DINNER AND DRINKS: BC COURT OF APPEAL
CONFIRMS NIGHTCLUB ACCIDENT NOT WITHIN
SCOPE OF PROFESSIONAL INSURANCE
November 2012
Number 743
Quantum of
Damages . . . . . . . . . . .
— Andrew Aguilar of McMillan LLP. © McMillan LLP. Reproduced with permission.
2
Recent Cases
Motions Judge
Erred in Dismissing
Property Damage
Claim From Cargo
Damaged in Auto
Accident . . . . . . . . . . . .
3
Although Breach of
Trusts Fell Within
Coverage,
Exclusions Excluded
the Loss . . . . . . . . . . . .
5
No Implied Consent
To Drive Could Be
Found From Fathers
Failure To Press
Theft Charges . . . . . .
6
In what may be the final chapter of a very long and protracted legal proceeding, the
British Columbia Court of Appeal recently issued its decision in Poole v Lombard General
Insurance.1 This is a case that has captured the attention of the legal community across
Canada both for the nature of the claim — an articling student suing an associate at her
law firm for injuries suffered as a result of a fall at a night club after a firm sponsored
dinner — and for the quantum of damages awarded — almost six million dollars in future
wage loss. While the facts of this case should serve as a warning to employers that they
need to be aware of potential liability for the acts of employees at non-traditional work
functions, the appeal should also be of some comfort to insurers providing professional
insurance to employers. In Poole v Lombard, the appellate court held that any
connection, however tenuous, between the event where the act occurred and the
employment, was not sufficient to engage coverage under the law firm’s insurance policy.
The policy, which was more broadly worded than many, did not extend to acts by an
employee while out for impromptu drinks with co-workers after a employer sponsored
dinner.
The accident on which this case is based, occurred over ten years ago on April 6, 2001,
when an articling student struck her head on the floor after being knocked over by an
associate of the firm while dancing at a local nightclub. At the time, the student and the
associate were both part of a group of co-workers who had gone out for drinks after a
dinner, sponsored by their law firm employer. The hearing of this matter was split into
two separate trials. The first trial dealt with the accident itself, and the second trial dealt
with insurance coverage. The appeal in Poole v Lambard, was in relation to this second
trial.
Defendants Not
Permitted To
Reopen Trial To
Address
Contributory
Negligence . . . . . . . . .
7
Plaintiffs Permitted
To Amend
Originating Notice
Despite Previous
Dismissal . . . . . . . . . . .
At the first trial, the British Columbia Supreme Court found that the student had suffered
a mild traumatic brain injury as a result of the accident on the dance floor and that she
could no longer pursue her career as a lawyer. The court further held that the accident
was caused solely by the negligence of the associate and awarded damages against the
associate personally in the amount of $5,913,783.54. Notwithstanding this significant
damage award, the associate had previously reached a settlement agreement with the
student on the basis that he would pay $1,050,000, the limits on his home owners
insurance policy, and agree to continue to pursue the action against his law firm’s
insurer. The student could therefore only collect the full amount of the judgment if it
was held that the accident fell within the coverage of the law firm’s professional
insurance policy.
8
This set the stage for the second trial, which focused on the issue of whether the
1
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CANADIAN INSURANCE LAW REPORTER
associate was entitled to coverage from the law firm’s “professional package” insurance policy provided by Lombard
General Insurance. This trial turned on whether the associate fell within the scope of one of two clauses in the contract
of insurance. The first clause dealing with acts within the “scope of” or “course of” employment and the second clause
dealing with acts with “respect to” employment.
At trial,2 the court held that the two clauses needed to be read together, and that when read together, only the clause
relating to the “scope of” or “course of” employment could apply. The court went on to consider whether the
associate’s actions fell within the “scope of” or “course of” his employment and found that they did not, noting that
while there were some business reasons to sponsor the dinner, the events at the nightclub had “a far more tenuous
connection” with employment, and that the evidence did not support any residual benefit to the employer from the
attendance of its employees at the nightclub. Considering only the first more narrow clause, the court found that the
associate did not fall within the scope of the law firm’s insurance policy.
On appeal, the associate conceded that his actions in causing the accident were not within the “scope of” or “course
of” his employment, but sought a finding that the second clause could apply and did provide coverage as his actions
were with “respect to” his employment.
The court held that the trial judge had erred in law in determining that the two clauses should be read in conjunction.
The appellate court confirmed that “the primary interpretive principle” set out by the Supreme Court of Canada in
Progressive Homes Ltd. v Lombard General Insurance Company of Canada,3 was that “when the language of the policy
is unambiguous, the court should give effect to clear language, reading the contract as whole.” While there was overlap
between the two clauses, the wording was unambiguous, and the trial judge was incorrect in interpreting the clauses
together rather than as stand-alone clauses.
The court then examined the meaning of the phrase with “with respect to” employment and held that it has a wider
meaning than “in the course of” or “within the scope of” employment. The court rejected prior American4 and UK5
case law, which took a more stringent view of the connection to employment implied by the wording “with respect
to”, and took a more practical view, that:
[T]he phrase requires that a line be drawn on a commercially reasonable basis between what is essentially firm
functions and what are essentially social functions — notwithstanding some weak connection between the
latter and an insured’s employment.6
The court went on to hold that contextual factors such as who was in attendance, where the incident took place,
whether business was being discussed, time and place, and the likelihood of benefit to the employer were all relevant in
this determination. While not legally binding, the court suggested that the dinner likely would have fallen within the
scope of coverage, but that going to the night club did not as this had crossed the line into a purely social function.
At the end of the day, whether an insurer providing professional insurance to an employer will be liable for the acts of
employees at a non-traditional work event will be a fact specific determination and differ depending on the policy and
the event, but Poole v Lambard makes it clear that liability will not extend indefinitely and courts will likely take a
practical commercially reasonable approach in determining whether the event is sufficiently connected to the
employment relationship to engage coverage.
Notes:
1 2012 BCCA 434 [Poole v Lombard].
2 2011 BCSC 65.
3 2010 SCC 33.
4 Rayburn v MSI Insurance Company, 624 NW 2d 878 (Wis CA 2000).
5 Tesco Stores Limited v Constable & Ors, [2008] EWCA Civ 362.
6 Supra note 1 at para 49.
QUANTUM OF DAMAGES
Injury
Non-Pecuniary
Total
Paragraph
Brain
$250,000
$1,685,000
¶M-2634
Brain
$300,000
$638,675
¶M-2631
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CANADIAN INSURANCE LAW REPORTER
RECENT CASES
Full-Text Decisions
Motions Judge Erred in Dismissing Property Damage Claim From Cargo Damaged in
Auto Accident
Ontario Court of Appeal, September 10, 2012
The appellant rented a truck from Ryder Canada (“Ryder”) to transport a food-packaging machine used in its business.
The machine was damaged when another vehicle hit the truck. The appellant sought compensation from Ryder’s
insurer, the respondent, for the damage to its machine, but the respondent denied coverage. On a motion brought by
the appellant to determine three questions of law, the motions judge held: (1) the respondent was not the appellant’s
“insurer” for the purpose of section 263(2) of the Insurance Act (the “Act”); (2) the terms and conditions in the rental
agreement limited the appellant’s recovery; and (3) if the appellant misrepresented the type of cargo it was carrying,
this would impact its recovery from the respondent pursuant to section 263(2). The claim was dismissed. The appellant
submitted that the motions judge erred by failing to give effect to the Direct Compensation — Property Damage
provisions in the Ontario Automobile policy, provisions authorized by section 263 of the Act.
The appeal was allowed. Regarding the first question, the Court held that the respondent was the appellant’s insurer for
the purpose of section 263(2) of the Act. The motions judge erred in holding that section 247(b) of the Act and
section 3.5.1 of the policy applied to direct compensation for property damage; these sections applied to third-party
liability coverage. The applicable statutory provision was section 263. That section and section 6.1 of the Automobile
Policy would entitle Ryder to recover from the respondent, and the inclusion of an endorsement in the policy extended
coverage to lessees. The Court concluded that the appellant was therefore an “insured” and the respondent was treated
as its “insurer.” Turning to the second question, the Court stated that the respondent was not a party to the rental
agreement and that the rental agreement was not part of the automobile insurance policy between Ryder and the
respondent. No terms of the rental agreement could alter the respondent’s obligation to the appellant under the policy.
Finally, the Court held that even if the appellant misrepresented its cargo to Ryder, this would not affect its
entitlement under the policy.
Siena-Foods Ltd. v. Old Republic Insurance Co. of Canada, [2012] I.L.R. ¶I-5334
Foster Parents Who Were Terminated Were Not “Insureds” in Renewal Policies
Ontario Superior Court of Justice, August 30, 2012
The respondent Frank Cowan Company (“Cowan”) issued insurance policies that required the Court’s interpretation.
Briefly, both applications sought to determine the extent of available insurance coverage under the aggregate coverage
provisions of the relevant policies. The Durham Children’s Aid Society (“DAS”) purchased four public entity casualty
policies for the yearly periods beginning March 31, 2008, with the last policy ending March 31, 2012. Foster parents
with the DAS were criminally charged in relation to the operation of their foster home. They were terminated as foster
parents in October 2008. The foster parents retained counsel and were acquitted in June 2011. Legal expenses totalled
approximately $750,000. There was no dispute that foster parents fell within the definition of insured, and Part I of the
policies covered “legal expenses.” There was also no dispute that the policy in place for March 31, 2008 to March 31,
2009 had been triggered. In dispute was whether the subsequent policies were triggered. Each policy had a $500,000
aggregate limit. The applicants argued the $500,000 limit was not applicable where the legal expenses were incurred
over successive policy periods. Cowan submitted the policies were “claims made” policies which only covered claims
arising during the currency of the policy term.
The applications were dismissed. Nowhere in the limit of liability was there any provision to the effect that the limit of
the insurer’s liability should not be cumulative from year to year or period to period. If an ambiguity existed, the law
was clear it was to be resolved in the insured’s favour. While it might seem to be an anomaly that the applicant should
effectively be entitled to “stack” the aggregate limits from policy period to policy period, it would have been a simple
drafting exercise for the insurer to have inserted words to remedy this result, but it did not do so. The Court concluded
the aggregate coverage for legal costs was $2 million spanning all policy periods. However, the Court found that one
issue remained: whether the applicants were entitled to this aggregate amount in excess of $500,000. The Court found
they were not. Because the foster parents were terminated during the first policy period, they were not “insureds” for
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CANADIAN INSURANCE LAW REPORTER
the renewal policies from 2009 to 2011. Therefore, the applicants were limited to the aggregate limit of $500,000.
David J. Gillespie Professional Corp. v. Frank Cowan Co. Ltd., [2012] I.L.R. ¶I-5335
Insurance Contract Not Binding on Non-Signatories
Ontario Superior Court of Justice, September 12, 2012
In 1995, the applicant Fingold entered into an agreement with the respondent Metropolitan Toronto Condominium
Corporation (“MTCC”) to allow his heritage property to become part of a condominium complex; the agreement
allowed Fingold to develop it into three condominium units. Although Fingold’s property was part of the condominium
complex, the property was a free-standing, non-attached structure. In 2009, a fire occurred at Fingold’s property; it had
once been his residence, but at the time of the fire a portion of it was used as an office. A dispute arose between
Fingold and MTCC 1100 with respect to which of them (and their respective insurers) should be entitled to direct and
control the repair of the property. At the time, Fingold was insured by Chubb Insurance Company of Canada (“Chubb”),
and MTCC 1100 was insured by Novex Insurance Company (“Novex”). Fingold sought a declaration that he was entitled
to direct the repairs, as well as an injunction to prevent MTCC from making any repairs. MTCC argued its Novex policy
provided coverage for the physical loss and damage, and that the adjustment of such loss was the exclusive right of
MTCC 1100. Novex generally supported the relief sought by MTCC in relation to the repairs, and sought to have the
application dismissed. Chubb took no position.
The application was dismissed. The Court found that the parties were unable to rely on the provisions in their
respective insurance policies to support their positions. Fingold and MTCC entered into insurance contracts with their
own insurers, and neither party was a signatory with respect to the other’s insurance policy; therefore, the insuring
agreements were not binding on the respective non-parties. After reviewing the relevant documentation and the nature
of the condominium development as a whole, the Court concluded that MTCC had the obligation to repair after
damage. However, the Court restricted this right to the roof and the exterior of the property. This was a fair and
equitable result, given the unique nature of the property and its overall importance to the condominium unit. In the
alternative, the Court found that MTCC was entitled to make repairs to the exterior on the basis that Fingold had not
carried out the necessary repairs within a reasonable time. The Court also ordered that any issues related to Novex’s
expense with respect to ongoing maintenance could be dealt with by way of a further application to the court.
Chubb Insurance Co. of Canada v. Novex Insurance, [2012] I.L.R. ¶I-5337
Garage Automobile Policy Insurer Required To Pay Defence Costs and Indemnity but
Not Necessarily Exclusively
Ontario Superior Court of Justice, September 20, 2012
The respondent owned and operated a tilting-bed tow truck that was insured by Lombard General Insurance Company
of Canada (“Lombard”) under a garage automobile insurance policy. The respondent and Richard Spatola (“Spatola”)
picked up some equipment for transport to the applicant’s house, which was insured by Co-operators General Insurance
Company (“Co-operators”) under a home insurance policy. The applicant assisted with unloading the equipment from
the truck. At some point, the respondent caused the bed to tilt, the equipment rolled, and Spatola was struck by it and
injured. Spatola sued the respondent for damages, and the respondent commenced a third-party action against the
applicant. The applicant referred the matter to Co-operators, which defended him and brought this application.
Co-operators sought a declaration that Lombard was exclusively liable to pay the applicant’s defence costs and
indemnity for damages assessed against the applicant in the action brought by Spatola.
The application was allowed in part. There were two questions: (1) whether the applicant was an “occupant” of the
truck within the meaning of the garage policy; and (2) whether the applicant fell within an exclusion in the home
insurance policy. With respect to the first question, the Court was required to decided between two Court of Appeal
decisions that reached opposite results on similar facts — Djepic v. Kuburovic, [2006] I.L.R. ¶I-4473, and AXA Insurance
v. Dominion of Canada General Insurance, [2005] I.L.R. ¶I-4346. The Court concluded that the AXA decision was
applicable. The vehicle was a truck with a special set of uses. It would be inconsistent with a purposive approach to
construe a garage automobile policy to be categorical about the type of cargo a truck might ordinarily carry. The Court
stated that the truck was built to carry “stuff” and it did so. As such, the Court concluded that Lombard was obliged to
pay the applicant’s defence costs and indemnity for the damages assessed, but not necessarily exclusively. With respect
to the second question, the Court held that because the precise cause of the accident and the applicant’s role in it
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CANADIAN INSURANCE LAW REPORTER
were not yet known (he had not been examined), the application was premature. The Court ordered that this remaining
issue be tried immediately after the trial.
Huestis v. Dahmer, [2012] I.L.R. ¶I-5339
Plaintiff Did Not Have Insurable Interest in Vehicle
Ontario Superior Court of Justice, September 20, 2012
The plaintiff Wen was operating an Acura when she collided with a pedestrian. The pedestrian brought an action for
damages for personal injuries against Wen and her common-law spouse, Shen; Unifund Assurance Company (“Unifund”)
was a statutory third party, as it denied coverage to Wen and Shen in that action. The pedestrian’s insurer, State Farm
Mutual Automobile Insurance Company (“State Farm”), was added as a party after this denial. Wen, Shen, and State
Farm contended that Unifund was responsible for responding to the pedestrian’s claims. Unifund was the insurer of
Shen’s two vehicles, and Shen called to add Wen’s Acura after the accident. Unifund alleged Shen and Wen
contravened the insurance contract and/or committed a fraud by failing to disclose the accident and the proper owner
of the vehicle. Wen and Shen argued that while Shen was not the registered owner of the Acura, he had an insurable
interest in it.
The action was dismissed. The Court applied the test set out by the Supreme Court of Canada in Kosmopoulos v.
Constitution Insurance, [1987] I.L.R. ¶I-2147, and found that Shen did not have an insurable interest in the Acura. The
evidence was clear he did not have a monetary interest in the vehicle, nor did he use it. The Court concluded that Wen
never intended to sell the Acura to Shen; the story was fabricated to try to protect Wen from liability. In case it was
incorrect in this regard, the Court proceeded to examine the second issue of whether Shen and Wen contravened the
insurance contract and/or committed fraud. The Court concluded that the plaintiffs’ right to recover indemnity from
Unifund was forfeited based on their actions. The Court found several instances of intentional misrepresentation, and it
did not find Shen or Wen’s evidence credible. The Court accepted that Unifund’s representative asked Shen questions as
prompted by a computer, which would have prevented the representative from moving to the next question until
an answer had been entered. The Court found Shen denied the vehicle had been in an accident and that there were
other drivers in the household. The Court also agreed with Unifund that section 258(9) of the Insurance Act allows an
insurer to rely on any misrepresentations or policy breaches for the portion of its policy limit above the minimum limit.
Wen v. Unifund Assurance, [2012] I.L.R. ¶I-5340
Although Breach of Trusts Fell Within Coverage, Exclusions Excluded the Loss
Ontario Superior Court of Justice, September 17, 2012
International Warranty Company Limited (“IW”) sold extended warranties to purchasers of certain automobiles. Central
Guaranty Trust Company (“CGT”) received the premiums as trustee for the purchasers of the warranty. IW was placed
in receivership. The plaintiff Ernst & Young Inc. (“E&Y”) was the receiver of IW. The defendant Chartis Insurance
Company of Canada (“Chartis”) was the insurer of CGT. Because of allegations that trusts had been breached, E&Y sued
CGT. E&Y received a judgment in its favour of approximately $10 million, and attempted to realize that judgment by
relying on the insurance issued by Chartis to CGT. The parties agreed that there would be remaining issues for trial,
and therefore this was a motion for partial summary judgment, which both parties sought in their favour. Chartis
argued that E&Y did not have standing to bring the action, or in the alternative that the policy did not cover the loss.
The motion was granted in favour of the defendant. The Court found that E&Y had standing to bring the action, and
that a breach of trust that occurred as a result of the insured’s failure to properly carry out its function as a trustee
under the trust agreements and that caused a loss to beneficiaries would be covered under the policy. In this case, CGT
intended money taken from the trust to be used to purchase security for the loan made to IW and that money taken
from another trust be passed on to IW. The reasons for judgment of an earlier action left little doubt that the trusts
were intentionally breached. However, the reasons did not indicate that CGT’s acts were undertaken with the intention
of causing harm to the trusts; CGT undertook the acts on the understanding there was a surplus in the trusts. The
Court found that coverage would be available where the wrongful act was intended but the consequent damage was
not. However, the Court held that exclusions in the policy applied to withdraw coverage. CGT’s actions, as decided in a
previous judgment, were dishonest or provided an illegal advantage. CGT misappropriated funds for its own benefit. The
exclusions operated such that E&Y could not rely on the policy to satisfy the judgment it obtained against CGT.
Ernst & Young v. Chartis Insurance Co. of Canada, [2012] I.L.R. ¶I-5341
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CANADIAN INSURANCE LAW REPORTER
Other Insurance Decisions
●
Limitation Issue Should Have Been Considered Before Consolidation Issue
Gordyukova v. Certas Direct Insurance, [2012] I.L.R. ¶I-5332, Ontario Court of Appeal (August 30, 2012)
●
Examiner’s Efforts Were Reasonable Even Though Proposed Dates Were Outside 30-Day Period
Benc v. Parker, [2012] I.L.R. ¶I-5333, Court of Appeal of Alberta (August 30, 2012)
●
Insurer’s Application for Severance of Coverage and Bad Faith Claims Allowed
Shaffner v. Insurance Corp. of British Columbia, [2012] I.L.R. ¶I-5336, Supreme Court of British Columbia (August 24,
2012)
●
Insurer Entitled To Recover Under Bond, as It Held Honest Belief as to Validity of Obligee’s Claim
Travelers Guarantee Co. of Canada v. Farajollahi, [2012] I.L.R. ¶I-5338, Supreme Court of British Columbia (August 31,
2012)
●
Plaintiff Failed To Establish Prima Facie Case That He Was Incapable of “Gainful Employment”
Bain v. Great-West Life Assurance, [2012] I.L.R. ¶I-5342, Supreme Court of British Columbia (September 19, 2012)
●
Section D Action Was a Direct Action Subject to Two-Year Limitation Period
Tucker v. AXA General Insurance, [2012] I.L.R. ¶I-5343, Supreme Court of Newfoundland and Labrador, Trial Division
(September 25, 2012)
Torts — Motor Vehicle
Plaintiff’s Injuries Were Severe and Permanent but $300,000 in General Damages
Appropriate as She Did Not Require Constant Supervision
Supreme Court of British Columbia, September 20, 2012
The plaintiff suffered a head injury, multiple bone fractures, and other serious injuries when her vehicle was struck by a
vehicle owned by the defendant Key West Ford Sales Ltd. and leased to the defendant driver, who did not enter an
appearance in the action or attend trial. The defendant and third-party insurer admitted that the driver had a blood
alcohol content of .069 to .092 at the time of the accident; he was found guilty of dangerous operation of a motor
vehicle causing bodily harm. Although the defendant and insurer formally disputed liability in their pleadings, they did
not seriously contest the issue at trial. Among other damages, the plaintiff sought the upper limit for non-pecuniary
damages.
The action was allowed. The defendant driver was wholly at fault for the accident on the basis that he failed to meet
the standard of care required of a reasonably competent driver when he pulled into the plaintiff’s lane of travel to pass
a car in front of him. Turning to the assessment of damages, the Court accepted the plaintiff’s injuries as presented.
While the plaintiff was completely independent in relation to bathing and dressing, and managed to control her own
finances, which was a better result than expected, she would have permanent cognitive impairments and physical pain.
With respect to non-pecuniary damages, the parties agreed the limit, adjusted for inflation, was $342,500 at the time
of trial. The Court held that $300,000 was an appropriate award in the plaintiff’s circumstances, noting that while her
injuries were severe, life-threatening, and chronic, the plaintiff was distinguishable from plaintiffs in some of the
authorities in that she did not require constant supervision for her own protection. She continued to enjoy a
considerable degree of independence.
Clost v. Relkie, [2012] I.L.R. ¶M-2631
No Implied Consent To Drive Could Be Found From Father’s Failure To Press Theft
Charges
Ontario Superior Court of Justice, September 11, 2012
The defendant L.B. moved for summary judgment dismissing the plaintiffs’ claims against him. His son, S.B., took his
vehicle without his consent and was involved in an accident that injured the plaintiffs. S.B. was 17 years old and did
not have a valid driver’s licence. He had been drinking. S.B. was charged with driving without a licence and impaired
driving, but L.B. did not press charges for theft. L.B. sought dismissal of the action on the ground that he did not give
his son consent to drive the car.
The motion was allowed. There was no express consent given by L.B. to his son to drive the car. Based on the evidence,
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CANADIAN INSURANCE LAW REPORTER
the Court concluded that S.B. also did not have implied consent to drive the vehicle. He had no licence and had never
operated a vehicle prior to this occasion. The evidence also indicated that he knew his father would not have given
permission to drive the car until he had gotten his learner’s permit and taken driving lessons, as his older brother had
done. The Court noted that S.B. had never previously taken the car. L.B.’s decision not to press charges for theft was
not indicative of consent — it was a logical decision given the charges already laid against his son.
Fyfe v. Bassett, [2012] I.L.R. ¶M-2632
Defendants Not Permitted To Reopen Trial To Address Contributory Negligence
Supreme Court of British Columbia, September 19, 2012
The plaintiff sought damages for injuries sustained in a motor vehicle accident. The issues of liability and quantum
were severed. The Court issued reasons for judgment on liability on April 23, 2012, after a three-day trial; liability was
apportioned 90% to the defendant Fichten and 10% to the defendant Bahniwal. The order had not yet been entered
when counsel for the defendants submitted that there had been an oversight and that the issue of contributory
negligence should have been addressed at trial. In this regard, they produced evidence that at the plaintiff’s
examination for discovery, she admitted that she had not been wearing a seat belt. The plaintiff did not testify at trial.
The defendants’ application was dismissed. The reasons for judgment stated that there was no allegation of
contributory negligence against the plaintiff, but Bahniwal did in fact allege in his pleadings that the plaintiff was
contributorily negligent in failing to use her seat belt. The Court found that it had discretion, after the judgment but
before an order was entered, to permit reopening a trial. However, the Court found that the defendants had their
opportunity at trial to raise the defence of contributory negligence. They failed to show that there would be a
miscarriage of justice if the trial was not reopened. Although the plaintiff had admitted she was not wearing her seat
belt, there was no evidence regarding her injuries before the Court that could possibly change the result of the trial.
The Court also found that it was likely the trial would have been conducted differently if the issue of contributory
negligence had been pursued, and it would be unfair to the plaintiff to re-open the trial on liability at this point. The
Court noted an additional complication: a different judge would have to hear the matter, as the judge had now retired
from the court.
Matheson v. Fichten, [2012] I.L.R. ¶M-2633
Court Permitted Extension of Time for Service Due to Erroneous Affidavit
Court of Queen’s Bench of Alberta, September 27, 2012
The defendant Reimer was noted in default in two actions. The actions involved a motor vehicle accident that killed E.
Sanderson and permanently injured the plaintiff Lowe. The accident allegedly occurred after some stunt and race
driving involving two motor vehicles, one of which was driven by Reimer. The plaintiffs had relied on the erroneous
affidavit of a process server who swore he had served Reimer with the statements of claim in both actions. It had since
been determined that someone other than Reimer had been served. Reimer provided evidence that he had moved from
the address of service several months before service, and he did not learn of the existence of the two claims until
almost two years later. He brought this application to set aside the default and strike the statements of claim against
him, or in the alternative grant him leave and extend the time to permit him to file statements of defence.
The application was allowed in part. The Court noted that there was no suggestion Reimer was evading service or was
unavailable to be served. There was also no suggestion of bad faith on the plaintiffs’ behalf. Various issues were raised.
The statement of claim had expired, but the Court determined that it had the discretion to renew it. Regarding the
Praecipe to Note in Default, the Court found it should be set aside, as it was entered without proper service being
effected. Finally, the Court analyzed whether it should exercise its discretion in the circumstances before it. The Court
found that there was no general equitable or discretionary power to bypass the rules and permit the renewal of a
statement of claim when the statutory provisions were not met, but there remained the general exception in
Rule 3.27(1)(c). The Court concluded that it would exercise its discretion to permit an extension of time for service of
the statements of claim for a period of 30 days from the date of entry of this judgment, and Reimer would have a
further 30 days to file a defence.
Sanderson Estate v. Potter, [2012] I.L.R. ¶M-2635
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CANADIAN INSURANCE LAW REPORTER
Other Motor Vehicle Tort Decisions
●
Plaintiff Did Not Establish There Was Reasonable Belief That Claim Would Be Resolved by Agreement
Gildart v. Minhas, [2012] I.L.R. ¶M-2628, New Brunswick Court of Queen’s Bench, Trial Division (September 17, 2012)
●
Plaintiff Required To Litigate in Jurisdiction Where Accident Occurred
Misyura v. Walton, [2012] I.L.R. ¶M-2629, Ontario Superior Court of Justice (September 25, 2012)
●
Vehicle Owner Not Vicariously Liable as Public Park Was Not a “Highway”
Persaud v. Suedat, [2012] I.L.R. ¶M-2630, Ontario Superior Court of Justice (September 17, 2012)
●
Plaintiff Did Not Have Reasonable Quality of Life; Court Awarded $250,000 in General Damages
Yick v. Johnson, [2012] I.L.R. ¶M-2634, Supreme Court of British Columbia (October 9, 2012)
●
Plaintiff Was Permitted To Add City as Defendant Outside Limitation Period
Middelaer v. Berner, [2012] I.L.R. ¶M-2636, Supreme Court of British Columbia (October 4, 2012)
Torts — General
Minor Permitted To Proceed Anonymously in Pursuit of Cyberbully; Lower Courts
Erred in Failing To Consider Objectively Discernable Harm
Supreme Court of Canada, September 27, 2012
A 15-year-old girl appealed the decision of the Nova Scotia Court of Appeal upholding the denial of her request for
permission to anonymously seek the identity of the creator of a Facebook profile that posted her picture and made
unflattering commentary about her. The profile also listed other particulars that identified her and made sexually
explicit references. The girl sought the information to identify potential defendants in an action for defamation and also
sought a publication ban on the content of the profile. The lower court granted the order requiring the Internet service
provider to disclose the information about the publisher of the fake profile, but denied the request for anonymity and
the publication ban. That decision was upheld by the Court of Appeal. The girl appealed again.
The appeal was allowed in part. The Court held that both lower courts erred in failing to consider the objectively
discernible harm to the girl. Although evidence of direct, harmful consequence to an individual is relevant, the courts
can also determine that there is an objectively discernible harm. The Court found that the girl should be entitled to
proceed anonymously, but once her identity had been protected, there was no reason for a further publication ban
preventing the publication of the non-identifying content on the fake Facebook profile.
The girl’s privacy interests were tied both to her age and to the nature of the victimization she sought protection from.
This was not simply a question of her privacy but of her privacy from the “relentlessly intrusive humiliation of
sexualized online bullying.” The recognition of the inherent vulnerability of children has consistent and deep roots in
Canadian law. In the context of sexual assault, the courts have already recognized that protecting a victim’s privacy
encourages reporting by victims. It was not a great analytical leap to conclude that a child would be more likely to
protect himself or herself from bullying if the protection could be sought anonymously. Therefore, if the right of
children to protect themselves from bullying is valued, the appellant’s anonymous pursuit for the identity of her
cyberbully should be allowed. However, there was little justification for a publication ban on the non-identifying
content of the profile; not including these elements in the publication ban would permit the public’s right to open
courts and press freedom to prevail.
A.B. v. Bragg Communications Inc., [2012] I.L.R. ¶G-2470
Plaintiffs Permitted To Amend Originating Notice Despite Previous Dismissal
Court of Queen’s Bench of Alberta, September 17, 2012
The plaintiffs were a minor and his mother who pursued the defendants in a medical malpractice action. In April 2008,
the plaintiffs sought registration of a Montana judgment in Alberta, pursuant to the Reciprocal Enforcement of
Judgments Act. The Court heard the application in April 2009 and dismissed it in September 2009. The decision was
not appealed. The plaintiffs then pursued a debt action that was ultimately decided in the defendant’s favour. The
plaintiffs now sought to amend the originating notice filed in April 2008 to add the debt claim. They submitted that
the Limitations Act clearly indicates that the defendant could not object on the basis of passage of limitation periods
when an otherwise statute-barred claim is added to a proceeding that was commenced within the applicable limitation
period, so long as the claim is related to the conduct, transaction, or events described in the original pleading in the
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CANADIAN INSURANCE LAW REPORTER
proceeding.
The application was allowed. The Court noted that the plaintiffs’ claims against the defendant had never been
adjudicated: the plaintiffs obtained a default judgment in Montana, and the 2009 Alberta proceedings dealt with the
issue of whether the defendant had a substantial connection to Montana when the proceedings against her in Montana
were commenced. In addition, the dismissed debt action dealt with the limitation period for suing on the debt. As a
result, the main action was “alive.” It was commenced in 2008, and at that time the applicable period for dismissal for
delay was five years. The Court concluded that, considering the actual wording in the originating notice, it could not be
said that everything contemplated by the originating notice had been litigated. There was therefore no technical reason
pursuant to the Rules of Court to bar the plaintiffs’ claim for “further relief” pursuant to their originating notice. The
Court also stated that the plaintiffs were not seeking to re-open the judgment, nor were they attempting to circumvent
an appeal. Res judicata, issue estoppel, and cause of action estoppel were not, according to the Court, affected by or
applicable to this decision. Finally, the Court found that the defendant was not prejudiced by the application.
Laasch v. Turenne, [2012] I.L.R. ¶G-2471
Other General Tort Decisions
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Preservation Order Granted for Life Insurance Proceeds That Were Subject of Forfeiture Action
Ontario (Attorney General) v. $51,000.00 In Canadian Currency (In Rem), [2012] I.L.R. ¶G-2472, Ontario Superior
Court of Justice (September 14, 2012)
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Defendant Not Entitled To Avoid Settlement Agreement
Lahti v. Pitka, [2012] I.L.R. ¶G-2473, Queen’s Bench for Saskatchewan (September 26, 2012)
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Nothing Escaped From Defendant’s Parking Lot To Cause Plaintiff’s Slip and Fall on Adjacent Sidewalk
Shane v. 3104854 Nova Scotia Ltd., [2012] I.L.R. ¶G-2474, Supreme Court of Nova Scotia (September 17, 2012)
CANADIAN INSURANCE LAW REPORTER
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CANADIAN INSURANCE LAW REPORTER
Published monthly as the newsletter complement to the Canadian Insurance Law Reporter by CCH Canadian Limited. For
subscription information, contact your CCH Account Manager or call 1-800-268-4522 or 416-224-2248 (Toronto).
For CCH Canadian Limited
Brenna Wong, BA, Editorial Team Leader
Legal and Business Markets
(416) 224-2224, ext. 6227
email: Brenna.Wong@wolterskluwer.com
Allison Lau, Marketing Manager
Legal and Business Markets
(416) 224-2224, ext. 6153
email: Allison.Lau@wolterskluwer.com
Rita Mason, LLB, Director of Editorial
Legal and Business Markets
(416) 228-6128
email: Rita.Mason@wolterskluwer.com
Editorial Board
Katja Kim, LLB, Contributor
© 2012, CCH Canadian Limited
Notice: This material does not constitute legal advice. Readers are urged to consult their professional advisers prior to acting on the basis
of material in this newsletter.
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