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Wednesday, April 15, 2015


You’ve been involved in a Hit and Run Accident.  What do you do?

You’ve been in an accident, and before you have time to get the information from the driver that hit you, or write down their licence plate number, the other driver leaves the scene.  What do you do now? In cases involving a hit and run, if you want to make a claim for compensation, the Insurance (Vehicle) Act R.S.B.C. 1996, c.231 requires you to make “all reasonable efforts” to ascertain the identity of the unknown driver.

Specifically, section 24(5) of the Act states:

(5) In an action against the corporation as nominal defendant, a judgment against the corporation must not be given unless the court is satisfied that
(a) all reasonable efforts have been made by the parties to ascertain the identity of the unknown owner and driver or unknown driver, as the case may be, and
(b) the identity of those persons or that person, as the case may be, is not ascertainable.
So what does this actually mean?  What do you have to do to show you’ve taken “all reasonable efforts”?  There are many cases from the British Columbia Supreme Court that address what steps need to be taken to satisfy this requirement.  The whole point of taking steps to identify the driver and the other vehicle is of course so you know who to bring your claim against for property damage or injury because of the collision.  Common examples of steps that the Court has found to be reasonable include:

1) Interviewing witnesses and canvassing the neighbourhood for witnesses;

2) Canvassing local shops for surveillance cameras who may have captured the other vehicle on film;

3) Posting signs at the scene of the accident asking for people to call you if they saw the accident;

4) Re-visiting the scene of the accident at the same time of day to see if you can identify the vehicle;

5) Posting advertisements in the newspaper or online asking witnesses to come forward; AND

6) Contacting the police immediately and providing them with any and all information that may be used to identify the other vehicle.

All of this seems like a lot of work, and it is.  The rationale behind section 24(5) of the Insurance (Vehicle) Act was set out by the British Columbia Court of Appeal in Leggett v. Insurance Corporation of British Columbia (1992), 72 B.C.L.R. (2d) 201, 11 C.C.L.I. (2d) 10:

[9]        The section provides a means by which a person who has suffered injury or property damage in a motor vehicle accident may obtain compensation from the government insurer even though the driver said to be at fault, and the owner of the vehicle which was being driven by that person, are insured in another jurisdiction or not insured at all, even though the corporation will, in any event, be unable to look to the other driver for assistance in resisting the claim, and even though the corporation will be unable to obtain reimbursement in the event the other driver is uninsured or there has been a policy breach, or to obtain contribution by way of increased premiums through forfeiture of the other party's 'safe driving' discount. As the trial judge recognized, protection against fraudulent claims is only one of the purposes of the requirement that the claimant show inability to identify the other driver and owner as a condition of being able to claim under the section. In my view the overall purpose of the section is to limit the exposure of the corporation to claims brought by persons who, in the matter of seeking to identify those responsible for the accident, have done everything they reasonably could to protect what ordinarily would be their own interests, and which, by virtue of the section, become the interests of the corporation.
[10]      The corporation's exposure under the section is limited to claims brought by those who could not have ascertained the identity of the parties responsible. It does not, in my view, extend to claims by those who have chosen not to do so.
[11]      I do not think the words "not ascertainable" should be strictly interpreted, so as to mean "could not possibly have been ascertained". I think they are to be interpreted with reference to subsection (5) so as to mean "could not have been ascertained had the claimant made all reasonable efforts, having regard to the claimant's position, to discover them". Where a person knows that he or she has been involved in a motor vehicle accident, but refrains even from recording the licence number of the other vehicle, when that number is visible and the claimant could, had he or she wished, reasonably have recorded it, such a claimant must, in my view, find it particularly difficult, and probably impossible, to establish that he or she made all reasonable efforts to discover the identity of the owner and driver of that vehicle for the purposes of the section.
[12]      The test seems to me to be subjective in the sense that the claimant must know that the vehicle has been in an accident and must have been in such a position and condition that it would be reasonable for the claimant to discover and record the appropriate information. But the claimant cannot be heard to say: "I acted reasonably in not taking the trouble to find out".
[Emphasis in original.]
If you can prove that you have taken “all reasonable efforts”, then you have a valid claim with ICBC as nominal defendant for the unidentified vehicle.  However, what happens if you haven’t done anything to identify the other vehicle, or only did one or two things to identify the vehicle?  To be safe, the more steps that you take the better, but in the decision of Mr. Justice Saunders in Abdi v. Leigh, 2012 BCSC 2218, he interpreted the Court of Appeal’s reasons in Leggett to mean the following:

[9]             I do not find, on reflection, that Justice Taylor's explanation of the purpose of the statute in that case assists in determining ICBC's liability in a case in which the plaintiff has not made reasonable efforts from a subjective point of view, but where at the same time the court can be satisfied on evidence from other sources that the plaintiff's failure to take such steps had no material effect; satisfied, that is, that there is no reasonable possibility of ICBC having been prejudiced.  That, in my view, is the situation of the plaintiff in the present case.

He goes on to state:

[20]         It is, I find, sufficiently established on the evidence that no witness saw or likely would have been able to see anything that would have assisted in establishing the identity of the driver.  I therefore find that there is no reasonable possibility of the driver's identity having been ascertained on the basis of the information that was or reasonably ought to have been available.
[21]         In Leggett, Mr. Justice Taylor said that the purpose of s. 24(5) is to limit the exposure of ICBC to claims brought by persons who have done everything they reasonably could  to ascertain the identity of the unknown driver.  With the greatest of respect, that statement seems to me to be as much a description of an effect of the statute as its purpose.  That formulation does nothing to reveal the purpose that lies behind limiting recovery to such persons.
[22]         It cannot have been an arbitrary decision on the part of the Legislature to impose this limitation on the class of persons entitled to bring unidentified driver claims. And surely, the requirement was not put in place by the Legislature solely as a test of a claimant's moral fibre, that is, their willingness to go to some lengths to uncover information.
[23]         In my view, it must be the case that the deeper purpose of s. 24(5) is to ensure that there is no reasonable possibility of ICBC being prejudiced through a claimant's inaction, either by being exposed to a fraudulent claim, or by being deprived of the ability to identify the responsible driver, or for any other reason. I find no such reasonable possibility of prejudice in the present case.
[24]         To look at the statute another way, the requirement of reasonable steps being taken has both subjective and objective components to it.  The subjective aspect allows us to take into account a claimant's personal circumstances.  The objective aspect allows us to account not only for the objectively reasonable behaviour of persons in the claimant's circumstances, but also for the actual circumstances which were beyond the claimant's knowledge but which the court now knows of through other evidence.
[25]         Given our knowledge of what the witnesses in fact had to say, in my view it would be manifestly unfair to deny the plaintiff a right of recovery against ICBC.  I can see no legitimate purpose that would be met in doing so.  I find the requirements of s. 24(5) to have been satisfied in this case.
In short, despite the fact that the plaintiff in Abdi v. Leigh took essentially no steps to identify the vehicle that caused the accident, Mr. Justice Saunders found that because there was evidence from witnesses that there was another vehicle involved but they could not identify it, even if Ms. Abdi had made “all reasonable efforts” to identify the other vehicle, they would have been made in vain, and therefore the requirements of s. 24(5) were satisfied.

It remains to be seen if the reasoning of Mr. Justice Saunders will be carried on in other decisions and his decision has not been cited in other decisions to date, however, if his reasoning is adopted moving forward a critical consideration of the Courts in the future should be whether or not the steps taken by the plaintiff to identify the hit and run vehicle were likely to result in the vehicle being identified.

As it stands, to be safe and to ensure your rights are protected, if you are involved in a hit and run collision the first thing you should do is contact a lawyer to provide guidance specific to the circumstances of your case.  The requirements for “all reasonable efforts” based on cases in the past to identify the other vehicle include the 6 steps listed above.

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Monday, January 26, 2015

No Adverse Inference when Clinical Records Disclosed to the Defence and Provided to Experts

During the usual course of a personal injury action an injured plaintiff may be treated by one or more medical professionals. Those professionals typically maintain clinical notes of each visit. If a matter proceeds to trial and the plaintiff elects not to call the treating physician, for example, the lawyer hired by ICBC may ask the court to draw what is termed an “adverse inference”, meaning they ask the court to make a finding that the plaintiff elected not to call that treating physician because had that doctor actually attended court to testify, they would have likely given unhelpful information. Such an unfavourable finding of the court would likely hurt one’s case at trial, to some degree.
This issue arose in the recent decision Beggs v. Stone, 2014 BCSC 2120. Ms. Beggs was a plaintiff who suffered various soft tissue and psychological injuries following a 2009 motor vehicle collision. At trial the plaintiff did not call as witnesses some treating professionals. The plaintiff did however advance various other expert medical opinion evidence. The defence lawyer asked the trial judge to correspondingly draw an adverse inference because of this. Mr. Justice N. Smith declined to do so placing particular emphasis on the fact that the plaintiff had disclosed to the defence her clinical records from the relevant treating professionals and these records were subsumed into the experts’ analyses. 

The Court stated as follows:
[22]         Counsel for the defence seeks an adverse inference from the plaintiff's failure to call the family physician who treated her before and in the year following the accident and more particularly the psychologists who treated her both here and in Winnipeg after the accident. The factors for drawing an adverse inference are set out in Buksh v. Miles, 2008 BCCA 318, at para. 35. These include the evidence before the court, the explanations for not calling the witness, the nature of the evidence that could be provided, the extent of disclosure of the witness's clinical notes and the circumstances of the trial. 
[23]         In declining to draw an adverse inference, I place particular emphasis on the fact that the clinical records of all of these professionals were disclosed to defence counsel and were reviewed by all the experts who gave their opinions in part based upon those records. The plaintiff's pre-accident condition and post-accident progress are well documented, and there is nothing to suggest that there is anything in those records that contradicts anything that the doctors who have testified have stated.
All said, the proper disclosure of relevant clinical records has the potential to hinder a defence plea that the court draw an adverse inference should a treating professional not be called as a witness at trial.  

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Monday, November 24, 2014

Exacerbation of Pre-Existing Degenerative Neck Changes Garner $75,000 Award for Non-Pecuniary Damages

In McCartney v. McArthur, 2014BCSC 2164, the plaintiff had suffered of pre-existing pain symptoms, with flares of stiffness and limited range of motion at times. His car was rear-ended while stopped in traffic, pushing him into the car ahead of him, causing significant exacerbation of these prior injuries, as well as soft tissue injury to his neck, left shoulder area, left paraspinal muscles, and the dorsal area.

The majority of the medical experts opined that the plaintiff had experienced age-related degenerative changes which pre-dated the collision. He had been seeing a chiropractor on a regular basis for two years preceding the accident, and some of the experts were of the opinion that the plaintiff would have continued to require chiropractic treatment even if the accident had not occurred. Nevertheless, the accident caused aggravation of these changes, leading to increased pain and decreased functioning. No evidence was presented, which would suggest that the plaintiff’s pre-existing symptoms restricted his ability to carry out his regular employment, or household maintenance duties, There was, however, considerable evidence showing this not to be the case.

On the expert evidence tendered at trial, the Court found:
[67]       The plaintiff testified that his primary problem since the accident is the pain in his neck that arises when his neck is in certain positions such as looking up. He also experiences pain in his left shoulder from time to time. The medical experts generally agree that there were degenerative changes in the plaintiff’s neck prior to the accident and they may have been somewhat responsible for the pain he now suffers but may not have caused him any pain before the accident. They generally agree that the accident aggravated the plaintiff’s pre-existing neck problems. 
[69]        I am satisfied that the defendant’s negligence, which has been admitted, contributed to the injuries complained of by the plaintiff. While the plaintiff’s pre-existing condition resulted in symptoms in his neck area that had some similarity to those he experienced after the accident, the degree of pain experienced by him clearly increased after the accident and, I find, became chronic in nature. In particular, Dr. Gittens testified that the plaintiff’s pre-existing condition, involving some degenerative changes in his spine, was aggravated by the accident. He said that his pain, which he described as neuropathic, occurs after the underlying trauma has resolved and is extremely difficult to resolve. He said it may be a permanent condition. In my view the evidence establishes that the symptoms suffered by the plaintiff after the accident were different and worse than before the accident. His neck condition was significantly aggravated by the accident.

In awarding damages in the amount of $75,000 for pain and suffering, the Court noted:
[72]        In my view, there is no measurable risk that the pre-existing condition of the plaintiff would have resulted in the symptoms experienced by him after the accident. 
 
[76]        I have concluded that the plaintiff suffered aggravation to his neck pain as a result of the accident and his pain has become chronic in nature. For the first time, the pain that the plaintiff suffers imposes some functional limitations on him. 
[77]      The evidence also establishes that the plaintiff went from an outgoing pleasant person to someone who was easily irritated by other people. This has interfered with his ability to work effectively as a cabinet salesman. 
[78]    I am satisfied that the accident has negatively affected the quality and enjoyment of the plaintiff’s life and that may continue indefinitely. He will likely continue to suffer pain, together with the associated deleterious effects on his enjoyment of life. 
[79]      After considering the relevant case law referred to by counsel and keeping in mind that the award in each case is very dependent upon the unique facts of the case, I award the plaintiff $75,000 in non-pecuniary damages.

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Tuesday, November 18, 2014

Interest Expenses Not Recoverable as Disbursements Following Litigation

This week, the Court of Appeal for British Columbia released reasons regarding an appeal from an order from the BC Supreme Court, which concerned whether or not out-of-pocket interest payments incurred to finance disbursements are recoverable as disbursements.


In MacKenzie v. Rogalasky, 2014 BCCA 446, the Court of Appeal heard argument concerning two cases in which the recovery of disbursements, pursuant to  Rule 14-1(5) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 (the “Rules”), was in question. Under that Rule, a registrar, when assessing costs, may award “a reasonable amount” for disbursements that “have been necessarily or properly incurred in the conduct of the proceeding”.

The Court summarized the issue of incurred interests, stating:
[4]        Litigants, whether plaintiffs, defendants, third-parties, petitioners or respondents, may find themselves incurring interest expenses in a variety of circumstances. They may personally take out a loan to fund the disbursements incurred in prosecuting or defending a proceeding. Alternatively, they may take advantage of financing arrangements to fund disbursements put in place by their law firms. The record in these appeals describes arrangements, for example, in which personal injury law firms uses lines of credit often provided by lenders specializing in funding disbursements. Those lines of credit may be secured by the assets of the firm or the personal assets of the principals of the firm. The law firm uses the line of credit to fund disbursements (and perhaps other costs of doing business) but the client agrees with the law firm (and perhaps directly with the lender) to be responsible for both principal and interest on disbursements recovered in the action. In the Chandi appeal, for instance, the plaintiff borrowed both from his solicitors and from a third-party lender to fund disbursements, thereby incurring interest obligations. The plaintiff in the MacKenzie appeal also borrowed money from a third-party. Interest may be incurred as an out-of-pocket expense in other circumstances, as well. For example, a party may incur interest costs on unpaid invoices for services provided in the conduct of litigation, such as interest on the cost of an MRI, as in Milne, or an expert’s fees. 
[5]        It may be surprising that the issue before us has not been authoritatively settled in this Province. Whether the question is open, as the appellants suggest, because it has been conventional wisdom until recently that interest is not a disbursement or because, as the respondents contend, it is only recently that financing litigation has become so difficult and expensive that there is an economic incentive to seek to recover interest costs, is a matter of speculation. The fact is that the question is open and there is a surprising dearth of authority that assists in answering it.The Court, per Mr. Justice Harris, stated that the resolution of the issue lies in the correct interpretation of the applicable Rule, as read “in the context of the purposes of the costs regime and the general legal environment governing recovery of pre-judgment interest, including the Court Order Interest Act, R.S.B.C. 1996, c. 79 (the “COIA”)”.
The applicable Rule 14-1(5) regarding recovery of disbursements is as follows:
(5)When assessing costs under subrule (2) or (3) of this rule, a registrar must
(a) determine which disbursements have been necessarily or properly incurred in the conduct of the proceeding, and(b) allow a reasonable amount for those disbursements.
The context in which an out-of-pocket expense is incurred, is essential to the propriety of that expense being recoverable following litigation. But, as the Court points out, the interpretation of the term “disbursement” and the phrase “incurred in the conduct of the proceeding” limit the scope of recoverable expenses, and the question becomes one of whether an expense is recoverable only by reason of its being incurred due to necessities arising directly from the legal and factual issues inherent in the particular litigation, rather than from the circumstances of the litigant, or whether any reasonable out-of-pocket expense incurred by a litigant, due to the litigation, is recoverable as a disbursement, provided it was “necessarily or properly incurred”.

In concluding that out-of-pocket interest expenses are not recoverable disbursements, the Court stated:
[8]        On the former view, inherent in the word “disbursement” used in the context of cost recovery and in the phrase “incurred in the conduct of the proceeding” are limits that qualify the scope of recoverable disbursements by requiring a connection between what is necessarily, properly, or inherently involved in the conduct of the litigation in the sense of what is required to prove or disprove a case. By contrast, the latter view captures expenses that may be necessary, not in the conduct of the case as such, but by reason of the particular circumstances of the litigant. On this view, a reasonable amount of any out-of-pocket expense that was incurred during the course of a proceeding, regardless of the underlying reason why it was incurred, is recoverable, subject only to a determination by a registrar that it was proper or necessary to incur it. Accordingly, it is irrelevant whether the expense was incurred because of the impecuniosity of the litigant, rather than arising directly from the issues engaged in the proceeding.
Essentially, the term “disbursement” is not defined, and for that reason, the Court turned to the ordinary rules of statutory interpretation, taking into account the entire context of the term’s usage. From this analysis, the Court concluded the following:
[52]      First, I consider what guidance is provided by the ordinary meaning of the word “disbursement”. I conclude that the ordinary meaning of the word is not decisive, but requires interpretation in the context of the common law and statutory changes to the common law over time. I observe, however, that case law does intimate that the core meaning of the word “disbursement” refers to the expenses arising directly from the issues in the case, rather than the circumstances of the litigant. 
[53]      Second, I consider legislative changes to the common law governing the recovery of disbursements and prejudgment interest. I conclude that that history militates against concluding that the legislature intended Rule 14-1(5) to permit recovery of interest expenses as a disbursement. 
[54]      Third, I interpret Rule 14-1(5) in the context of the purposes of a costs regime drawing on and applying the principles laid out by the Supreme Court of Canada in Walker. The purpose of a costs regime reinforces the interpretation that out-of-pocket interest expenses are not recoverable.
Following, extensive discussion on each of the first two points, the Court turned to the third conclusion drawn, discussing the role of recoverable expenses against the purpose of a costs regime:
[77]      The conclusion that out-of-pocket interest expenses are not recoverable is supported by the wording of the rule from time to time and the purposes of a costs regime in the justice system. 
[78]      In my opinion, the various iterations of the rule set out above permitting recovery of expenses focuses most naturally on the exigencies inherent in the particular litigation rather than capturing expenses arising from the financial circumstances or other choices of a party. Embedded in the rule is the requirement for a causal connection between the issues in the case and the expense incurred to prove or disprove them. 
[79]      The rule, in its current form, permits the recovery of “disbursements … incurred in the conduct of the proceeding”. In my view, quite apart from the language “incurred in the conduct of the proceeding” the term “disbursement”, when used in the context of a costs rule that relates to the taxation of costs in particular litigation, does contain limits that narrow its potential broad applicability. It appears to me that the purpose of permitting the recovery of disbursements in the context of a costs regime is to permit the recovery of those expenses that arise inherently and directly from the issues in the case which relate, as the appellants suggest, to the direction, management, or control of litigation and which pay for materials and services used to prove a claim or defence. These expenses arise directly from the nature and conduct of the allegations in a proceeding. By contrast, interest expenses do not arise from the nature of the allegations or the conduct of proceedings, they arise from unrelated causes including the financial circumstances of a party. In my view, as such, they do not fall within the meaning of the word “disbursements” in the context of a costs rule. 
[80]      It will be apparent that the conclusion I have reached does not depend on limiting the applicability of the word “disbursements” by reference to the phrase “incurred in the conduct of the proceeding”. I consider that the meaning of the words “disbursement” or “expense” has always excluded out-of-pocket interest expenses. The addition of the phrase “incurred in the conduct of the proceeding” in the rule in 1990 did not narrow or change the meaning of the word “disbursement” or otherwise limit its application. Rather, the phrase reinforces and confirms what has always been the case. To be recoverable a disbursement must arise directly from the exigencies of the proceeding and relate directly to the management and proof of allegations, facts and issues in litigation, not from other sources. In my view, that is what is captured by the phrase “the conduct of the proceeding”. 
[81]      In my opinion, this interpretation of the rule flows naturally from the purposes of a costs regime and the guidance provided on that subject by the Supreme Court of Canada, most particularly in Walker. Several points emerge which assist in interpreting the rule. The first is that a costs regime serves multiple functions, only one of which is indemnification. Even in respect of that function, the costs regime provides only partial, and not full, indemnity to a successful party. Accordingly, one is not compelled to conclude that interest expenses must be recoverable because the purpose of the rule is to make a successful party whole. To the contrary, partial indemnification underlies both the recovery of costs on a tariff and disbursements (because the reasonable amount awarded may not fully indemnify the cost of necessary or proper disbursements). 
[82]      Second, within the context of partial indemnification, costs awards should be predictable and consistent across similar cases. Only if this is the case can parties accurately assess the risks of engaging in litigation and make rational decisions about settling or prosecuting the case. Recognizing interest expenses as recoverable disbursements is inconsistent with this objective because exposure to costs and disbursements would not depend on the nature of the case itself, but on the particular circumstances of a party. These circumstances may well involve the relationship between the party and counsel and be matters the opposing party has no right to know. 
[83]      Third, although costs regimes may affect access to justice, the Supreme Court has made it clear that costs are not the means of securing access to justice, except in exceptional circumstances. Of this more below. 
[84]      Finally, costs awards relate to the particular case and are made as between the successful and the unsuccessful parties. On the facts of these appeals, it seems reasonable to infer that recognizing interest as an expense would lead to a transfer of resources between classes of parties in which unsuccessful defendants are exposed to the risks of paying high interest rates designed to pay for the cost of lending money, not just to the successful party in the case but other plaintiffs who receive financing but may not recover moneys to pay for their loans. I expand on this concern a little later in these reasons. 
  

[91]      More telling, in my view, is the function of the costs regime in providing predictability and consistency in costs awards that allow parties rationally to assess the risks of litigation and to guide their conduct accordingly. There can be little doubt that recognizing interest as a disbursement would undermine that purpose since costs awards would vary not according to the nature of the case, but according to the financial circumstances of a successful party. Moreover, the proposition that an unsuccessful party should pay roughly similar amounts across similar cases would be undermined if interest expenses counted as disbursements. This follows not only because the amount of interest paid depends on the financial circumstances of the litigant, but it may also follow for other reasons unconnected to the issues in the case. 
[92]      It is apparent from the record that the interest rates charged to successful plaintiffs by lenders are high relative to prevailing interest rates. It is reasonable to infer, given that the lender’s recourse is limited to the settlement or judgment amount, that the interest rate charged by lenders reflects the risk they carry on loans to unsuccessful plaintiffs. Accordingly, if one were to assume that the interest rates are reasonable in light of the portfolio of risk, the effect of recognizing interest expenses as a disbursement is that the cost of financing a portfolio of successful and unsuccessful plaintiffs’ cases is being transferred to unsuccessful defendants. Unsuccessful defendants are not required to subsidize unsuccessful plaintiffs’ cases or the costs of running a plaintiff’s side personal injury practice. In my view, this result is not consistent with ensuring that costs awards are specifically referable to costs incurred in the particular litigation itself. I see no obvious way that registrars could be expected to eliminate the “subsidy” component inherent in these financing arrangements.
For the reasons noted, the Court allowed the appeal, setting aside the orders of the Supreme Court and of District Registrar Cameron, restoring the order of Registrar Sainty, stating:
[93]      I conclude that an out-of-pocket interest expense incurred to finance disbursements is not a recoverable disbursement under Rule 14-1(5). I acknowledge that this result is likely inconsistent with the position in New Brunswick and possibly Ontario. To the extent that this is the case, I am respectfully, and for the reasons set out above, unable to agree with the conclusion those courts reached



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Wednesday, November 12, 2014

Payments by Joint Tortfeasors Are Deductible From Vicarious Liability Obligations of Lessors

Last week, the Court of Appeal for British Columbia released reasons in the case of Stroszyn v. Mitsui Sumitomo Insurance Company Limited, 2014 BCCA431.

The case involved a plaintiff, Edward Stroszyn, who had suffered injuries as a result of a 2008 motor vehicle accident, where he was struck by a vehicle that had been leased by Honda Canada Finance Inc. (“Honda”).  Honda is insured pursuant to a policy of excess insurance, to a limit of $9,000,000, issued by Mitsui Sumitomo Insurance Company Ltd. (“Mitsui”). The parties had reached a settlement agreement, whereby Mr. Stroszyn would receive the sum of $1,600,000 for his damages suffered. ICBC paid out the $1,000,000 policy limit of the negligent driver, Jason Chen, and his mother, the vehicle lessee, Mary Chen. Two questions regarding the remaining $600,000 sum were then put to the BC Supreme Court, by way of a Reference Agreement between the parties, resulting in a petition pursuant to Supreme Court CivilRule 2-1(2)(c).

1)  The first question sought to determine whether the lessor, Honda, was liable to pay any amount in excess of the $1,000,000 paid by ICBC.

2)  The second question sought to determine whether the defendants, Mr. Chen and Ms. Chen, were insured under Mitsui’s $9,000,000 policy, thus obliging Mitsui to pay the balance of the agreed damages.

In Chambers, Mr. Justice Bowden found that Honda’s liability to pay a “Lessor Damages Cap” of up to $1,000,000, under s82.1(2) of the Insurance (Vehicle) Act (“I(V)A”), which governs the limits of a lessor’s vicarious liability, was not reduced by payments made by ICBC, and found that Mr. Chen was not an insured under Honda’s policy coverage through Mitsui.

Both orders were appealed.

On appeal, the petitioner, Mr. Stroszyn, took the position that the “Lessor Damages Cap” is in excess of payments made by or on behalf of the lessee or the driver, while Mitsui’s position was that the payment of a portion of a judgment by any party that is jointly and severally liable with another has the effect of discharging the liability of all, and that being the case, the payment of $1,000,000 to the petitioner discharges all parties jointly liable to the full extent of the payment.

The Court found, with regard to these positions:
[22]        The sole question before us, as I see it, is whether the payment by ICBC wholly discharged Honda from its vicarious liability, or whether there is any basis upon which the Court can, and should, attribute only a portion of the payment to Honda and regard that payment as partially discharging Honda’s statutory liability. 
[23]        The petitioner submits that, in the unusual circumstances of this case, where the liability of one of several parties jointly and severally liable for the damages is limited by statute, the Court should allocate the payments made in settlement of the claim to each of the liable parties. The petitioner submits that, there being no basis for doing so otherwise than equally, the Court should consider onethird of the payment made to the petitioner by ICBC to have been made on behalf of Honda, reducing Honda’s liability to the petitioner by $333,333. After giving Honda credit for that portion of the ICBC payment, its residual liability under the statutory cap ($1.0 million less the $333,333 credit) would be sufficient to require it to pay the entire balance of the petitioner’s claim: $600,000. 
[24]        I see no basis in law for considering only a portion of the ICBC payment to have been made on behalf of Honda. In my view, each of the insureds in this case can regard the whole of the payment made by ICBC to have been made on his, her or its behalf and to have reduced its liability to the petitioner to the full extent of the payment. In the absence of a statutory provision limiting the lessor’s liability, all three would remain jointly and severally liable for the balance of the petitioner’s damages. However, the I(V)A having limited the lessor’s liability to $1 million, it is my view that the payment of $1 million to the petitioner on behalf of all insureds, including the lessor, completely discharges the lessor’s liability and leaves the other defendants jointly and severally liable for the balance of the damages. 
[25]        This must certainly be the case where the liability of Ms. Chen and Honda is entirely vicarious. Vicarious liability is discharged to the extent of any payment made in satisfaction of a plaintiff’s claim for damages. This is not a case where liability can be apportioned by degrees of blameworthiness, or severed. 
The Court pointed to the decision of Yeung (Guardian ad litem of) v. Au, 2006 BCCA 217, which discusses the statutory liability limits of lessors, under s86 of the Motor Vehicle Act, at [35]:
[35]      … The purpose of s. 86, then, is to extend liability as well to the owner in two situations - where the driver or operator is living with and as a member of the family of the owner, or where the driver or operator acquired possession of the vehicle with the owner's express or implied consent. Where these conditions are met, s-s. (1) deems the driver or operator to be the agent or servant of the owner, and to be driving or operating the vehicle in the course of his or her employment. Effectively, this makes the owner liable on common law principles of agency. Sub-section (2) clarifies that s-s. (1) does not relieve the driver or operator from liability, leaving open the possibility of recovery by an injured plaintiff from both the owner and the driver.
Mr. Justice Willcock ultimately found that Honda’s liability was reduced by payments made by ICBC, stating:
[28]        In the circumstances of this case, because the lessor is an insured under the ICBC policy, we need not determine whether the lessor’s liability is reduced by payments expressly made by or on behalf of lessees or drivers alone. The liability of the lessor is certainly reduced by payments made on its behalf by its insurer and I cannot see in the legislation an evident intention to treat payments made under the primary insurance policy as payments made on behalf of the tortfeasor alone and not payments equally made by the parties vicariously liable for his negligence and insured under the payer’s policy, as they would be at common law.
[34]        The statute is clear in limiting the liability of lessors. There is no ambiguity in the provisions in question that would justify reading into the legislation a provision that would have the effect sought by the petitioner.
In allowing the cross-appeal concerning Mr. Chen’s coverage status under the Mitsui policy, and declaring Mr. Chen to be an insured under that policy, the Court stated:
[38]        The provisions of the I(V)A require Mitsui to afford coverage to Ms. Chen and Jason Chen on the same terms and conditions as those in the ICBC certificate, unless Mitsui expressly limits the coverage it affords in conformity with the I(V)A. 
[39]        The I(V)A permits an insurer providing optional insurance coverage to prohibit a specified person or class of persons from using or operating the vehicle and to exclude such persons from coverage. The petitioner acknowledges Mitsui might properly prohibit Jason Chen from obtaining coverage under its policy. He argues Mitsui did not do so in accordance with s. 61 of the I(V)A. 
[40]        The petitioner says s. 61(2) prescribes how an insurer can exclude individuals or risks from the insurance provided under an optional insurance contract, or limit its exposure. In order to exclude anyone from the coverage afforded under its policy, Mitsui is required to print on the policy, in conspicuous lettering in a prominent place, the words that appear in s. 61(2): “This policy contains prohibitions relating to persons or classes of persons, exclusions of risks or limits of coverage that are not in the insurance it extends”. It did not do so. 
[41]        The chambers judge held that Mitsui could exclude Jason Chen from coverage notwithstanding the failure to include the words mandated by the I(V)A. The judgment is founded upon the view that the words of the policy would not have come to the attention of Jason Chen because it was “meant to protect insureds from exclusions or limits to coverage of which they may not be aware”. The omission of the mandated words was therefore considered to be immaterial. 
[42]        In my view, the failure to meet the statutory requirement precludes the insurer from reducing or altering the underlying coverage by writing limiting terms into the excess policy. The statute provides a means by which an insured may easily determine whether the coverage afforded under the lessor’s excess coverage differs from the underlying coverage. The wording required by the I(V)A is a measure of protection for all insureds. The exclusion of lessees and their agents from coverage is only effective if the mandated words appear on the policy; the exclusion is ineffective if the mandated words do not appear. That is so, whether or not the wording is brought to the attention of the insured. 
[43]        In Temple Sholom v. I.C.B.C. (1986), 1986 CanLII 810 (BC CA), 8 B.C.L.R. (2d) 130, 33 D.L.R. (4th) 231 (C.A.), this Court upheld the decision of Wood J. reflex, (1986), 70 B.C.L.R. 69 (S.C.), precluding an insurer from relying on provisions in an insurance policy where it had not printed words mandated by the Insurance Act (“This policy contains a clause which may limit the amount payable”) on the face of the policy. The insurer argued it had complied with the statute by printing the caution at a location reasonably proximate to the clause in question, so as to alert the insured to the existence of the clause when it would be most likely to be noticed. That argument was rejected as inconsistent with the deliberate choice of language by the legislature. An analysis of the effective notice to the insured was unnecessary. 
[44]        In response to the cross appeal, Mitsui says ss. 61(1.2) and (2) must be read together and that the wording described in subsection (2) is only necessary where the insurer seeks to rely upon a prohibition, exclusion or limit of a very narrow class. That class is said to be defined, in some manner, by subsection (1.2). In my view, that cannot be so. Subsection (1.2) prohibits an insurer from excluding certain persons from coverage or providing them with coverage to different limits or on different terms from those in the certificate or underlying policy. The obligatory wording set out in s. 61(2) is not necessary and would be ineffective to exclude any of the persons or risks described in subsection (1.2). The wording described in s. 61(2) is necessary with respect to all other permissible prohibitions, exclusions or variations in limits.
The Court, concluding, stated:
[45]        For those reasons, I would allow the appeal, set aside the order made in relation to the “lessor damages” issue, and substitute in its place the declaration sought by the appellant: that the payments made to the petitioner by ICBC have the effect of reducing the liability of Honda to the full extent of the payments made.
[46]        I would also allow the cross appeal, set aside the order made in relation to the “excess coverage” issue, and substitute in its place the declaration sought by the cross appellant: that Jason Chen is an insured under the Mitsui policy, subject to the same terms and conditions as contained in the underlying certificate.

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Friday, October 31, 2014

Defendant Bus Company Granted Leave to Withdraw Admissions of Liability and Negligence

Earlier this week, in the case of Finch v. Anderson, 2014BCSC 2008, reasons for judgment were released in an application to withdraw the defendants’ earlier admissions of negligence and liability.



The collision occurred when a bus operated and driven by the defendants rear-ended the plaintiff’s vehicle, which had been stopped in the bus lane on Highway 99 in Surrey, B.C., allegedly due to a failed engine. The defendant driver made a statement on the day of the collision, relaying his account of where the accident had transpired, and the circumstances leading up to the collision. The plaintiff made a report to ICBC immediately following the accident, and eleven days after the accident she gave a statement regarding the accident circumstances. The defendant corporation investigated the accident, resulting in an internal determination that the defendant driver improperly obstructed his view and failed to distance himself from a large truck that had been travelling in the lane next to him, just prior to the accident. On the basis of this internal report, an admission of liability was made.

During examination for discovery, the defendants learned of certain facts that were not known when the admission of liability was made. In their application, the defendants submitted that this evidence raised questions surrounding the circumstances of the plaintiff’s presence on the side of the highway, pointing to facts which now appeared to show that the plaintiff’s vehicle was not disabled and that she may have been pulled over for the purpose of taking or making a phone call, and revealed a discrepancy of approximately two kilometers regarding the accident location. Based on this evidence, the defendants argued that the plaintiff was in contravention of section 187 of the Motor Vehicle Act, and pointed to a number of BC Supreme Court and Court of Appeal ruling which found drivers stopped on a highway to be negligent.

Under Supreme Court Civil Rule 7-7(5), an admission in a pleading cannot be withdrawn other than by consent of with leave of the Court The applicable test was recently set out in Continental Steel Ltd. v. CTL Steel Ltd., 2014 BCSC 104:

[27]      With respect to applications under Rule 7-7(5)(c), the leave to withdraw an admission made in a pleading, the principles to be applied and the factors to be considered have been summarized and endorsed by the Court of Appeal in Munster & Sons Development Ltd. v. Shaw, 2005 BCCA 564 (CanLII) (at para. 10) as follows:
1. The test is whether there is a triable issue which, in the interests of justice, should be determined on the merits and not disposed of by an admission of fact. 
2. In applying that test, all the circumstances should be taken into account including the following:
a. the admission has been made inadvertently, hastily, or without knowledge of the facts. 
b. the fact admitted was not within the knowledge of the party making the admission. 
c. the fact admitted is not true. 
d. the fact admitted is one of mixed fact and law. 
e. the withdrawal of the admission would not prejudice a party. 
f. there has been no delay in applying to withdraw the admission.
In allowing the application, the Court stated:
[22]   Here whether the plaintiff was negligent is a triable issue. The admission, although not inadvertent, appears to have been made considering only the actions of the defendant driver and not the potential negligence of the plaintiff and without full knowledge of the facts. Although slim, there were facts raised on the examinations for discovery that highlighted the potential for such negligence. 
[23]  Clearly the admission is not a purely factual one - an admission of negligence and liability involves mixed fact and law. 
[24]   As to prejudice, the plaintiff suggested that she has been deprived of the ability to fully investigate the circumstances of the accident and that she would have done so promptly had she known liability would be disputed. 
[25] There were four independent witnesses to the accident that were identified by the defendant driver. Since the hearing of this application, I have been advised that three of those witnesses were in fact contacted by counsel for the plaintiff prior to this application. Although their memories may have faded, there is no indication that the plaintiff’s ability to investigate this matter has been impaired. 
[26]   I am satisfied that there is no significant prejudice to the plaintiff here.

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Thursday, October 9, 2014

BC Supreme Court Clarifies Entitlement to "Revival" of Part 7 Disability Benefits

In the case of Symons v. Insurance Corporation of British Columbia 2014 BCSC 1883, a summary trial application, the Court considered the “revival” of ICBC disability benefits following the Plaintiff’s attempt to return to work. In reasons for judgment, released today, the BC Supreme Court clarified when an individual insured through ICBC is entitled to receive temporary total disability (TTD) benefits, under Part 7 of the Insurance (Vehicle) Regulation.
Here, the Plaintiff had been seriously injured when her vehicle was hit from the rear by a large truck, on April 20, 2008.These injuries were immediately disabling, and the Plaintiff was paid TTD benefits until early May of that same year. After taking these two weeks off from work, the Plaintiff felt compelled to return to her regular employment, as she had just recently started her own business and had purchased a home with a mortgage. She returned to work in what the court called a “creditably stoic and determined manner”, hoping to return to normal life after the accident.

It was soon clear that the Plaintiff’s injuries were not going to ameliorate over time, despite her initial and continued efforts of engaging in various forms of therapy. The Plaintiff underwent two separate discectomies, neither of which was successful in alleviating the Plaintiff’s symptoms, and she developed anxiety and depression associated with her disability. Since February 12, 2012, the Plaintiff was unable to work, and on January 23, 2013, she sought to have her TTD benefits from ICBC reinstated. By the time the Plaintiff filed the present Application, on February 4, 2014, the Defendant Corporation had not yet delivered a proper response.

In its reasons for judgment, the Court sets out the relevant provisions under Part 7:

[14] Sections 79 and 97 of the Regulation mandate that, to be entitled to Part 7 disability, medical or rehabilitation benefits, a person must:
a)     be an “insured” person as defined in s. 78 (section 79(1));
b)    have been injured in an accident involving the use or operation of a vehicle that occurred in Canada or the United States (section 79(1));
c)    promptly give ICBC notice of the accident (section 97(1)(a));
d)   give ICBC a written report of the accident with particulars of the circumstances in which the accident occurred and the consequences of the      accident no more than 30 days after the accident (section 97(1)(b)); and
e)   give ICBC a proof of claim within 90 days of the collision (section 97(1)(c)).
[15] There was no dispute, on this hearing, that the plaintiff complied with all of these preconditions to entitlement. 
[16] Section 80 of the Regulation provides:
80(1) Where, within 20 days after an accident for which benefits are provided under this Part, an injury sustained in the accident totally disables an insured who is an employed person from engaging in employment or an occupation for which the insured is reasonably suited by education, training or experience, the [defendant] shall, subject to section 85, pay to the insured for the duration of the total disability or 104 weeks, whichever is shorter …(a) the applicable amount of disability benefits set out in section 2 of Schedule 3 [in this case, $300 a week].
[17] Total disability after 104 weeks is governed by s. 86 of the Regulation, which provides:
86 (1) Where an injury for which disability benefits are being paid to an insured under section 80 or 84 continues, at the end of the 104 week period, to disable the insured as described in the applicable section, the corporation shall, subject to subsections (1.1) and (2) and sections 87 to 90, continue to pay the applicable amount of disability benefits to an insured described in section 80 or 84(a) for the duration of the disability, or(b) until the insured reaches 65 years of age, whichever is the shorterperiod. [Emphasis added] 


The Plaintiff took the position that, once she met the prerequisites for total disability within the meaning of Part 7, the fact that she was able to return to work, even for a significant period of time, does not disentitle her to the TTD benefit payments after she again became totally disabled by injuries she had sustained in the same accident.

ICBC denied this, relying on the plain language of s86 of the Regulation, in asserting that the Defendant’s obligation to pay the Plaintiff TTD benefits ended at the time she was able to return to work. As Mr. Justice Baird points out at [21]:

Essentially, they say that TTDs cannot be revived or reinstated outside the 104-week period referred to in both ss. 80 and 86 of the Regulation: see the underlined phrase in s. 86, above, for the wording in contention, along with Rashella at para. 32 and Andrews v. Roffel, [1998] B.C.J. 631 (S.C.). 

The Court considered the jurisprudence on the “revival” of TTD benefit payments, referring to a number of recent case which led the Court to find, at [35] – [36]:
[35] Following Brewer, Halbauer, and Cai, insured persons currently have a right to revive their TTDs (assuming all the other regulatory requirements are met) in three situations:
1.     Entitlement and revival under s. 80: the insured person receives benefits under s. 80, returns to work, and again becomes totally disabled from employment within the 104-week period. 
2.     Entitlement and revival under s. 86: the insured person receives 104 weeks of benefits under s. 80, transitions to benefits under s. 86, then returns to work for a period before again returning to total disability. 
3.     Entitlement under s. 80 and revival under s. 86 (intervening alternate insurance benefits): the insured person receives TTDs under s. 80, then receives private insurance benefits for more than 104 weeks, before reviving Part 7 benefits under s. 86.
[36] The plaintiff in this case established entitlement under s. 80, and seeks revival under s. 86. In my view, the plaintiff is entitled to a revival of her TTDs. While none of the cases have taken the exact step that the plaintiff urges upon me, Brewer, Halbauer, and Cai have certainly cleared the path. Indeed, there is a plausible argument that Cai has already answered this question in the affirmative. For convenience, I repeat Bruce J.’s conclusion:
Section 86 should be interpreted in a purposive manner. Provided the insured remains eligible for benefits under s. 80, whether or not they are currently in receipt of monies from ICBC pursuant to that provision, they are eligible to apply for a continuation of those benefits under s. 86. [Emphasis added.]
The Court also sought to clarify the intent of the legislation, adding, at [40] – [42]:
[40] The Regulation is part of a legislative scheme of universal compulsory vehicle insurance. It is designed to provide “no fault” benefits to insured persons who are seriously injured in motor vehicle accidents. These benefits are meant to temper the negative financial consequences — in particular, the loss of employment or homemaking ability — that flow from such injuries.
[41] Part 7 is also designed to promote the injured person’s rehabilitation, defined in s. 78 as “the restoration, in the shortest practical time, of an injured person to the highest level of gainful employment or self-sufficiency that … is … reasonably achievable”. To this end, Part 7 also includes rehabilitation benefits under s. 88, including the provision of funds for various one-time expenses that are likely to promote the person’s recovery (for vocational training, for example, or alterations to the insured’s residence to improve accessibility), and funds for medical treatments and rehabilitative therapies. 
[42] In other words, Part 7 (at least so far as it is concerned with benefits following injury, rather than death benefits) has two related objects: to compensate an insured person for a portion of the financial loss accrued from temporary total disability caused by a motor vehicle accident; and, where possible, to do so in a manner that brings about the end of the total disability by returning the injured person to employment or self-sufficiency. (For some discussion of these purposes, see Halbauer at para. 41.)
Continuing, with regard to interpretation of the Regulation, at [43] – [44]:
[43] In Halbauer, the court rejected the plain meaning of another provision in the Regulation because that interpretation led to absurd consequences and frustrated the rehabilitative object of Part 7. A similar concern animated the court in Brewer, where Melnick J. noted at para. 18 that, absent a right to reinstatement, “claimants may be reluctant to attempt to return to work when they experience improvement for fear that, if the improvement proves to be temporary, their benefits will not be reinstated.” 
[44] I have similar concerns about the defendant’s interpretation of the regulatory provisions under consideration in this case. Given that Brewer has already established a right to reinstatement prior to the 104-week mark, the plain meaning interpretation of s. 86 would simply encourage claimants to end any attempt to return to work at the 103-week mark or, as observed in Brewer, to avoid such an attempt entirely.
The Court then concluded:
[49] I therefore conclude that an insured person is eligible to apply for the revival of TTDs under s. 86 so long as a) they have previously established eligibility and received TTDs under s. 80; b) they can demonstrate that they are totally disabled as defined in s. 80; and c) they can show that the total disability is due to injury sustained in the original accident.The Plaintiff was granted a declaration that she is entitled to TTD benefits, as well as medical and rehabilitation benefits, under Part 7 of the Insurance (Vehicle) Regulation. Judgment was ordered in her favour, for benefits that ought to have been paid following her first discectomy, and for her current period of total disability.


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