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May 27, 2011

New Look for the Blog

This is the second anniversary of the Ontario Insurance Law Blog and so we have decided to make some minor changes that will hopefully make it more user friendly. We just wanted to let you know that there may be some changes to the look of the blog but the content and purpose will continue the same.

Our goal, as always, is to create a forum for discussing insurance law. The goal is not to provide only case summaries but also to encourage discussion and commentary. We really appreciate receiving your feedback. If you have a comment to make, please email us and (with your permission) we will post your comment to the blog for others to read.

Best regards!

John Norton and Tara Pollitt

May 25, 2011

Revival of the Special Circumstances Doctrine?

Has the special circumstances doctrine been revived for limitation periods? We thought the Courts have been clear that under the new statute of limitations there is no exception for special circumstances. However, Wood J. recently held that special circumstances applied and granted an extension of time. In the case the plaintiff was trying to add defendants who were already third and fourth parties. Perhaps the exception will apply then only to when third and fourth parties are being added as defendants?

The case of Chodowski v. Huntsville Professional Building Inc., [2010] O.J. No. 3773, looks at the issue of joining parties after limitation periods have expired. In Chodowski, the motion is the result of plaintiff’s counsel, who had brought a timely motion seeking leave to join the third and fourth parties as defendants. It was not until the newly retained plaintiff’s counsel set the matter down for trial, that the omission was realized.
Justice T.M. Wood held that the test to be applied is a two part one in which the moving party must first satisfy the court that “no prejudice would result that cannot be compensated for by costs or an adjournment”. The second part, having been developed through the case law, requires that where a limitation period has expired, the moving party must demonstrate “special circumstances” which would justify extending the limitation period.

Justice Wood wrote that:

[I]t must be remembered that both defendants have been aware of their exposure since the day after the incident. Both were aware of the order allowing them to be joined as defendants in the main action, and both participated fully in discoveries as third and fourth parties.

The Judge found that plaintiff’s counsel’s prompt move for leave to amend, and the fact that plaintiff’s first counsel was a generalist “whose practice was not attuned to the requirements of tort litigation”, lends credibility to the argument that this was a sin of omission rather than commission.

The Court found that the failure to join the defendants in a timely fashion was fully explained.

Wood J. held that: The conduct of the proceedings as a whole and the nature of the mistake in that context are in my view special circumstances sufficient when coupled with the lack of real prejudice to the defendants, to justify an extension of time to issue and serve a new statement of claim on the defendant number company and Mid-North to March 1, 2010, the date of service.

Thanks to Alex Lacko for reviewing this case.

May 16, 2011

Public Transit

This blog was prepared by Jennifer Stirton.

The Insurance Act has been amended by Bill 173, the Better Tomorrow for Ontario Act (Budget Measures), 2011, which received Royal Assent on May 12, 2011.

The amendments relate to incidents involving public transit and make two major changes. First, owners and drivers of public transit vehicles are not protected by subsections 267.5(1), (3) and (5) of the Insurance Act, which provide threshold protections and limit income loss claims, if the public transit vehicle does not collide with another automobile or any other object in the incident. In other words, public transit drivers and owners are not protected defendants unless there is a collision. The second major change is the addition of subsection 268(1.1), which provides that occupants of public transit vehicles who are injured are not entitled to statutory accident benefits if the public transit vehicle does not collide with another automobile or any other object.

These changes are clearly aimed at passengers who allege injury arising from incidents that do not involve collisions, such as sudden start/sudden stop claims. While it will reduce the cost of accident benefits being paid, it may result in an increase in tort actions against defendants who are no longer entitled to statutory protections.

May 11, 2011

Rule 53.03 does not Apply to Accident Benefits Assessors - Beasley not Followed

You may recall that we blogged about Justice Moore's decision in Beasley v. Barrand, which held that accident benefits assessors could not testify as they had not complied with the new r. 53 pertaining to experts. A new decision was released on April 26, 2011 which refused to follow Beasley.

In McNeill v. Filthaut, 2011 ONSC 265 (S.C.J.), the defendants sought to call DAC assessors to testify at trial. The plaintiff objected on the basis that they had not provided r. 53.03 compliant reports.

Justice MacLeod-Beliveau held that r. 53.03 does not apply to individuals retained by non-parties to the litigation.

Justice MacLeod-Beliveau held that since r. 4.1.01 (acknowledgment of expert's duty) refers to experts "engaged by a party", it does not apply to experts retained by non-parties, such as accident benefits assessors. Interpreting the rules otherwise potentially deprives the Court of relevant evidence.

There are now two different lines of decisions regarding the testimony of non-party experts. It will be necessary for the Court of Appeal to clarify this important area of the law.

May 3, 2011

Costs to Unrepresented Litigant

Mustang Investigations v. Ironside et al, 2010 ONSC 3444 (Div. Ct).

Thanks to Alex Lacko, articling student, for preparing this case summary.

The plaintiff appealed from a costs order in which the motion judge awarded the self-represented defendant a counsel fee of $20,000 on the basis that he had done work ordinarily done by a lawyer.

The parties made written submissions as to costs. Mustang submitted that Ironside should receive costs limited to disbursements in a net amount of $1,541. Ironside delivered two bills of costs, the larger one for $208,138.40, inclusive of disbursements. The motion judge disallowed $87,500 claimed by Ironside as being not a proper claim for costs. The motion judge then considered the leading authority on costs to be awarded to unrepresented litigants, Fong v. Chan (1999), 46 O.R. (3d) 330, (C.A.). The motion judge correctly set forth the two principles enunciated by Sharpe J.A. and the Court of Appeal in that case in the following language:

First, the self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case. Second, costs should only be awarded to those litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation and that, as a result, they incurred an opportunity cost by foregoing remunerative activity.

The motion judge interpreted the second principle as requiring a self-represented litigant to simply show that he or she did work ordinarily done by a lawyer without any reference to incurring an opportunity cost by foregoing remunerative activity.

The issue on appeal was whether the motion judge applied the correct principles for awarding costs to a self-represented litigant.

Jennings J. delivered the judgment of the Divisional Court and found that a number of cases, while purporting to apply Fong, in fact introduced a “spin” on Sharpe J.A.’s proviso to the second principle which he found troubling.

Jennings J. found that the motion judge erred by ignoring the proviso regarding an opportunity cost and further, awarding the self-represented litigant the partial indemnity costs that the plaintiff could reasonably be expected to have paid to a lawyer had one been retained by Ironside.

Justice Jennings stated that the language used by Sharpe J.A. was clear and that in order to receive costs, a lay litigant must demonstrate (1) that he or she devoted time and effort to do the work ordinarily done by a lawyer, and (2) that as a result, the litigant incurred an opportunity cost by foregoing remunerative activity. He further stated that if an opportunity cost is proved, a self-represented litigant should only receive a moderate or reasonable allowance for the loss of time devoted to preparing and presenting the case.

Several trial judges as well as a master, seem to have interpreted Fong as saying that even in the absence of proof of an opportunity cost, one may assume that because the lay person was involved in the litigation preparing material that might otherwise be prepared by a lawyer, he or she should nevertheless be entitled to nominal costs. Jennings J. wrote that:

“With great respect to the master and those judges, I’m unable to find that the language in Fong permits an award to be made without the self-represented litigant demonstrating that, as a result of the lawyer-like work put in on the file, remunerative activity was foregone. Simply stated, no proof of opportunity cost, no nominal costs available.”

Jennings J. further stated that in the case that an injustice will result, he had two responses:

(1) It is difficult to see any injustices in compensating someone for a loss not incurred; and

(2) Regardless, the principle of stare decisis does not permit this court, or judges sitting in motions, or masters, to modify a decision of the Court of Appeal.

The appeal was allowed and the award of $20,000 for counsel fee on a partial indemnity basis was set aside.