Judge Says Special Circumstances Power Still Exists

Posted on April 18, 2008 by Stephen Cavanagh

Well, it’s finally happened. In Toneguzzo v. Corner, a Superior Court judge has come out and concluded that the enactment of s. 21(1) of the Limitations Act, 2002 has not done away with the court’s discretionary power to add parties after the expiry of a limitation period in “special circumstances”. According to this decision, the enactment of s. 21(1) doesn’t seem to have altered the law at all.

During the last four years, many limitation periods have been extended on the basis of “special circumstances”, but the judges and masters making those decisions appeared to have been unaware of the enactment of s. 21(1), effective January 1, 2004. That subsection says: “If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.”

Over the last year or so, a number of judges have begun to focus on s. 21(1) and, for the most part, have said that the legislation has done away with the former discretionary power to add parties after the limitation period where “special circumstances” are found to exist (see here, here and here, for instance). In one recent decision, the judge said it was “clear” that the “special circumstances” power no longer exists.

Some other judges haven’t been so sure (see Clark v. Reich, referred to in this post). However, so far as we know, no one has yet affirmatively held that the “special circumstances” power definitely has survived the enactment of s. 21(1). Until now.

(We are awaiting the Court of Appeal’s decision in Meady v. Greyhound, which we hope will finally resolve this now very unsettled area of the law.)

Toneguzzo was a decision of Madam Justice L. Templeton. In this MVA action, counsel for the plaintiffs discovered after the limitation period had passed, that the tractor trailer that had collided with the plaintiff’s vehicle was owned by a leasing company, not by the individual who had been named as a defendant in the original statement of claim. Accordingly, six years after the accident, the plaintiffs sought an order allowing them to add the leasing company as a defendant, either on the basis of discoverability or special circumstances.

Justice Templeton began by quoting s. 21(1) and observing, “clearly, the language of s. 21(1) is mandatory”. However, she went on to say that there are exceptions to the prohibition. One of them, she noted, appears in s. 21(2) of the Act (that subsection provides that s. 21(1) “does not prevent the correction of a misnaming or misdescription of a party”). She added that “recent jurisprudence” had created other exceptions, but did not say what those cases were nor what exceptions they had supposedly created.

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C.A. Upholds Big SABS Judgment

Posted on April 17, 2008 by Stephen Cavanagh

This week, the Court of Appeal released its ruling in Monks v. ING Insurance Company of Canada. This was a claim for statutory accident benefits brought by, ironically, a woman who, prior to her injury, had worked in the insurance industry. At the 2005 trial, Mr. Justice Paul F. Lalonde was quite critical of ING in the course of awarding very substantial damages to the plaintiff. These took the form of declarations of entitlement to various types of benefits, past and ongoing, as well as an award of aggravated damages in the amount of $50,000.

The sole ground upon which ING’s appeal was allowed was in relation to a $75,000 risk premium that had been awarded by Justice Lalonde. The trial decision pre-dated the Supreme Court of Canada decision in Walker v. Ritchie and the Court of Appeal’s ruling in The Manufacturer’s Life Insurance Co. v. Ward. Both courts held that risk premiums cannot be awarded. So, this part of the C.A. decision was pretty much a foregone conclusion.

The decision of the court was written by Justice Eleanore Cronk. (The other members of the panel were Justices Eileen Gillese and John Watt.)

Ms. Monks had been injured in three separate car accidents over the course of six years. The first was relatively minor but the second was more serious. At the time of the latter, she was insured by Zurich Insurance and sued for accident benefits as a result of neck injuries suffered in that accident. That litigation was still ongoing when the third accident happened. The injuries from that accident at first seemed minor but, over time, Ms. Monks underwent spinal decompression surgery and eventually became an incomplete quadriplegic. She was insured by ING at the time of the third accident.

Zurich Insurance settled the claim arising from the second accident but by the time the settlement was completed, ING had bought Zurich’s personal lines and it ended up being ING that made the payment ($1.275 million) in settlement of the litigation arising out of the second accident.

Shortly after that settlement, ING, which had been paying benefits to Ms. Monks in relation to the third accident, terminated those payments, on the basis that Monks was not catastophically impaired. Ms. Monks sued.

Evidently, ING changed its position once the litigation began. It admitted that Ms. Monks was catastrophically impaired, but contended that this was a result of the first two accidents and a pre-existing spinal condition.

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Divisional Court Rules Polygraph Evidence Inadmissible in Civil Suit

Posted on March 27, 2008 by Stephen Cavanagh

In Petti v. George Coppel Jewellers Ltd., Mr. Justice Joseph W. Quinn, sitting as a judge of the Divisional Court, ordered a new trial of a Small Claims Court action, where the Deputy Judge had decided the case, in part, by relying on the results of polygraph or “lie-detector” testing of both parties.

The plaintiff claimed that the defendant had stolen a diamond ring that he had left for a valuation. He sued for damages. Both parties agreed to submit to polygraph testing. At trial, the Deputy Judge allowed the two polygraph reports to be introduced into evidence, without oral testimony from the operators of the testing equipment.

Justice Quinn reviewed the law. He said that evidence that a person has offered to submit to polygraph testing can be admissible, but that was a neutral factor here, since both parties had made such an offer. Secondly, the questions and answers from the testing can be admissible, if they constitute admissions against interest. But the test results themselves are not admissible because they usurp the jurisdiction of the trier of fact. As His Honour said, “the court should not delegate its jurisdiction, even on consent”. Hence, a new trial was ordered.

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Civil Suit Barred by Findings at Criminal Trial (Even Though Plaintiffs Did Not Participate)

Posted on March 27, 2008 by Stephen Cavanagh

[UPDATE: On May 29, 2008, the Court of Appeal allowed an appeal from this decision. The Court’s reasons can be accessed here.]

Polgrain Estate v. The Toronto East General Hospital, a decision of Mr. Justice Thomas R. Lederer, considered the question of whether findings made at the trial of a sexual assault charge should preclude a civil suit arising out of the same incident. His Honour concluded that it would be an abuse of process to permit the civil action to go forward.

The sexual assault charge was against a nurse, employed by the Toronto East Hospital. He was alleged to have assaulted a woman who was a patient there for a few months prior ot her death. At the trial, Laforme J. acquitted the accused, finding that not only had the Crown failed to prove its case, but that the alleged assaults had never taken place.

Justice Lederer reviewed the law regarding abuse of process and noted that Canadian courts had used the principle to prevent relitigation even where the strict requirements of res judicata or issue estoppel were not met.

The plaintiffs (representing the estate of the deceased) argued that acquittals in criminal cases are inadmissible in civil actions. However, Justice Lederer considered that the paramount consideration should be the protection of the integrity of the judicial system. It was simply unacceptable to him, that a judge hearing the civil trial would be in a position to come to the opposite conclusion about events at the hospital as had Laforme J. He viewed this suit as an attempt to relitigate those findings.

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Third Party Claim Relating to Prior Accident Dismissed on Rule 21 Motion

Posted on March 24, 2008 by Stephen Cavanagh

In Willoughby v. Weber, Madam Justice Beth Anna Allen decided a Rule 21 motion involving the recurring problem of the same plaintiff being injured in multiple accidents. The motion sought the dismissal of a third party claim. Justice Allen granted the motion.

The plaintiff had been involved in three separate car accidents. Two of them had occurred in 2003 and the plaintiff sued various defendants in relation to those accidents. However, the plaintiff had also been involved in an accident in November, 2002. She had been convicted of a driving offence in relation to that accident. She had not sued anyone for any injuries suffered in that accident.

However, some of the defendants in the action brought as a result of the 2003 accidents commenced a third party claim against another driver who had been involved in the 2002 accident. They did so out of a concern that the plaintiff’s injuries might be found to be “indivisible” among the three accidents. They wanted to ensure that if the third party was at fault for the 2002 accident and if that accident had contributed to an “indivisible” injury, that they could obtain contribution from that party.

Counsel for the third party argued that “s. 1 of the Negligence Act does not apply in circumstances where the negligent acts of the tortfeasors are separated in time”, as the 2002 and 2003 accidents obviously were. Section 1 of the Act reads as follows:

Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and, where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering the loss or damage for such fault or negligence, but as between themselves, in absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.

Justice Allen agreed that the third party action should be dismissed, but she based her decision on grounds different from those argued by counsel for the third party. She relied heavily on the Court of Appeal’s decision in Misko v. Doe, which had been cited to her by both parties in argument. That case involved a third party claim by a defendant in an action arising out of one accident against a defendant who had been sued by the same plaintiff in relation to another accident but who had settled the claim. The Court of Appeal upheld the motions judge’s dismissal of the third party claim against the settling defendant, but did so because the plaintiff had undertaken not to pursue compensation for any injuries sustained in the first action (i.e., the one in which a settlement had been reached). (It is for this reason that we said, in our comment about the case, that the Court of Appeal’s decision will be of limited use. However, judging from Justice Allen’s reasons in Willoughby, we might have been wrong about that…)

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Former Negligence Act Limitation Period for Claim Over Applies to 2008 Claim Arising Out of 2001 MVA

Posted on March 24, 2008 by Stephen Cavanagh

In Davey v. Davey, Mr. Justice Dougald R. McDermid was dealing with a motion to amend the statement of claim in a motor vehicle case. The plaintiffs in one of two actions that had been ordered to be tried together moved to increase the general damages from $5 million to $20 million and the special damages from $500,000 to $1 million.

The defendants did not seriously oppose this relief, but sought leave to amend their own pleading, to add a crossclaim against the plaintiff’s sister (who had been driving one of the cars involved in the accident) and to add a counterclaim and a third party claim against the plaintiff’s father (the owner of that car).

The motion for leave to bring the crossclaim, counterclaim and third party claim, was opposed by counsel for the plaintiff and counsel for the plaintiff’s sister (a defendant driver). Both argued that the proposed claims were barred by the provisions of the Limitations Act, 2002, which came into force on January 1, 2004.

Formerly, claims for contribution or indemnity in cases such as this were governed by s. 8 of the Negligence Act. That section permitted such claims to be made within one year of the date of settlement or judgment of the claim by injured person. The Limitations Act, 2002 has replaced that provision with a two-year limitation period that runs from the date on which the person making the claim for contribution or indemnity was served with the claim in relation to which contribution or indemnity is being sought. So, it is a much less elastic limitation period than was its predecessor.

However, Justice McDermid was satisfied that the two-year limitation period in the present statute did not apply and that the case was still governed by s. 8 of the Negligence Act, with the result that the proposed claim for contribution or indemnity was timely. He reached this decision on the basis that the acts or omissions on which the claims were based had taken place before the effective date of the Limitations Act, 2002.

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Action Against Insurer Pursuant to Uninsured Motorist Coverage Can Proceed Where Vehicle Driven Without Consent

Posted on March 24, 2008 by Stephen Cavanagh

In this case, Allianz Insurance was unsuccessful in its motion for summary judgment, dismissing a claim under its uninsured motorist coverage.

In George v. George, the plaintiff rented a car from the defendant Enterprise-Rent-A-Car. He purchased insurance that included uninsured motorist coverage in a policy issued by the defendant Allianz Canada. The rented car was taken by another defendant, without the consent of the plaintiff or of Enterprise. That party had assaulted the plaintiff and then driven off in the car. He was later involved in an accident in which the plaintiff was injured.

Both Enterprise and Allianz moved for summary judgment, on different grounds. Enterprise argued that it could not be liable because the car was being driven without its consent. As a result, it could not be liable to the plaintiff under s. 192 of the Highway Traffic Act. It appears that the motions judge, Mr. Justice William A. Jenkins, was prepared to allow Enterprise’s motion, although oddly, he said that the parties “did not specifically address” this motion in argument.

Most of the decision dealt with the motion by Allianz. The insurer argued that its coverage only applied where the plaintiff was legally entitled to recover from the owner or driver of “an uninsured automobile” and that the Enterprise car did not come within the definition of “uninsured automobile”.

The definition appears in s. 265(2) of the Insurance Act:

… An automobile with respect to which neither the owner nor driver thereof has applicable and collectible bodily injury liability and property damage liability insurance for its ownership, use or operation but does not include an automobile owned by, or registered in the name of the insured or his or her spouse. [Emphasis added]

Allianz argued that this case was caught by the exception in bold above, in that the automobile in question was owned by and registered in the name of “the insured”, namely, Enterprise. On this basis, it said, the uninsured motorist coverage was not available.

The plaintiff argued that the phrase, “the insured” in the definition referred to the person making the claim. Since the automobile was not owned by or registered to the plaintiff, so the argument went, the exception (in bold) did not apply. 

Justice Jenkins rejected Allianz’ argument, saying that it “ignores the legislative intent in enacting the statutory uninsured motorist regime”. He also said that it was necessary to look at the definitions of “person insured under a contract” and “insured” in sections 224 and 265 of the Insurance Act. His Honour was satisfied that those definitions “point to persons other than the named insured as enjoying protection under the policy”. Therefore, he dismissed the motion by Allianz.

 

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Judge Says It’s “Clear” that Limitations Act, 2002 Has Removed Discretion to Provide Relief from Limitation Periods

Posted on March 24, 2008 by Stephen Cavanagh

Although the issue seems to be far from settled in the minds of some judges, Mr. Justice C. Stephen Glithero made the following unequivocal statement in Hughes v. Kennedy Automation Limited about the effect of s. 21(1) of the Limitations Act, 2002:

It is also clear that the enactment of the Limitations Act, 2002 removed any previously existing discretion on the part of the court to provide relief from limitation periods, and that instead the language of section 21(1) is mandatory and prohibits the commencement of a claim or the adding of new parties to an existing claim once a limitation period has expired.

Regular readers of this blawg will be aware that there have been quite a few cases decided since January 1, 2004 (when the Limitations Act, 2002 came into force), in which parties have been added as defendants after the expiry of the limitation period, based on the former “special circumstances” discretion. (See here, for example.) In most of those decisions, the judges and masters seem to have been unaware that s. 21(1) of the current Act provides that “[i]f a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.”

In a case in which our office was involved, Clark v. Reich, a motions judge held that it was not clear whether s. 21(1) had done away with the “special circumstances” power. She said, “despite the apparently unequivocal language of s. 21(2) [sic, should read “s. 21(1)”] of the Limitations Act, 2002, I am not persuaded that it is ‘plain and obvious’ that there could never be a discretionary extension of the Trustee Act time limit because of special circumstances”. In dismissing a motion for leave to appeal from that decision, another Superior Court justice was satisfied that it was not “plain and obvious that s. 21(1) removes the availability of the special circumstances doctrine”.

The matter certainly does seem to have been “plain and obvious” to Justice Glithero, making it rather difficult to sort out what the law actually is on this point.

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Court Agrees that Limitation Period for Pre-2004 Loss Transfer Claim is Six Years

Posted on March 24, 2008 by Stephen Cavanagh

In Lloyd’s Underwriters v. The Dominion of Canada General Insurance Company, Mr. Justice George Strathy upheld a ruling by arbitrator Bruce Robinson, who had determined that the limitation period for a “loss transfer” claim under s. 275 of the Insurance Act was six years. (Normally, insurers cannot seek reimbursement for no-fault benefits. But section 275 allows such claims in certain types of cases: those in which the vehicles that they insure are disproportionately likely to cause injury (heavy commercial vehicles) or those whose occupants are especially vulnerable to injury (motorcycles).)

This case arose prior to the enactment of the Limitations Act, 2002, which took effect on January 1, 2004. That statute established a two-year limitation period that applies to most types of cases. At the time of the events giving rise to the loss transfer claim in the present case though, there was a two-year limitation period under s. 206(1) of the Highway Traffic Act, where the claim was one “for the recovery of damages occasioned by a motor vehicle”.

The other limitation period that might have applied was the six-year period provided for by s. 45(1)(g) of the former Limitations Act for an “action upon the case”.

The issue was of considerable importance in this case. As Justice Strathy noted, the limitation period for loss transfer claims is a “rolling” one, such that a new limitation period arises with each payment made by the first party insurer. If the two-year limitaiton period were found to apply, the first party insurer could only pursue a claim for benefits totalling $9,795.22. However, if the limitation period were determined to be six years, the claim would total $194,203.61.

In this case, arbitrator Bruce Robinson had held that the longer limitation period applied. On appeal to Justice Strathy, His Honour reviewed other arbitral decisions and concluded that a loss transfer claim is not one “for the recovery of damages occasioned by a motor vehicle”, as required by the HTA limitation period. Rather, it is a claim for indemnity, which, he said, is not the same thing. Accordingly, he agreed with Mr. Robinson, that the six-year limitation period governed.

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Summary Judgment Granted in Medical Malpractice Case Where Plaintiff Fails to File Affidavits of Experts

Posted on March 24, 2008 by Stephen Cavanagh

In Suwary v. Women’s College Hospital, Mr. Justice George R. Strathy was dealing with a defence motion for summary judgment in a medical malpractice case. The key issue in the action was informed consent in relation to one of the defendant doctors (as it had been conceded by the plaintiff that summary judgment should issue in relation to another defendant physician). His Honour ruled that the evidence filed on behalf of the plaintiff did not establish a genuine issue for trial and dismissed the claim. His reasons contain some helpful comments about the evidentiary requirements of such motions.

The defendants had filed four affidavits, three from expert medical witnesses and one from an associate at the law firm representing the defendants. In response, the plaintiff filed an affidavit sworn by an associate in the law firm representing her. The deponent of that affidavit swore that he had informed himself by reading the discovery transcripts and the medical reports and records. Two medical reports had been attached to the affidavit as exhibits. The reports had been prepared by experts retained by the plaintiff’s solicitor. Justice Strathy concluded that one of the two reports did not implicate the doctor in question on the issue of informed consent, while the other might.

However, His Honour held that the “information and belief” affidavit filed on behalf of the plaintiff fell far short of establishing a genuine issue for trial. He was critical of the failure to file an affidavit from the medical experts. He said:

It is well-established that a party intending to rely on the opinion of an expert on a summary judgment motion must put the evidence forward in a manner that will permit cross-examination of the expert. In Hiebert v. Lennox Canada Inc., [2007] O.J. No. 3079, Valin, J., stated at para 17:

If a party intends to rely on the substance of an expert’s report on a summary judgment motion, the evidence must be put before the court in a manner that will permit cross-examination of the maker of the report. This can be done in one of two ways. The expert can place the substance of his/her opinion in an affidavit sworn by him/her. Alternatively, the expert can swear an affidavit to which his/her report is attached as an exhibit and swear to the truth of the contents of the report.

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