Plaintiff entitled to coverage despite driving with expired licence

Sometimes even when you win, you lose.

We previously blogged on Kozel v. Personal Insurance Co.  A copy of our previous post is found here.  In that case, the respondent was in an accident while driving with an expired licence.  She claimed she received her licence renewal documents in the mail and gave them to a dealership when she took delivery of a new automobile.  The applications judge held that the insured exercised reasonable diligence and was entitled to a defence.  He also held that she was not entitled to relief from forfeiture because holding a valid licence is a condition precedent of the policy.

The Court of Appeal reversed the judge on the issue of due diligence but held that the respondent was entitled to relief from forfeiture.

The offence of driving without a valid licence is one of strict liability for which a defence of due diligence is available.  An individual can make out the defence if s/he can show a reasonable misapprehension of facts or reasonable care with respect to the offence with which she can charged.  The Court held that Ms. Kozel was not able to show she acted with reasonable care - although she had renewed her licence for 60 years on time, this time she did nothing else to inquire about or even consider her renewal.  There was no due diligence and the appeal was allowed on that issue.

However, the Court held that the plaintiff was entitled to relief from forfeiture.  The analysis looks at three factors: the applicant's conduct, the gravity of the breach and the disparity between the value of the property forfeited and the damage caused by the breach.  The Court held that Ms. Kozek acted in good faith and the breach was relatively minor.  In addition, the disparity was enormous as Kozek stood to lose $1,000,000 in insurance coverage while there was "no prejudice to the insurance company".  The Court held she was entitled to relief from forfeiture.

One has to wonder how much the specific facts of this case impacted the ultimate result: what if it wasn't a little old lady?  What if she had a history of driving with an expired licence?  What if the claim was for only $10,000?  It will be interesting to see how this case is applied to future fact situations.

Counsel Should Not Review Draft Expert Reports

A recent trial decision held that counsel should not review draft expert reports.  In Moore v. Getahun, 2014 ONSC 237 (S.C.J.), the plaintiff brought an action against an emergency room physician for negligently applying a cast after he fractured his wrist.

At trial, there were a number of evidentiary issues with respect to expert evidence, including whether it is appropriate for counsel to review draft expert reports and provide input?

Justice Wilson held that it was not proper for counsel to review an expert’s draft report.  If there are changes to a report, there should be disclosure to the other party:

[520]      The purpose of Rule 53.03 of the Rules of Civil Procedure is to ensure the independence and integrity of the expert witness. The expert’s primary duty is to the court. In light of this change in the role of the expert witness under the new rule, I conclude that counsel’s practice of reviewing draft reports should stop. There should be full disclosure in writing of any changes to an expert’s final report as a result of counsel’s corrections, suggestions, or clarifications, to ensure transparency in the process and to ensure that the expert witness is neutral.

Counsel should review the Moore decision as it potentially has repercussions for the way that counsel interact with experts in the future.  One has to wonder whether the Rule Committee intended r. 53 to be interpreted so broadly.

Claim for Contribution and Indemnity for Negligent Supervision Not Caught by Exclusion Clause

The Court of Appeal recently held that an insurer was obligated to defend a homeowner against a Third Party Claim alleging she failed to supervise her own daughter.


In Bawden v. Wawanesa Mutual Insurance Company, 2013 ONCA 717 (C.A.), eight year old Kelly Bawden was struck and injured by a motor vehicle driven by Joyce Wilson and owned by Randal Wilson in August 2003.

Kelly’s mother, Elizabeth Bawden, sued the Wilsons in her capacity as litigation guardian seeking damages on Kelly’s behalf. The Wilsons brought a third party claim against Elizabeth Bawden and Kelly’s father, David Bawden, claiming contribution and indemnity for failing to properly instruct and supervise their daughter.

The Bawdens held a homeowners’ insurance policy issued by Wawanesa Mutual Insurance Company. Wawanesa declined to defend them on the third party claim. The Bawdens brought an application for coverage. The application judge found in favour of the Bawdens. Wawanesa appealed to the Ontario Court of Appeal.

The critical coverage provision in the policy stated:

                You are insured for claims made or actions brought against you for:

1. personal Liability: bodily injury or property damage ­arising out of your personal activities anywhere in the world. [Emphasis added]

Exclusions: you are not insured for claims made or actions brought against you for…

1. bodily injury to you or to any person residing in your household other than a residence employee. [Emphasis added]

Wawanesa argued that the exclusion clause removed all claims for bodily injury by the insured and those residing in their household. The Court of Appeal disagreed and the appeal was dismissed. 

The Court held that the coverage provision must be interpreted broadly and therefore clearly encompasses the third party claim which arises out of the insureds’ personal activities in negligently failing to supervise their daughter. 

Further, the Court held that the exclusion clause must be read narrowly. It cannot encompass the third party claim which is not a claim on behalf of Kelly for her injury, but a claim by the Wilsons against the Bawdens for contribution and indemnity.

Lastly, the Court considered the policy objectives of the exclusion clause. The exclusion clause removes from coverage those claims that raise a risk of collusion between family members. This risk is not present in this case in which the Wilsons have brought a third party claim against the insureds. 

Limitations periods for claims of negligent supervision allowing sexual assaults to occur

Choc v. Hudbay Minerals Inc., [2013] O.J. No. 3375 (S.C.J.) is a case that may be of interest to institutional defendants of sexual assault claims.

In this action the plaintiffs, who are indigenous Mayan Q’eqchi’ from Guatemala, brought three related actions against the Canadian mining company, Hudbay Minerals and its subsidiaries.  The plaintiffs allege that security personnel working for Hudbay’s subsidiaries committed a number of abuses including a shooting, a killing and gang rapes during the forced removal of the plaintiffs from areas claimed as ancestral homelands.    

This decision is in respect of motions brought by the defendants, Hudbay Minerals, HMI Nickel and CGN with respect to three related actions by the plaintiffs.  One motion sought the dismissal of one of the actions on the basis that it was statute-barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B [“Limitations Act”].  The action sought to be dismissed was brought by 11 women who asserted they were each gang-raped by mining company security personnel during their forced removal on January 17, 2007.  The action was not commenced until March 28, 2011, more than 4 years later.

The defendants argue that the basic limitation period, of two years after the day on which the claim is discovered, pursuant to section 4 of the Limitations Act, is applicable.  The defendants contend that the plaintiffs’ claim is not based on assault or sexual assault but is framed in negligence based on the alleged failure of Hudbay to supervise employees and agents of its subsidiaries.  They argue there is no issue of discoverability and the plaintiffs knew of the alleged claims as of January 17, 2007.   

The plaintiffs argue that section 10 of the Limitations Act which provides an exception to the two year limitation period for claims based on an assault or sexual assault is applicable.  If the claim falls within the scope of section 10, then the limitation period will not have started running because the plaintiffs will be presumed to have been incapable of commencing the proceeding, unless the contrary is proven. 

The motions judge held that section 10 was applicable in the circumstances of the case as the claim is based on alleged sexual assaults.  Although the claim was based in negligence for the defendants’ failure to properly supervise and train their personnel, ultimately, without the sexual assault there would not have been a claim.  The sexual assault was “the main ingredient of the cause of action of negligence”.  As such the claim properly fell within the scope of s. 10 of the Limitations Act.

Counsel should be aware that even if a claim is framed in negligence, the standard two year limitation period may not apply.  Rather, the offence giving rise to the action may put the claim into one of the exceptions.