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March 26, 2014

Action Against Municipality for Failing to Repair Potholes Dismissed

Justice Leach has conducted a thorough review of the standard of care for a municipality as it relates to potholes in the decision of McLeod v. General Motors of Canada, 2014 ONSC 134 (S.C.J.).  In McLeod, the action against a rural municipality was dismissed.

Ms. McLeod was injured on September 18, 2004 on a rural gravel road in Dutton-Dunwich.  She lived on the road and had been coming home from a nearby social gathering on the night of the accident.  The plaintiff alleged she was surprised by the headlights of an oncoming vehicle, and lost control of her vehicle due to potholes on the road.  The plaintiff called lay witnesses who felt the potholes never improved and were always present.  A number of witnesses alleged they complained to the municipality and wanted the road to be paved.

Justice Leach held that the road was not in a state of disrepair.  Gravel roads are inherently dynamic.  The presence of loose stone near the edges of the road would not be unusual, dangerous or unreasonable in the circumstances.  There were eight potholes with diameters of 6"-12", none of which was deeper than 2".  The condition of the road was reasonable in the circumstances, having regard to the rural nature of the township, the number of similar roads within the municipality's jurisdiction, the municipality's limited resources, the road's low traffic volume, and the obvious nature of the road's surface, alignment and elevations.

Even if he had held the road was in a state of disrepair, Justice Leach would have held the municipality was entitled to rely on the statutory defences set out in s. 44(3) of the Municipal Act.  Firstly, the municipality had no knowledge of a defect.  Although complaints were allegedly made, they were informal (such as in coffee shops) and vague or general.  Secondly, the municipality took reasonable steps to prevent the default from arising as it had a regular system of grading.  Thirdly, the municipality met the Minimum Maintenance Standards for inspection and pothole repair.

Although it is a lengthy decision, McLeod is a worthwhile read for those defending municipal claims. 


March 12, 2014

Requests to Admit Can Be Reviewed on an Interlocutory Basis

Can the validity of responses to a Request to Admit be reviewed on an interlocutory basis?  Yes, according to a recent motion decision.

In Glover v. Gorski, 2013 ONSC 6578 (S.C.J.), the minor plaintiff was struck by a Waste Management truck while crossing a highway.  The defendants served a Request to Admit prior to disclosure and discoveries.  The plaintiffs made a global refusal, "to admit the truth of the facts...on the basis that the truth or falsity of the facts alleged is not entirely clear, calls for a conclusion to be determined by the trier of fact or the statement(s) alleged is vague".  The defendants brought a motion to compel the plaintiff to provide answers.  One issue was whether a motions judge could make an Order or whether the matter must be left to a trial judge.

Justice Gauthier held that a Request to Admit can be reviewed on an interlocutory basis.  She held that the plaintiffs' blanket refusal and reasons offered for the refusal were not responsive, and ordered they deliver a Response within 20 days.

A Request to Admit is most often served prior to trial to narrow down issues, but Glover shows that it can also be useful at earlier stages of the litigation to narrow issues.

March 5, 2014

“The Cruel World of Claims-made-and-reported Policies of Insurance”

Those are the words of Justice Quinn of the Ontario Superior Court of Justice in Certain Underwritersat Lloyd’s of London v. All Spec Home Inspections et al., 2013 ONSC 7149.

In this case the respondent was a self-employed home inspector who had a professional liability insurance policy through the Applicant which was renewed annually.
The respondent carried out an inspection in July 2010 at the Swallow residence and produced a report and photographs. On August 16, 2010 Paul Mambella was performing work in the attic of the Swallow residence when he came into contact with an exposed, energized and bare copper wire. He was electrocuted and died. A Ministry of Labour investigation ensued immediately in which the respondent was involved.

In August 2010 the respondent’s insurance policy came up for renewal. The Application contained the following questions which he answered “no” to:

22.             In the last five (5) years, has a claim ever been made against the applicant?

If YES, please provide the following details...

23.             Is the applicant aware of any situation or circumstance which may in the future result in a claim…

Below these questions the following exclusion appeared:

Without limitation of any other remedy available to the insurer, it is hereby agreed that if there be knowledge of any such fact, circumstance or situation, any claim or action subsequently emanating therefrom is excluded from coverage under the proposed insurance.

The Ministry of Labour conducted an inquest in late August 2011. On September 10, 2011 the respondent submitted a renewal Application and again answered “no” to the above questions.

In November 2011 the widow and children of Mambella commenced an action. After consulting a lawyer the respondent notified the applicant. The applicant brought this coverage Application.

The Policy is a claims-made-and-reported insurance policy.  The applicant argued that it relied on the representations made by the respondent in the application in renewing the policy. It further argued that the policy excluded coverage in the circumstances and the exclusion is clear and unambigious and thus results in there being no coverage available to the respondent.

 Citing the Ontario Court of Appeal in Fellowes, McNeil v. Kansa General International Insurance Company Ltd. et al., 2000 CanLII 22279, Justice Quinn held that the test whether a situation or circumstance should be reported to an insurer, as being one which may in the future result in a claim, is an objective test. The Ministry of Labour investigation and inquest “called out for notice” by the respondent to the applicant.
The court went onto consider how the existence of an exclusion affects the availability of relief from forfeiture under section 98 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The applicant’s argument was accepted that relief from forfeiture is unavailable where a claim falls outside of the coverage due to the operation of an exclusion.   

Justice Quinn ruled in favour of the applicant denying coverage.