilege attached to the document. The property manager knew there was an accident and that two people had been injured. She believed that litigation would follow. It did not matter that the defendant was not represented by counsel at the time. The dominant purpose of the document was to facilitate her employer’s defence and to assist in her forensic involvement of the case.
Privilege was not waived. Justice Hockin relied on Wronick v. Allstate (1997), 7 C.P.C. (4th) 285 (Gen. Div.) where Justice Leitch held that reviewing a privilege document to refresh one’s memory in preparation for examination for discovery does not amount to a waiver of privilege.
Rabu, 05 September 2012
Failure to Add Property Owner as Additional Insured
Many winter maintenance contracts require the contractor to add the property owner as an additional insured on its policy. But what happens when the contractor fails to do so and the owner is sued?
In Papapetrou v. 1054422 Ontario Ltd., 2012 ONCA 506 (C.A.), the plaintiff sued the Cora Group, alleging she slipped and fell on black ice on its property. Cora contracted with Collingwood Landscape for winter maintenance services. In the service contract, Collingwood agreed to name Cora as an additional insured on its CGL policy, but failed to do so. On a motion for summary judgment, Collingwood was ordered to assume Cora's defence and indemnify it for damages. Collingwood appealed. Cora conceded that the order to indemnify was premature so the primary issue on appeal was whether the motions judge erred in ordering Collingwood to assume Cora's defence.
The Court of Appeal set aside the original Order and substituted an Order that Collingwood pay for Cora's defence.
Simmons J.A. held that Collingwood's breach of its contractual obligation to name Cora as an additional insured did not create a duty to defend; rather, it gave rise to a remedy in damages. The quantum of such damages is the amount Cora will be required to pay for a defence of the claims that Collingwood's insurer would have paid had Collingwood fulfilled its contractual obligations. The costs would include all of the costs of Cora's defence except for those incurred exclusively to defend claims that do not arise from Collingwood's performance or non-performance of the contract. Cora was entitled to separate counsel given there were distinct claims against the two parties, which meant there would be an inherent conflict between them.
Rabu, 29 Agustus 2012
Withdrawing Deemed Admissions
When will a party be permitted to withdraw deemed admissions arising from the failure to respond to a Request to Admit?
In Epstein Equestrian Enterprises Inc. v. Cyro Canada Inc., 2012 ONSC 4653 (S.C.J.), the plaintiff served a Request to Admit eleven days before trial was scheduled to begin in 2010. Trial was adjourned initially for one week and then again until 2012. One of the defendants, Jonkman, failed to respond to the Request to Admit. Rule 51.02(1) provides that a party is deemed to admit the contents of a Request to Admit if it does not respond to it within 20 days after it is served. Jonkman sought to either set aside the Request to Admit or to withdraw the admissions.
Justice Morgan held that even though the Request to Admit was not served 20 days before trial, once the trial was adjourned and did not start for 20 days, the deeming provision applied. The main issue therefore centred on whether Jonkman was entitled to withdraw its admissions. The court may grant leave to withdraw the admissions if the following conditions are met:
Justice Morgan held that even though the Request to Admit was not served 20 days before trial, once the trial was adjourned and did not start for 20 days, the deeming provision applied. The main issue therefore centred on whether Jonkman was entitled to withdraw its admissions. The court may grant leave to withdraw the admissions if the following conditions are met:
- The proposed change raises a triable issue;
- There is a reasonable explanation for the change of position; and
- The withdrawal will not result in any prejudice that cannot be compensated for in costs. (citing Antipas v. Coroneos, 1988 CarswellOnt 358)
Justice Morgan permitted the admissions to be withdrawn. At the time the Request was served, Jonkman was basically without legal representation as its counsel was in the process of being removed from the record. It had instructed counsel not to respond to the Request to Admit. It subsequently brought a coverage application and was now being defended by an insurer. The plaintiff supported the coverage application and must have understood that if coverage was achieved, a defence would be pursued. Jonkman's new counsel and insurer were unaware of the Request Admit and it would be unable to defend itself if the admissions stood. The coverage application had been settled, and Justice Morgan speculated that the insurer's position may have been different had it known that Jonkman had effectively deprived itself of a defence by failing to respond to a wide ranging Request to Admit.
Justice Morgan was of the view that any prejudice to the plaintiff would not be inordinate as a trial would have been needed to canvas issues with the co-defendant in any event. The plaintiff further argued it was prejudiced as it had entered into a Pierringer Agreement with the remaining defendants and was concerned Jonkman would attempt to pin liability on those parties at trial. Justice Morgan held that the plaintiff had previously assumed Jonkman was insolvent when it entered the settlement and so this factor was to the plaintiff's benefit not prejudice. The admissions were withdrawn.
Rabu, 22 Agustus 2012
Action Dismissed for Failing to Comply with Municipal Act Notice Requirement
Argue v. Tay (Township), 2012 ONSC 4622 (CanLii)
A municipality was recently successful in having a case dismissed based on the failure of the plaintiff to comply with s. 44(10) of the Municipal Act. The section requires written notice be given to the clerk within ten days of the incident. Section 44(12) provides that the failure to give notice can be excused if the plaintiff has a reasonable excuse and the defendant is not prejudiced by the lack of notice.
In Argue v. Tay (Township), the plaintiff alleged she sustained soft tissue injuries in a motor vehicle accident caused by potholes in the defendant municipality's road. She provided written notice through her lawyer almost two years after the incident. By that time, the surface of the road had changed materially. The plaintiff argued the municipality had either actual or constructive knowledge of the accident as the municipal volunteer fire department attended the scene and would have received a copy of the police report. The municipality brought a summary judgment motion seeking to have the action dismissed for failing to comply with the Municipal Act notice requirement.
DiTomaso J. held the plaintiff did not comply with the notice requirements. Section 44(10) requires written notice be given to the clerk and the fact that the fire department attended or may have received a copy of the police report was insufficient to comply with the section. There is no support in the jurisprudence that actual or construction notice pre-empts the requirement to give written notice to the clerk, and the section cannot be dispensed with in favour of notice to a different municipal department.
The plaintiff had no reasonable excuse for the failure to give notice. She was discharged from hospital the same day as the accident, had no broken bones and was able to return to work two to three weeks after the accident. She was aware people could bring lawsuits and believed the state of the road contributed to the accident, yet took no steps to inform herself about the law. She was physically and mentally able to instruct counsel.
The municipality had been prejudiced by the lack of notice. There is a presumption of prejudice where notice has not been provided and the plaintiff bears the onus of showing there was no prejudice. She failed to do so. Neither she nor the municipality had photos or measurements of the road, the condition of the road had changed materially since the accident and the municipality had lost the opportunity to interview witnesses. As a result, summary judgment was granted.
Argue is a useful summary of the relevant authorities relating to s. 44(12). Those defending municipal claims with notice issues should consider whether it would be useful to bring a summary judgment motion in the circumstances.
A municipality was recently successful in having a case dismissed based on the failure of the plaintiff to comply with s. 44(10) of the Municipal Act. The section requires written notice be given to the clerk within ten days of the incident. Section 44(12) provides that the failure to give notice can be excused if the plaintiff has a reasonable excuse and the defendant is not prejudiced by the lack of notice.
In Argue v. Tay (Township), the plaintiff alleged she sustained soft tissue injuries in a motor vehicle accident caused by potholes in the defendant municipality's road. She provided written notice through her lawyer almost two years after the incident. By that time, the surface of the road had changed materially. The plaintiff argued the municipality had either actual or constructive knowledge of the accident as the municipal volunteer fire department attended the scene and would have received a copy of the police report. The municipality brought a summary judgment motion seeking to have the action dismissed for failing to comply with the Municipal Act notice requirement.
DiTomaso J. held the plaintiff did not comply with the notice requirements. Section 44(10) requires written notice be given to the clerk and the fact that the fire department attended or may have received a copy of the police report was insufficient to comply with the section. There is no support in the jurisprudence that actual or construction notice pre-empts the requirement to give written notice to the clerk, and the section cannot be dispensed with in favour of notice to a different municipal department.
The plaintiff had no reasonable excuse for the failure to give notice. She was discharged from hospital the same day as the accident, had no broken bones and was able to return to work two to three weeks after the accident. She was aware people could bring lawsuits and believed the state of the road contributed to the accident, yet took no steps to inform herself about the law. She was physically and mentally able to instruct counsel.
The municipality had been prejudiced by the lack of notice. There is a presumption of prejudice where notice has not been provided and the plaintiff bears the onus of showing there was no prejudice. She failed to do so. Neither she nor the municipality had photos or measurements of the road, the condition of the road had changed materially since the accident and the municipality had lost the opportunity to interview witnesses. As a result, summary judgment was granted.
Argue is a useful summary of the relevant authorities relating to s. 44(12). Those defending municipal claims with notice issues should consider whether it would be useful to bring a summary judgment motion in the circumstances.
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