Statutory Third Party Must Answer Questions About Denial of Coverage

A recent decision requires a statutory third party to answer questions about why it denied coverage to its insured.  In Lica v. Dhaliwal, 2015 ONSC 3888 (S.C.J.), State Farm denied coverage and added itself as a statutory third party.  The plaintiff asked questions by written interrogatory requesting details as to why the insurer denied coverage.  State Farm refused to answer and the plaintiff brought a motion, arguing he needed the information in order for him to claim underinsurance coverage from his own insurer under the OPCF 44R and to permit his insurer to assess its potential liability.  State Farm argued that the main action was not the proper forum to decide coverage issues so the questions were improper.

Justice Price ordered State Farm to provide details of the denial of coverage.  A court requires the information to determine whether State Farm's allegation the insured breached the conditions of his policy are borne out by the evidence.  If the denial was justified, the plaintiff would have access to the coverage provided by his OPCF 44R endorsement.  Justice Price held that where coverage has been denied, the court should determine whether an insurer must disclose the information and documents relating to its decision on a case by case basis, having regard to whether the documents are relevant, whether their disclosure would cause prejudice, whether they are protected by litigation privilege and whether that privilege, if it exists, has been waived.

Statutory Third Parties will have to carefully consider what must be disclosed as a result of the Lica decision.

No Duty to Defend Parents of Alleged Bully

The Court of Appeal has held that an insurer does not have a duty to defend its insureds with respect to claims that they failed to prevent bullying.

In Unifund v. D.E., 2015 ONCA 423 (C.A.), the insurer refused to defend parents of an alleged bully.  In the underlying action, the plaintiff alleged that the parents' daughter had bullied her at school.  The allegations against the parents were that they knew or ought to have known about the bullying, and failed to investigate it, take steps to prevent it or take disciplinary action. The Unifund policy contained an exclusion which provided as follows:

We do not insure claims arising from:

6. bodily injury or property damage caused by an intentional or criminal act or failure to act by:

(a) any person insured by this policy; or

(b) any other person at the direction of any person insured by this policy;

7.(a) sexual, physical, psychological or emotional abuse, molestation or harassment, including corporal punishment by, at the direction of, or with the knowledge of any person insured by this policy; or

(b) failure of any person insured by this policy to take steps to prevent sexual, physical, psychological or emotional abuse, molestation or harassment or corporal punishment.

The application judge held that the exclusion was limited to an intentional failure to prevent physical abuse rather than negligence.  The Court of Appeal allowed the appeal.  Justice MacPherson held that by using the word "failure" in the exclusion clause, it extended to negligence.  Unifund had no duty to defend or indemnify its insureds in the underlying action.

Courts Have Inherent Jurisdiction to Order Assessments by Non-Health Practitioners

We previously posted on the Divisional Court's decision in Ziebenhaus v.Bahlieda (click here for our original post).  In that case, the Divisional Court held that courts have inherent jurisdiction to order a party to undergo an assessment by someone who is not a "health practitioner".  In Ziebenhaus, the particular assessor was a vocational assessor.

The Court of Appeal has now confirmed the Divisional Court's decision at 2015 ONCA 471 (C.A.).
It held:

[13]      The language of s. 105 and Rule 33 does not constitute such clear and precise language. The language of these provisions is permissive, and they do not state that a court cannot order an examination by someone who is not a “health practitioner”. Moreover, the conclusion that a superior court judge has the inherent jurisdiction to order such an examination does not conflict with the relief available under s. 105, nor should it be seen as extending the reach of that section. Inherent jurisdiction should be exercised only sparingly and in clear cases, when the moving party demonstrates that it is necessary to ensure justice and fairness.

Ziebenhaus may make it easier to obtain orders compelling plaintiffs to attend independent medical examinations with non-medical practitioners; however, it will still be important to have good supporting materials to show the assessments are necessary to ensure justice and fairness.

Admissibility of Expert Evidence

The Supreme Court of Canada recently commented on the standards for admissibility of expert evidence.  Although the case originated out of Nova Scotia, it is equally applicable to Ontario and should be taken into account when retaining experts. 

In White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 S.C.C. 23,  shareholders started an action against the company's former auditors after a different accounting firm (Grant Thornton) identified problems with the former auditors' work.  In response to the defendant's summary judgment motion, the plaintiffs hired a forensic accountant from Grant Thornton to prepare an opinion.  The motions judge struck out the forensic accountant's affidavit on the basis that she was not an impartial witness; the Court of Appeal allowed the appeal.

The Supreme Court of Canada dismissed the appeal.

The inquiry for determining the admissibility of expert evidence is divided into two steps.  First, the proponent of the evidence must establish the threshold requirements for admissibility (found in R. v. Mohan): relevance, necessity, absence of an exclusionary rule and a properly qualified expert.  Second, the judge must exercise a gatekeeper function and balance the potential risks and benefits of admitting the evidence to determine whether the potential benefits outweigh the risks. Concerns about an expert's independence or impartiality should be considered as part of the overall weighing of the costs and benefits of admitting the evidence.

Expert witnesses have a special duty to the court to provide fair, objective and non-partisan assistance. Underlying the duty are three concepts: impartiality, independence and absence of bias.  The expert's opinion must be impartial in the sense that it reflects an objective assessment of the questions at hand.  It must be independent in that it is the product of the expert's independent judgment, uninfluenced by who has retained him or her or the outcome of the litigation.  It must be unbiased in that it does not unfairly favour one party's position over another.

A proposed expert's independence and impartiality goes to admissibility and not simply to weight, and there is a threshold admissibility requirement in relation to this duty.  Once the threshold is met, remaining concerns about the expert's compliance with his or her duty should be considered as part of the overall cost-benefit analysis the judge conducts to carry out the gatekeeping role.

In the circumstances, the evidence should not have been excluded as there was no basis to conclude the expert was not able and willing to provide the court with fair, objective and non-partisan evidence.

Jury Can Hear Cases Involving Waivers & Volenti

The Court of Appeal has confirmed that juries can hear cases involving waivers.

In Kempf v. Nguyen, 2015 ONCA 114 (C.A.), the plaintiff suffered injuries when the defendant's back wheel clipped his front wheel during a charity bike ride.  The defendant pled volenti and that the plaintiff was contributory negligence, and relied on a waiver signed by the plaintiff.

The trial judge granted the plaintiff's motion to strike the jury notice on the basis that the jury would be confused by the contents of the waiver or misuse it in their deliberations.  She was concerned that the plea of volenti involved a claim for declaratory relief, which is precluded from being determined by a jury.  She also rejected the defendant's suggestion to take a "wait and see" approach.  She struck the jury and found in favour of the plaintiff.

The Court of Appeal allowed the defendant's appeal, holding that it was a reversible error to discharge the jury on the basis that it would be too difficult to explain the law.  Volenti is not a claim for declaratory relief; it is a full defence to a finding of negligence.  Justice Epstein held that "To determine liability, the jury would have to sift through the often conflicting evidence, and make findings of fact and apply the law as explained to them by the trial judge.  This is what juries do every day" (para. 59).

Kempf is helpful in confirming that the right to a jury is an important one, and that juries are capable of hearing a wide variety of cases, including those involving contracts or waivers.

Intrusion Upon Seclusion

One of the more recent torts that has been developing is the tort of intrusion upon seclusion.  The Court of Appeal recently commented on this developing tort. 

In Hopkins v. Kay, 2015 ONCA 112 (C.A.), the plaintiffs brought a proposed class action alleging that their records as patients of the Peterborough Regional Health Centre were improperly accessed.

The hospital brought a r. 21 motion to dismiss the claim on the ground that the Personal Health Information Protection Act ("PHIPA") is an exhaustive code that ousts the jurisdiction of the Superior Court to entertain any common law claim for invasion of privacy rights in relation to patient records.  The motions judge dismissed the motion and the hospital appealed.

The Court of Appeal held that PHIPA is not an exhaustive code, and the plaintiffs were not precluded from asserting a common law claim for intrusion upon seclusion.  There is no express intention in PHIPA to create an exhaustive code and it contemplates other proceedings.  The commissioner has no power to award damages so an individual must commence an action in the Superior Court to seek damages.  PHIPA is tailored to deal with systemic issues rather than individual complaints. 

The Court of Appeal dismissed the appeal.

The Importance of Credibility in Threshold Motions

When a defendant brings a threshold motion at the end of trial, the plaintiff bears the onus of proving his injuries meet substantially interfere with work or activities of daily living.  As a result, the plaintiff's credibility can be highly relevant.  One such example is Berfi v. Muthusamy, 2015 ONSC 981 (S.C.J.). 

The plaintiff brought an action as a result of a pedestrian-motor vehicle accident that occurred on October 28, 2010.  The jury found the defendant 80% at fault and the plaintiff 20%, and awarded $43,000 in general damages, $6,000 for past loss of income and nil for future loss of income.  The defendant brought a threshold motion.  The plaintiff alleged he sustained injuries to his left shoulder, arm and hand.  He continued to work full time, apart from a 17-day period following surgery.  He testified he did so in order to reach age 55 when he could retire and receive a union pension.  His anticipated retirement date was March 1, 2015.

After the plaintiff testified, counsel received the union file which included a Notice of Election form which indicated he planned on returning to work in April 2015.  A union representative testified the plaintiff contacted her the day before to withdraw the Notice of Election.

Stinson J. held the plaintiff had not met threshold.  There were a number of conflicts in the plaintiff's testimony, and he had continued to work in the same job for four years after the accident; Stinson J. described this factor as a "strong indication" the injuries had not substantially interfered with the plaintiff's ability to continue his regular employment.  In addition, the award of zero for future income loss was consistent with the jury finding the plaintiff was capable of working.  Finally, Stinson J. held that the limitations the plaintiff had with respect to household chores, and social and sporting activities were related to problems that pre-dated the accident.

The defendant's motion was granted.