Renter’s Insurer is First to Respond, Even if Only a Third Party

A recent decision of the Ontario Superior Court of Justice provides guidance as to whose insurer must respond first to a plaintiff’s claim in motor vehicle accidents involving rented or leased automobiles.

In Elias v. Koochek, 2014 ONSC No. 5003 (S.C.J.), the Court heard a motion involving a rental car accident. The passengers of the car brought a lawsuit naming the uninsured driver of the car (Koochek) and the owner of the car (Aviscar) as defendants. Aviscar then brought a third party claim against the renter of the car (Moshe). The court was asked to determine whether the renter’s insurer was required to respond first to the plaintiff’s claim.

In order to answer this question the court looked to section 277(1.1) of the Insurance Act and the corresponding provisions of the Ontario Automobile Policy. Section 277(1.1) provides for the priority in which available insurance policies are to respond to liability from the ownership or operation of a leased (rented) automobile. It states that the lessee’s (renter’s) policy is to respond first, followed by the driver’s policy and then the owner’s policy. This is an exception to the general rule in motor vehicle accidents that the owner’s policy is to respond first.

The renter argued that his insurance was not “available” because he was not named as a defendant in the main action. The court disagreed, and stated that making the availability of the renter’s policy dependant on whether the renter was named as a defendant or a third party would lead to inconsistent results and subvert the legislative intent behind section 277(1.1). The court said that while a claim does need to be made against the renter in order to trigger the availability of their insurance under 277(1.1), the procedural manner of pleading by which this claim is made is not relevant.

As such, the court found that the renter’s insurer did need to respond first to the plaintiff’s claim.

Changes to the Rules of Civil Procedure

The Rules of Civil Procedure are being amended as of January 1, 2015.  Included in the amendments are changes to r. 48.

Currently, r. 48.14 provides that if an action has not been placed on the trial list within two years after the first defence is filed, the Registrar will issue a status notice providing that the action will be dismissed in 90 days.

The new rule provides that the Registrar shall dismiss the action for delay if:

(a) The action has not been set down or terminated by the later of five years after its commencement or January 1, 2017; or
(b) The action was struck from the trial list and has not been restored to the trial list by the later of  two years of being struck or January 1, 2017.

If a status hearing was scheduled before January 1, 2015, the old rule continues to apply.

These amendments will likely help to avoid many motions that were necessary to either avoid a dismissal or to set aside an administrative dismissal.

City Not Liable for Icy Boulevard

In 2013, we blogged on a decision by Justice Gorman dismissing a claim where the plaintiff fell on a sloped boulevard between the street and the sidewalk, Bondy v. London.  The link to the blog post can be found here.  The plaintiff appealed the decision.

The Court of Appeal dismissed the appeal, at 2014 ONCA 291 (C.A.).  The parties agreed that the boulevard was a "highway" within the meaning of the Municipal Act.  The Court of Appeal held that the highest standard to which the area needed to be maintained was as a highway for vehicles, not as a passageway for pedestrian traffic. 

The plaintiff argued on appeal that because from time to time people cross the road in the middle between intersections, it creates a special circumstance that elevates the standard of maintenance.  The Court of Appeal disagreed, holding that "The fact that people may cross at undesignated places on a road does not create or impose on the Municipality a higher level of maintenance obligation."  There were also no special circumstances that created an obligation on the adjacent property owner to maintain the boulevard.

Municipal Toboganning Case Dismissed

The Municipality of Leamington recently successfully defended a case where the plaintiff alleged she was injured tobogganing.  In De Cou v. Leamington, 2014 ONSC 6044 (S.C.J.), the plaintiff was injured while sledding down a hill in a park run by Leamington.  Although the Town was aware that people used the hill, there had been no complaints about it.  The plaintiff was 29 years old and had been sledding on the hill since she was 5.  The Town did not maintain the park in the winter.

Justice Carey held that there was no breach of the duty of care.  The plaintiff willingly assumed the risk.  Justice Carey held that "Going down a snow covered hill in February  on a light piece of material (be it plastic, cardboard, Styrofoam or wood) is a typical Canadian winter experience.  Falling off a sled is also part of that experience."  There was no causal link between the Town's failure to supervise or inspect the hill and the plaintiff's injuries.  The case was dismissed.

Court of Appeal Upholds $1.1 Million Jury Award

The Court of Appeal has upheld a $1.1 million damages award in a product liability case heard by a jury.

In Stilwell v. World Kitchen, 2014 ONCA 770 (C.A.), the plaintiff injured his hand when a glass pot broke while he was cleaning it.  The jury found the defendant 75% at fault and the plaintiff 25%.  Particulars of negligence included not identifying when the customer should contact the manufacturer and the warning on the box being inadequate. The jury assessed damages at $1,132,850 including $25,000 in aggravated damages.

The Court of Appeal upheld the award except for the aggravated damages.  It held that the standard of review of a jury verdict is "exceptionally high" and a jury's verdict should only be set aside where it is so plainly unreasonable and unjust that no jury reviewing the evidence as a whole and acting judicially could have arrived at the verdict.  Additionally, a jury's verdict is entitled to a fair and liberal interpretation in light of the evidence and the circumstances.  In the circumstances, there was an evidentiary basis for the jury's conclusion.

The aggravated damages award was set aside as the judge failed to advise the jury that, in order to award such damages, they had to be satisfied that any increased injury to the plaintiff had to be a result of particularly reprehensible conduct by the defendant.

This case is a good example of the high threshold a party faces in attempting to overturn a jury verdict.

No Rebuttable Presumption in Section 4 of the Occupier's Liability Act

Section 4 of the Occupier's Liability Act creates a lower standard of care where premises are "recreational trails reasonably marked as such".  A person who enters such premises is deemed to have willingly assumed all risks.  The Divisional Court has confirmed that the purpose of s. 4 is to reduce the duty of care owed by certain occupiers and attempts to thwart the legislation will not be permitted.

In Cotnam v. National Capital Commission, 2014 ONSC 3614 (Div. Ct.), the plaintiff was injured while biking on a recreational pathway.  The Commission brought a motion for summary judgment.  The motions judge dismissed the motion on the basis that there was a rebuttable presumption the plaintiff could advance at trial to dislodge the lower standard of care contained in s. 4. 

The Divisional Court disagreed.  The purpose of s. 4 is to reduce the duty of care owed by occupiers of recreational lands.  If the motion judge's decision was allowed to stand, it would undermine the purpose of s. 4.  Acting in reckless disregard of the presence of a person means "doing or omitting to do something which he or she should recognize as likely to cause damage or injury to the person present on his or her premises and not caring whether such damage or injury result".  There was no evidence the Commission acted in that manner, and in fact, there was evidence the Commission took some steps for the safety of users of the trial.

The Divisional Court allowed the appeal and dismissed the action.

The Importance of Clarity in Making Rule 49 Offers

The law with respect to r. 49 offers is increasingly complicated.  It is important for offers to be clear in order to benefit from the provisions of r. 49.  At the same time, even if an offer does not qualify as a r. 49 offer, it can be taken into consideration when a court is deciding costs.

In Elbakhiet v. Palmer, 2014 ONCA 544 (C.A.), the plaintiffs sought damages of almost $2 million dollars.  After a jury trial, they were awarded $144,013.07.  The plaintiffs made one offer of $600,000 plus costs.  The defendants made two offers, the second of which was $145,000 plus pre-judgment interest in accordance with the Courts of Justice Act plus costs.

One of the issues at the Court of Appeal was whether the defendants obtained a judgment as favourable or less favourable than their offer.  The defendants’ position was that the offer was intended to mean PJI of 5% on the entire offer (which would mean the offer exceeded the judgment).  The trial judge held that it was not clear that there was a uniform practice that 5% would be applied to the entire offer, and different rates of interest could apply to different heads of damages.  She held the defendants had not beat their offer and ordered the defendants to pay costs of almost $580,000.

The Court of Appeal held that there is no evidence of a general understanding that 5% would apply to the entire offer.  At the same time, the trial judge failed to give proper consideration to r. 49.13 which permits the court to exercise discretion and take into account any offers made.  Since the offer to settle was virtually the same as the judgment, the trial judge should have taken r. 49.13 into account.  She erred in failing to do so.

The Court of Appeal held that “it was not fair and reasonable to award the [plaintiffs] costs of almost $580,000 for a claim the jury valued at just under $145,000”.  It allowed the appeal and reduced the costs payable to the plaintiffs to $100,000.