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December 2, 2015

Limitation Periods in Actions Against Police

The Court of Appeal recently upheld a motions court judge's decision granting summary judgment in an action against police based on an expired limitation period .

In Cassidy v. Belleville, 2015 ONCA 794, the plaintiff alleged she was stopped by police in August 2009, who informed her she was driving a stolen vehicle and confiscated the car, forcing her to walk home.  She alleged she was pregnant at the time and the incident caused medical complications. She wrote to a lawyer six days after the incident asking whether she should commence a civil action but did not pursue a lawsuit at that time.  Approximately one month later (September 2009), she made a complaint to the Belleville Police and received a reply in June 2011. The complaint was partially upheld in November 2012.  The plaintiff waited until October 2013 before commencing her action, four years after the incident.  She argued she did not discover her claim until after the complaint was upheld as she was unaware of the standard of care until that time.

The motions judge disagreed, as did the Court of Appeal.  Section 5(2) of the Limitations Act provides a presumption that the limitation period begins to run the date of the incident unless the contrary is proven and there was nothing to rebut the presumption.  Expert evidence was not needed to discover the claim; the plaintiff was aware of the offending conduct, the identity of the offender and the nature of her injuries from the time of the incident.  The results of the complaint investigation may have provided additional information but were not necessary to trigger the limitation period.

Cassidy is of assistance in police actions, but may also extend to other circumstances where plaintiffs have attempted to extend limitation periods by waiting on administrative decisions.

November 25, 2015

Instructing Letter Does Not Have to be Produced in Advance of Examination

One issue that arises periodically in personal injury cases is whether a party must produce counsel's letter of instruction to its expert.  In Nikolakakos v. Hoque, 2015 ONSC 4738 (S.C.J.), Master Graham considered whether the defendant was required to produce the letter of instruction to the plaintiff in advance of the plaintiff attending an independent medical examination.

Master Graham held that the instructing letter does not have to be produced until the party elects to call the expert at trial.  Even after the report is served, the instructing letter does not have to be produced pending the defendant's decision whether to call the expert at trial.  As a result, the defendant did not have to produce the letter of instruction in advance of the independent medical examination.

November 18, 2015

Covenant to Insure Did Not Bar Crossclaim

A recent decision looked at whether a contractor could crossclaim against a subcontractor or whether the crossclaim was barred as a result of the covenant to insure between the parties.  In William Osler Health Centre v Compass Construction Resources Ltd., 2015 ONSC 3959 (S.C.J.), the contractor, Compass, was hired by the plaintiff to do kitchen renovations at the Hospital and subcontracted part of the project to Black Creek.  The contract between the Hospital and Compass contained a covenant to insure which required Compass to obtain all risks property insurance.  The covenant to insure contained reference to the terms and conditions of IBC 4042.  IBC 4042 contains language that defines the “Project Site” as the “property in the course of construction”.
Black Creek argued that under the principle of tort immunity, when one party to a contract covenants to obtain insurance for another party, this signifies an assumption of the risk and the party obtaining the insurance cannot sue the other party for the losses which are insured. Compass accepted that under the principle of tort immunity, it could not crossclaim for damages to the kitchen, but argued that it could maintain a crossclaim for damages to the rest of the hospital. 
The Court found that Compass’ covenant to insure did not extend to the entire Hospital and only covered the Project Site (namely, the kitchen). Thus, the Court held that Compass could crossclaim against Black Creek for damages to the Hospital outside of the kitchen, and was not barred by the covenant to insure.  If Compass’ insurance were intended to cover the entire hospital, the premiums and coverage limits would be much higher and closely resemble that of the Hospital’s; Justice Firestone held that it stood to reason that the covenant to insure only covered the Project Site and not damage done to the entire hospital.

November 11, 2015

Loss Transfer and the Fault Determination Rules

The Court of Appeal recently considered the interplay of the Fault Determination Rules in a loss transfer context.

In State Farm Mutual Automobile Insurance Co. v. Old Republic Insurance Co. of Canada, 2015 ONCA 699 (C.A.), there was a multi-vehicle collision in which a Pepsi truck rear-ended a Dodge, which in turn rear-ended a Nissan.  Old Republic insured the Pepsi truck and State Farm insured the Nissan.  The driver of the Nissan collected accident benefits from State Farm, which in turn sought to be indemnified by Old Republic under the loss transfer provisions of the Insurance Act.  The issue on appeal was whether the Pepsi truck was only responsible for the initial collision with the Dodge or whether it was responsible for the entire chain reaction.

The Court of Appeal held that the Pepsi truck (and its insurer, Old Republic) was 100% responsible only for the collision between it and the Dodge, not the entire chain reaction.    As a result, Old Republic was not required to indemnify State Farm for accident benefits paid to its insured.

The Court's interpretation helps to clarify an area in which there was previously conflicting lines of case law.

November 4, 2015

Supreme Court Dismisses Westerhof Appeal

We previously blogged on Westerhof v. Gee, where the Court of Appeal held that non-party experts such as treating health practitioners may give opinion evidence formed in the course of treatment or based on observations formed outside of the litigation (such as accident benefits assessments).

The case was appealed to the Supreme Court of Canada.  On October 29, 2015, the Supreme Court dismissed the application for leave to appeal.  As a result, non-party experts will continue to be permitted to give opinion evidence without complying with r. 53.03, subject to the court's gatekeeper function.

The companion appeal in Baker v. McCallum was also dismissed.

October 28, 2015

Litigation Insurance Does Not Prevent an Order for Security for Costs

The fact that a plaintiff obtains litigation insurance does not prevent a court from making an order for security for costs.

In Shah v. Loblaw Companies Ltd., 2015 ONSC 5987 (S.C.J.), the plaintiff claimed he slipped and fell on a mat at a grocery store in 2012.  At the time of the incident he was a permanent resident of Canada, but his permanent resident card expired in 2013.  He returned to India and did not returned to Canada.  The defendants brought a motion for security for costs.  In response, the plaintiff secured a Legal Protection Certificate and Indemnity Agreement.  He opposed the motion for security and argued that the insurance plan was sufficient security for the defendants.

The Court rejected the plaintiff's argument.  The policy contained a number of exclusions where the insurance proceeds would not be paid, such as where the plaintiff does not accept his counsel's recommendation to accept an offer to settle, decides to represent himself, fails to attend a defence medical examination, provides materially misleading information and so on.  The defendants had no control over the circumstances and if the policy were cancelled, the defendants would have no security in the event of an adverse costs award against the plaintiff. 

Justice Lemon comments that other judges have considered the existence of insurance as a factor in determining whether security for costs should be awarded, but that the circumstances of the case and terms of the policy should be considered.  It would seem important to obtain production of such a policy in the event that the plaintiff raises such an issue in response to a motion for security for costs.

October 21, 2015

Plaintiffs Who Settle for Less than Tortfeasor's Limits May Not Pursue Underinsured Claims

A claim against an insurer pursuant to the underinsured provisions of the policy has been rejected since the plaintiffs settled against the tortfeasor for less than his limits.

In Kovacevic v. ING Insurance, 2015 ONSC 3415 (S.C.J.), the plaintiffs were injured in 2004 in a motor vehicle accident in Florida.  At the time, the plaintiffs were insured by ING; the policy had a $2 million limit and included the OPCF 44R - Family Protection Endorsement.  The Florida defendant had a policy of insurance with a $1 million limit.  The insurer, Lincoln General, elected to go into a "voluntary solvent run-off" in 2009 which resulted it in ceasing to write new policies but it continued to pay its existing obligations and liabilities.  There was no evidence that Lincoln had become insolvent at the date of the settlement or thereafter.

In 2010 the plaintiffs settled their Florida action for $300,000 without ING's knowledge or consent and then sought to recover under their own policy's underinsured driver provisions.  ING brought a motion for summary judgment.  The plaintiffs argued that settling at less than the policy limits did not disentitle them to recovery under the OPCF 44R.  They also argued that the case was unique as the possibility of Lincoln becoming insolvent meant the limits of the policy were unavailable and a settlement for less than the limits was provident.

Justice MacKenzie granted summary judgment and dismissed the claim.  The plaintiffs were not entitled to settle the Florida action for less than the limits then pursue an underinsured claim.  The claim that Lincoln was not solvent or that the policy limits were not available was not accepted.

October 14, 2015

Strong Position at Mediation Does Not Result in Increased Costs After Trial

Sections 258.6 and 258.6 of the Insurance Act impose an obligation on insurers to settle claims as expeditiously as possible and to participate in mediation.  Failure to do so shall be taken into consideration when a court is awarding costs.

In Ross v. Bacchus, 2015 ONCA 347 (C.A.), the jury awarded the plaintiff $248,000.  The trial judge awarded the plaintiff $217,000 plus HST in costs, including an award of $60,000 on the basis that the insurer failed to comply with ss. 258.5 and 258.6. 

The action was commenced in 2010 and the defendant offered to settle the claim for $40,000 in 2011, although the offer was revoked in 2012.  Three weeks before the trial was scheduled to commence, the plaintiff offered to settle the action for $94,065 plus interest and costs, and requested mediation for the first time.  Defence counsel responded the next day with an offer of $30,001 plus interest and costs, and agreed to attend mediation, but advised that his clients were "not interested in settling this case".  The mediation took place four days before trial.  The trial judge described the insurer's participation in mediation as a "sham" based on counsel's statement.

The Court of Appeal allowed the costs appeal and held that the $60,000 award was not appropriate.  Justice Doherty held that a clear statement of the insurer's intent does not mean it has failed to settle expeditiously or participate in a mediation:

[46]      The costs sanctions in ss. 258.5 and 258.6 can only serve their intended purposes if the facts justify the imposition of those sanctions. An insurer’s statement on the eve of trial that it is not prepared to settle a claim cannot be equated with an insurer’s failure to “attempt to settle the claim as expeditiously as possible.” Nor can an insurer who actually participates in a mediation be declared to have failed to participate simply because the insurer indicated prior to the mediation that it was not prepared to settle the claim. A clear statement of the insurer’s position going into the mediation, even a strong statement, does not preclude meaningful participation in a mediation.
 Although ss. 258.5 and 258.6 make mediation mandatory, it is important to remember that the insurer is still entitled to take strong positions without being subjected to an additional costs penalty.

October 7, 2015

Pre-Judgment Interest in Auto Claims

We previously blogged on Cirillo v. Rizzo, where the Court held that s. 258.3(8.1) of the Insurance Act should be applied retroactively (the section provides that pre-judgment interest should be calculated in accordance with s. 127 of the Courts of Justice Act). 

Perhaps unsurprisingly, another judge has come to the opposite conclusion.  In El-Khodr v. Lackie, 2015 ONSC 4766 (S.C.J), Justice Toscano Roccomo held that s. 258.3(8.1) is substantive law, therefore it cannot be applied retroactively.

Until there is appellate authority on this issue, it may be that the calculation of PJI in motor vehicle actions is a matter for negotiation in settlement discussions.

September 30, 2015

Contracting out of the Insurance Act

Section 263 of the Insurance Act provides that in cases of property damages involving two insured automobiles, the insured is entitled to recover from his or her own insurer.

A recent appeal decision held that although s. 263 precludes tort claims, it permits claims based in contract.

In Hafeez v. Sunaric, 2015 ONSC 4065 (S.C.J.), after a collision in a parking lot, the defendant agreed to pay the plaintiff $15,000 "minus insurance payment".  The vehicle was appraised at $13,500.  The plaintiff was paid $6,500 by his insurer and sought to recover the rest from the defendant pursuant to their contract.  The Small Claims Court judge held the agreement was unenforceable due to s. 263.  The plaintiff appealed.

Justice Perrell allowed the appeal.  The property loss compensation scheme introduced by s. 263 precludes tort claims but does not preclude claims based in contract.

September 23, 2015

Insurer Must Pay for Repairs Associated With Building Code Upgrades

The importance of the wording of exclusion clauses can be seen in Choukair v. Allstate, 2015 ONSC 4989 (S.C.J.).

The Applicant, Choukair, had a Homeowner’s Policy with the respondent, Allstate. On January 20, 2014 there was a total loss fire at Choukair’s residence. As a result, the house had to be rebuilt. Choukair stated that his replacement cost was $450,700.00, plus taxes. Allstate paid Choukair $369,000.00 but refused to pay the balance.

The difference between what Choukair claimed and what Allstate paid related to the increased cost of the rebuild associated with upgrades required as a result of the Building Code, which Allstate stated were excluded by the Insurance Policy.

There was an exclusion clause in the Policy which stated the following:

We do not insure: (5) losses or increased costs of repair or cost of improving or upgrading dwellings or structures due to the operation of any by-law regulating the zoning, demolition, repair or construction of buildings and their related services;

Justice Quigley held that the loss did not result from the operation of a by-law. The increased costs were related to the application of the Building Code, which is categorized as a law and not a by-law.
Allstate therefore had to pay the balance related to increased costs associated with the Building Code upgrades.

Insurers may want to consider the wording of their exclusion clauses as a result.

September 11, 2015

The New Deductibles Under the Insurance Act

The Insurance Act and its regulations have been amended to increase the amount of the deductibles.  As of August 1, 2015, the deductible for non-pecuniary damages is $36,540 (up from $30,000) and for Family Law Act damages it is $18,270 (up from $15,000).  In addition the $100,000 threshold above which the deductible applies has been raised to $121,799 and the $50,000 threshold for Family Law Act damages to $60,899.  The deductibles will be indexed for inflation on January 1st of each year beginning in 2016.

In addition, s. 267.5(9) has been amended to provide that costs are to be determined "with regard" to the effect of the deductible, i.e. costs are now net of the deductible.

August 12, 2015

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.

July 22, 2015

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.

July 15, 2015

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.

July 8, 2015

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.

June 24, 2015

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.

June 17, 2015

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.

June 10, 2015

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.

June 3, 2015

Principles Relating to the Threshold

A helpful discussion of the principles relating to the Insurance Act threshold can be found in Malfara v. Vukojevic, 2015 ONSC 78 (S.C.J.).  The arose out of a 2006 motor vehicle accident.  A jury awarded $7,700 in general damages, $1,326 for past income loss and nil for future loss of income.  Justice Firestone heard a threshold motion while the jury was deliberating.  He held that the plaintiff had not met threshold.

Justice Firestone set out a number of principles with respect to threshold motions, including:

  • the trial judge is not bound by the jury's verdict, but is a factor he or she can consider in determining the threshold motion;
  • "permanent" does not necessarily mean forever until death; a permanent impairment is a weakened condition lasting into the indefinite future without end or limit;
  • "serious" relates to the seriousness of the impairment to the person and not to the injury itself;
  • the degree of the impairment must go beyond tolerable to be serious;
  • it is the effect of the injury and not the type of injury that is the focus of the threshold inquiry.
The evidence was that the plaintiff was 24 years old at the time of the collision and was completing a plumbing apprenticeship.  He alleged he sustained chronic neck and back pain as a result of the accident.  He was off work for 2-3 weeks then returned to his apprenticeship, ultimately becoming a fully licenced plumber.  He currently performs all of his job duties but with pain.  He no longer participates in sporting activities, partly because of his injuries and partly because he is busy.  He continues to cut grass, shovel snow and help in the kitchen, although with pain.

Justice Firestone granted the defendant's motion, stating "I accept that the legislature intended that injured persons in motor vehicle collisions may experience some negative or detrimental impact on their lives without the ability to recover non-pecuniary damages".  The evidence did not support that the injuries and impairments had a significant effect on the plaintiff's enjoyment of life, or that they substantially interfered with his capacity for work or pleasurable activities. The impairments were not serious.

April 29, 2015

Plaintiffs May Provide Corroborating Evidence of Threshold Impairment

The Insurance Act provides that in order to prove they meet threshold, plaintiffs must lead evidence from a qualified physician as well as “adduce evidence that corroborates the change in the function that is alleged to be a permanent serious impairment of an important physical, mental or psychological function.”  The Court of Appeal recently held that plaintiffs may provide such corroboration themselves. 

In Gyorffy v. Drury, 2015 ONCA 31 (C.A.), the plaintiff was in a car accident in November 2003.  The defence brought a threshold motion while the jury was deliberating.  The plaintiff and three physicians testified.  The trial judge ruled the plaintiff's injuries has satisfied the impairment threshold, but held that the plaintiff could not provide the corroborating evidence that ss. 4.2 and 4.3 of Ontario Regulation 461/96 required.  Accordingly, the action was dismissed.

The Divisional Court allowed the appeal, and the Court of Appeal dismissed a further appeal.  It confirmed that a plaintiff can provide corroborating evidence in order to prove he or she meets threshold.  The evidence that has to be corroborated is the physician's, not the plaintiff's.

Given the conclusion in Gyorffy, it is perhaps more important to focus on the quality of the evidence provided by the plaintiff rather than on the need for corroboration.

April 22, 2015

The Calculation of Pre-judgment Interest in Motor Vehicle Claims

On January 1, 2015, s. 258.3(8.1) of the Insurance Act was amended to change the rate at which pre-judgment interest ("PJI") in motor vehicle claims.  A recent Superior Court of Justice decision held that the change is retrospective, meaning it will apply to all motor vehicle claims, regardless of the date of loss.

The effect of the amendment is that the provision in r. 53.10 which sets PJI for non-pecuniary loss at 5% no longer applies.  Accordingly, PJI is to be calculated at the rates set out for each quarter in s. 127(1) of the Courts of Justice Act.

In Cirillo v. Rizzo, 2015 ONSC 2440 (S.C.J.), the plaintiff was in a motor vehicle accident on October 1, 2005.  In January 2015 the plaintiff accepted the defendant's offer of $50,000.  The question was how PJI should be calculated.  The defendant argued the amendment should have retrospective application because it is procedural in nature; the plaintiff argued it should not, as it is substantive in nature.

Justice MacKenzie agreed with the defendant.  Although entitlement to interest is a substantive right, the means by which the entitlement can be quantified are procedural.  As a result, the rates set out in s. 127 applied, which had the effect of reducing PJI from 5% to 4.5%.

Given the low interest rates in recent years, the changes to the way PJI is calculated could have a substantial impact on the amount of interest defendants must pay.

April 8, 2015

The Standard of Care for Grocery Stores

The Court of Appeal has once again confirmed that the standard of care for occupiers is reasonableness, not perfection.

In Saisho v. Loblaw Companies Ltd., 2015 ONCA 172 (C.A.) the elderly plaintiff was hit in 2007 by a customer pushing an overloaded shopping cart.  One customer (Beardy) paid for his purchases and loaded his cart.  His friend, Sakakeep, paid for his purchases independently as he was paying, Beardy loaded Sakakeep's purchases into the same cart.  As they moved toward the exit, Beardy bumped into the plaintiff.  The plaintiff suffered severe injuries and was in hospitalized from the date of the incident to his death in 2010.  The claim was dismissed at trial and the plaintiff appealed, alleging that the store should have had a specific policy on overloaded carts and required cashiers to specifically look to ensure customers did not overload the carts.

The Court of Appealed disagreed.  The store had a general policy to be alert for potentially dangerous activities.  Staff were aware that overloaded carts had the potential to cause injury or harm, and if they saw one, they would intervene.  The Court held that to require a standard specifically addressing the problem of overloaded shopping carts would present a standard of perfection, which is not what the law requires.

The trial judge concluded that it was not reasonable to expect a cashier to look behind her to ensure that two distinct customers were not loading their purchases into one cart.  He concluded it was reasonable for the cashier not to have intervened.   The Court of Appeal upheld the decision, holding that the standard of care is reasonableness in the circumstances, and the store met the standard.

April 1, 2015

Full Costs Awarded to Defendant Where Plaintiff Abandoned Case at Trial

Plaintiffs who make unsubstantiated allegations of fraud may be liable for substantial costs if they later decide to abandon their claim.

In Sienna v. State Farm, 2015 ONSC 786 (S.C.J.), the plaintiff sued her own insurer for failing to pay non-earners benefits.  The Statement of Claim sought $900,000 for punitive and aggravated damages caused by the defendant's bad faith.  It made allegations of "unlawful claims practices" and a "conspiracy" aimed at the plaintiff and other policyholders.  The matter was set for trial commencing January 26, 2015.  On January 14th, the plaintiff advised she was abandoning her case and would call no evidence.

The issue then became costs.  The defendant sought costs on a substantial indemnity basis, arguing the claim was without merit, it made a reasonable offer to settle, and the allegations against it were akin to fraud.  The plaintiff argued the allegations in her Statement of Claim were not outrageous and are commonly plead in accident benefits cases, that the defendant should have brought a motion to strike the allegations, and that the defendant should have ceased its trial preparation after a similar case ruled favourably for another insurer.

Justice Arrell did not accept the plaintiff's arguments.  He did not agree the allegations are common, when there is no foundation or evidence to support them.  They were akin to fraud.  The defendant should not be put to the expense of striking allegations made in the Statement of Claim; on the contrary, the plaintiff should have withdrawn the offensive portions.  There was no merit to the argument the defendant should have ceased trial preparation as the favourable analogous decision was being appealed, and the plaintiff had not abandoned her claim.

Justice Arrell awarded the defendant the total amount of its bill of costs, plus $2,000 for the costs motion, for a total of $35,92.97.

March 27, 2015

Westerhof v. Gee - Expert Testimony

The much anticipated appeal decision in Westerhof v. Gee was released yesterday.  It can be found at 2015 ONCA 0206 (C.A.).  In Westerhof, the trial judge refused to let in evidence on history, diagnosis, and prognosis from medical practitioners who were treating practitioners or non-party experts.

The Court of Appeal overturned the Divisional Court decision, which held that the key factor in determining whether r. 53.03 applies is whether the evidence is fact or opinion.  Instead, the Court held:

[60]     Instead, I conclude that a witness with special skill, knowledge, training, or experience who has not been engaged by or on behalf of a party to the litigation may give opinion evidence for the truth of its contents without complying with rule 53.03 where:
·        the opinion to be given is based on the witness’s observation of or participation in the events at issue; and
·        the witness formed the opinion to be given as part of the ordinary exercise of his or her skill, knowledge, training and experience while observing or participating in such events.
Rule 53.03 does not apply to the opinion evidence of a non-party expert where that person has formed a relevant opinion based on personal observations or examinations relating to the subject matter of the litigation for a purpose other than the litigation.  The court retains its gatekeeper function and may require compliance with r. 53.03 if the expert goes beyond the scope of opinion formed in the course of treatment or observation for purposes outside of the litigation.

Given the decision in Westerhof  it will now be permissible for treating practitioners and accident benefits assessors to testify without complying with r. 53.03.

March 25, 2015

Surveillance Must be Disclosed Before Trial

A recent decision from the Ontario Court of Appeal dealt with the use of surveillance evidence at trial.

In Iannarella v Corbett, 2015 ONCA 110 (C.A.), the plaintiff (Iannarella) had been rear-ended by the defendant (Corbett) and claimed that he had injured his rotator cuff as a result of the incident. Before trial, the defence filmed 130 hours of surveillance video of the plaintiff, but failed to disclose the existence of this surveillance in an affidavit of documents. Nevertheless, the trial judge allowed the defence to play the surveillance video at trial and to cross-examine Iannarella on its contents for the limited purpose of impeaching his credibility.

The jury found that Corbett was not liable for Iannarella’s injury. In the event that Corbett had been found liable, the jury would have awarded Iannarella $32,000 in general damages, $40,571 for past income loss and nothing for future income loss. Iannarella appealed.

In its decision, the Ontario Court of Appeal first concluded that the trial judge had incorrectly directed the jury on the issue of liability. The Court next turned its attention on the defence’s use of surveillance at trial. The Court explained that the Rules of Civil Procedure require that a party serve an affidavit of documents – whether or not the other side requests it – and this affidavit of documents must disclose the existence of any surveillance. Failure to properly disclose surveillance in this way means that said surveillance cannot be used at trial without leave of the court.

In this case, because the disclosure did not occur until the trial was well underway, the Court held that leave should not have been granted. The Court determined that the plaintiff had lost the chance to factor the surveillance’s existence into pre-trial settlement negotiations and had inadequate time to prepare an examination-in-chief that could properly respond to the surveillance. The Court said that, by allowing the defence to use the surveillance at trial, the trial judge had enabled a “trial by ambush.”

Due to these errors, among others, the Court substituted a finding of liability against the defendant and ordered a new trial on the issue of damages.
Defence counsel who wish to use surveillance at trial should be aware of Iannarella, and serve an updated Affidavit of Documents 90 days before trial in compliance with r. 30.09.

March 12, 2015

No Costs Awarded to Either Party

A recent decision confirms the decision a court has to make no award of costs to either party.

In Swatridge v. Waters Estate (2014), ONSC 5333 (S.C.J.), the defendant in a motor vehicle action made an offer to settle of $5,000 all inclusive.  The plaintiff's offer was for $85,000 ($55,000 net of the deductible) plus costs and disbursements.

At trial, the jury awarded $10,000 gross for general damages, and $0 for loss of income, housekeeping/home maintenance and medical/rehabilitation expenses.  After the deductible was applied, the new result to the plaintiff was $0.

Justice Ferguson declined to award costs to either side, holding that "The court cannot be blinded by the somewhat artificial characterizations of both the offer to settle and the trial result."  The reality was that an offer to settle amounting to zero dollars was made and rejected, and a trial was held and the result was a judgment for zero dollars. 

March 4, 2015

No Duty on Municipality to Stop Teens from Climbing Trees

The Court of Appeal has dismissed an appeal from a trial decision which held that a municipality was not liable for a teenager who fell out of a tree and was rendered paraplegic.

In Winters v. Haldimand (County), 2015 ONCA 98 (C.A.), the 16-year-old plaintiff was "hanging out" with friends at a municipal park.  The tree from which he fell was one he and friends had climbed numerous times and was a type of willow found all over Ontario.  The evidence was that generations of teenagers had climbed the tree and there had never been a report of an injury before the plaintiff's incident, save when someone twisted an ankle getting out of the tree.  None of the park personnel who were at the park weekly observed anyone in the tree.  The plaintiff's mother had never seen anyone in the tree and was unaware her son and his friends used it.

The Court of Appeal held that there was no error in the trial judge's decision, stating:

[16]      Any danger posed by this tree was an obvious one.  If you chose to climb it you could fall and be injured. There is no duty to warn of such an obvious and self-evident danger nor any duty to monitor beyond what the Township is doing at the time of this most unfortunate accident.
The Court also upheld the trial judge's decision to award costs against FLA claimants, holding that there is no general rule that no costs should be awarded against FLA claimants.

Congratulations to Sheila Handler and Brian McCall of McCall Dawson Osterberg Hanlder LLP, who were counsel at trial and on appeal.

February 25, 2015

Claim Against Brokerage Employee Struck

A Statement of Claim that seeks relief against an insurance broker and its employee must adequately distinguish the allegations made against the employee from those made against the company.

In ACI Brands Inc. v. Aviva Insurance Co. of Canada, the plaintiff, ACI Brands Inc., alleged that it was sold inadequate insurance coverage by the defendants. The defendants were an insurance company (Aviva Insurance Company of Canada), an insurance broker (Jones Brown Inc.) and an employee of Jones Brown Inc. (Stephen Smith).

The plaintiff’s Statement of Claim did not outline Smith’s role other than to say that he was the Jones Brown Inc. employee who had secured insurance coverage for ACI. The Statement of Claim did not differentiate the allegations made against Smith from those made against Jones Brown Inc. (the allegations were made against “the Broker and/or Smith”).

Smith brought a motion to strike the plaintiff’s pleading under Rule 21.

The court cited the Ontario Court of Appeal decision in ScotiaMcLeod Inc. v. Peoples Jewellers Ltd., which stated that, in order to hold an employee personally liable for his or her conduct, the employee’s conduct must demonstrate that the employee acted with a “separate identity or interest from that of the company so as to make the act or conduct complained of their own”.

Given that the Statement of Claim failed to differentiate Smith’s conduct from that of Jones Brown Inc., and thus failed to demonstrate that separate identity or interest, the court struck the claim as against Smith for disclosing no reasonable prospect of success.

February 18, 2015

Broad Definition of the Term “Accident”

In the decision VanBerlo v. Aim Underwriting Ltd., 2014 ONSC 4648 (S.C.J.), the Ontario Superior Court recently considered the meaning of the term “accident”. The plaintiff crashed while attempting to take off in his twin-engine aircraft when he was aware that only one of the two engines was functioning. Although he had never done this before, it was the plaintiff’s belief that the aircraft was capable of taking off with only one engine. Additionally, he felt that it was able to safely make the six-minute flight to his destination. The plaintiff sought to recover the damages to the plane under his Aircraft Policy of Insurance. The insurer argued that this did not fall under the definition of an "accident" and the policy was not triggered.

The Court reviewed the existing case law and concluded that the term "accident" is "an unlooked for mishap or occurrence”. Applying this definition, the Court found that an accident can occur where the conduct of the insured constitutes negligence and even gross negligence. In this case, the court held:

“It cannot be said, on the facts, that the plaintiff realized the danger of his actions and deliberately assumed the risk; nor can it be said that the plaintiff’s conduct rose to a level of recklessness or culpability such that the occurrence was no longer an accident.”

The insurance was policy was required to pay the damages sought by the plaintiff.

January 30, 2015

Court of Appeal Releases Decision in Moore v. Getahun

The 2014 decision of Moore v. Getahun created quite a stir in Ontario's litigation bar when Justice Wilson held that it was improper for counsel to review and discuss draft reports with experts.  The Court of Appeal released its appeal of the decision January 29, 2015.  You can access the decision by clicking here.

The Court disagreed with the trial judge. There held there is nothing improper about "this longstanding practice."  Sharpe J.A. noted that the trial judge's decision is contrary to existing cases which say communication with the expert can actually help ensure an opinion is admissible, coherent and comprehensive.  There are safeguards built into the system: counsel cannot persuade an expert to change an opinion and it still needs to be objective.

Draft reports and notes of meetings and other communications are litigation privileged and do not have to be produced, absent a reasonable suspicion the expert was improperly influenced.  The foundational information used in formulating the opinion must still be produced.

This common sense decision will be welcomed by many on both the plaintiff and the defence side.

January 28, 2015

Changes to the Rules Regarding Appeals

A number of changes to the Rules of Civil Procedure came into effect on January 1, 2015.

One of the changes is with respect to obtaining leave to appeal an interlocutory Order of a judge.  The former rule 62.02 provided that a notice of motion for leave to appeal must be served within seven dates of the Order.  The new rule is a substantial change: r. 62.02(2) provides that the motion for leave to appeal shall be heard in writing.

The change may reduce costs in that it eliminates the need for an argued motion.  The test for such appeals remains the same: a conflicting decision and desirable that leave be granted, or good reason to doubt the correctness of the decision and an appeal involving matters of such importance that leave to appeal should be granted.  

January 14, 2015

Negligent drivers liable to rescuers for injuries that are reasonably foreseeable

A recent summary judgment motion dealt with the extent of the duty of care owed to rescuers.

In Maguire v Padt2014 ONSC 6099 (S.C.J.), the defendant, Suzanne Padt, was driving in whiteout conditions when she lost control of her car and rolled into a ditch. Several passing motorists pulled over to rescue Padt from her car. After placing Padt safely in a police cruiser, the rescuers were preparing to return to their vehicles when another passing car lost control and drove into them. Two of the rescuers were killed and a third was seriously injured.  They commenced an action against Padt.

Padt brought a motion for summary judgment, arguing that the duty of care that she owed to her rescuers concluded at the end of the rescue and that the rescue had concluded when she was removed from imminent peril and was safe in the police car.

In its decision, the court first reviewed and affirmed the established legal principle that negligent parties who cause themselves or others to be placed in danger owe a duty of care to the responding rescuers.

The court stated that the rationale underlying this duty was that injury to rescuers was a reasonably foreseeable consequence of the negligent conduct that led to their involvement. The court stated that the negligent party should be liable for any injury that was a reasonably foreseeable consequence of the negligent conduct – not just for injuries that occurred while the person being rescued was in peril. The court put it this way: “It is foreseeability, not the end of the peril, that sets the limits of the liability.”

Given the whiteout conditions on the road, the court found that the second accident was a reasonably foreseeable consequence of Padt’s negligent conduct. The court dismissed Padt’s motion and, under the assumption that Padt was negligent in causing the first accident (which was accepted for the purpose of the motion), granted partial summary judgment in favour of the plaintiffs.

January 7, 2015

Municipality Has No Duty to Negligent Drivers

The Court of Appeal recently held that there is no duty on the part of a municipality to keep its roads safe for those who drive negligently.  It also rejected an argument that there is a different standard for rural and urban drivers.

In Fordham v. Dutton-Dunwich, 2014 ONCA 891 (C.A.), the 16-year-old plaintiff was seriously injured when he came to a rural intersection, ignored a stop sign and drove through the intersection at 80 km/hr.  He lost control on a curve and crashed into a concrete bridge abutting the road.  The trial judge found the municipality 50% responsible for failing to post a checkboard sign warning of the change in the road's alignment.  She held that it was local practice for rural drivers to go through stop signs and the municipality should have known that ordinary rural drivers do not always stop at stop signs.

The Court of Appeal allowed the appeal and dismissed the action.  Laskin J.A. held that a municipality's duty of repair is limited to ensuring its roads can be driven safely by ordinary drivers exercising reasonable care.  In addition, there cannot be one standard of reasonable driving for rural drivers and another for city drivers.  There is one standard of reasonable driving and that standard requires drivers to obey traffic signs.

Fordham helps define a municipality's standard of care: although ordinary reasonable drivers are not perfect and may make mistakes, they are not negligent.