COURT OF APPEAL FOR ONTARIO
Hoy A.C.J.O., Lauwers and Benotto JJ.A.
BETWEEN
Christopher Skunk
Plaintiff (Respondent)
and
Laurel Ketash and Jevco Insurance Company
Defendants (Appellant)
Chantal M. Brochu and Douglas Treilhard, for the appellant
Edward S.E. Kim, for the respondent
Heard: September 12, 2016
On appeal from the order of Justice W. Danial Newton of the Superior Court of Justice, dated March 22, 2016, with reasons reported at 2016 ONSC 2019, 130 O.R. (3d) 380.
1The appellant, Jevco Insurance Company, appeals the dismissal of its summary judgment motion. It submits that, in his reasons, the motion judge made a final determination of law that is wrong and that will be binding on the trial judge. The respondent, Christopher Skunk, argues that the motion judge did not make a final, binding determination in his reasons, the order under appeal is not a final order and this appeal should accordingly be quashed for lack of jurisdiction.
2I agree with Mr. Skunk. Because the order dismissing Jevco’s motion for summary judgment is not a final order, an appeal lies to the Divisional Court, with leave.
3Before setting out my analysis of why the order under appeal is not a final order, I will first provide the factual and legal background necessary to understand the nuances of the parties’ arguments on jurisdiction.
A. Background
(1) Facts
4The underlying action arises out of a motor vehicle accident in October 2012. Mr. Skunk alleges that he was a passenger in a motor vehicle owned by his spouse, Maureen Skunk, but driven by a friend of his, Laurel Ketash. He alleges that the accident arose from the negligence of Ms. Ketash, who did not have automobile insurance at the time of the accident.
5In addition to suing Ms. Ketash, Mr. Skunk commenced an action against Jevco pursuant to s. 265 of the Insurance Act, R.S.O. 1990, c. I.8, and a standard Ontario Automobile Policy - OAP 1 (the “OAP” or the “Policy”) and the optional OPCF 44R Family Protection Coverage Endorsement (the “Endorsement”) issued to his spouse.
6In suing Jevco, Mr. Skunk sought to recover under the uninsured provisions in the Policy and Endorsement. To explain why Mr. Skunk took that route, it is necessary to provide some context as to how Ontario’s automobile insurance scheme works.
(2) Applicable Insurance Principles
7Automobile insurance is compulsory in Ontario: Compulsory Automobile Insurance Act, R. S. O. 1990, c. C. 25. The purpose of this legislation is to protect victims of automobile accidents “from having no means of seeking damages from persons who might have caused those damages without having the protection of automobile insurance”: Matheson v. Lewis, 2014 ONCA 542, 121 O.R. (3d) 641, at para. 36.
8The owner of a motor vehicle is liable for accidents caused by its operation under s. 192 of the Highway Traffic Act, R.S.O. 1990, c. H.8, except where subsection (2) applies, which provides as follows:
The owner of a motor vehicle or street car is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle or street car on a highway, unless the motor vehicle or street car was without the owner’s consent in the possession of some person other than the owner or the owner’s chauffeur. [Emphasis added.]
9The purpose of s. 192(2) was noted in Fernandes v. Araujo, 2015 ONCA 571, 127 O.R. (3d) 115 (C.A.), at para. 20:
[T]he purpose of this provision is "to protect the public by imposing, on the owner of a motor vehicle, responsibility for the careful management of the vehicle". The provision is an integral element of the Highway Traffic Act's mandatory licensing and insurance scheme to ensure the public safety. The owner has the right to give possession of the vehicle to another person, but this provision "encourages owners to be careful when exercising that right by placing legal responsibility on them for loss to others caused by the negligent operation of the vehicle on a highway". [Emphasis added.]
10If the motor vehicle is driven by a person who has the owner’s consent and is involved in an accident, s. 3.2 of the OAP provides coverage: “You are covered when you, or anyone else in possession of a described automobile with your consent, uses or operates it. We will consider these other people insured persons.”
11In the normal course, if a person is injured by the operation of the motor vehicle in which he or she is a passenger, the vehicle owner’s insurer must respond.
12But some owners fail to insure their automobile, or their insurance is voided, and so the automobile is not insured. The Insurance Act mandates a scheme to provide for limited insurance coverage where the operation of an uninsured automobile injures a person. The coverage is provided by the injured person’s own insurer, but coverage is limited to the minimum required by s. 251 of the Insurance Act, which is $200,000 for liability claims.
13In order to mitigate the consequences of being injured by an uninsured or underinsured motor vehicle, purchasers of automobile insurance policies in Ontario can buy, for an additional premium, added coverage in the form of the OPCF 44R Family Protection Coverage Endorsement.
14Against that background, I now turn to consider Mr. Skunk’s claim and Jevco’s motion.
(3) Mr. Skunk’s Claim and Jevco’s Motion
15Mr. Skunk did not sue his wife because he takes the position that Ms. Ketash was driving without Ms. Skunk’s consent so that under s. 192(2) of the Highway Traffic Act Ms. Skunk is not directly liable.
16Instead, Mr. Skunk sued Jevco. As he takes the position that his spouse’s vehicle ceased to be insured when Ms. Ketash drove it without Ms. Skunk’s consent, he sued under the “uninsured automobile coverage” provisions in s. 5 of the Policy, the “inadequately insured motorist” provisions in the Endorsement, and s. 265 of the Insurance Act, which defines the term “uninsured automobile”.
17In its statement of defence, Jevco pleads that Mr. Skunk took possession of his spouse’s vehicle without her consent. It also takes the position that Ms. Ketash drove the vehicle without Ms. Skunk’s consent and, as a result, the vehicle became uninsured. However, Jevco takes the position that Mr. Skunk is excluded from uninsured coverage as the spouse of the vehicle’s owner based on the Insurance Act, the Policy and the Endorsement.
18Section 265(1) of the Insurance Act requires that every motor vehicle liability policy provide coverage for damages where there is liability on the part of an owner or driver of an uninsured automobile. Section 265(2) defines “uninsured automobile” as follows:
“uninsured automobile” means an automobile with respect to which neither the owner nor driver thereof has applicable and collectible bodily injury liability and property damage liability insurance for its ownership, use or operation, but does not include an automobile owned by or registered in the name of the insured or his or her spouse. [Emphasis added.]
19This definition, which excludes automobiles owned by or registered in the name of the insured or his or her spouse, is in turn incorporated in virtually identical terms in s. 5 of the Policy and in the Endorsement.
20Section 5 of the Policy provides as follows:
Uninsured Automobile Coverage
5.1 Introduction
5.1.1 Uninsured Automobile Coverage Schedule
This Section of the policy describes the terms and conditions of the coverage set out in the Uninsured Automobile Schedule under the Insurance Act (Ontario). If there is a difference between the interpretation of the wording of this Section and the interpretation of the wording in the Schedule, the Schedule prevails. However, 5.3.3 in this Section is an addition to the coverage provided by the Schedule.
5.1.2 What is an Uninsured Automobile?
An uninsured automobile is one for which neither the owner nor driver has liability insurance to cover bodily injury or property damage arising out of its ownership, use or operation, or the insurance is not collectible. However, this does not include an automobile owned by or registered in the name of the insured person or their spouse. [Emphasis added.]
21The Endorsement provides as follows:
OPCF 44R
FAMILY PROTECTION COVERAGE
1.5 “inadequately insured motorist” means
(a) the identified owner or identified driver of an automobile for which the total motor vehicle liability insurance or bonds, cash deposits or other financial guarantees as required by law in lieu of insurance, obtained by the owner or driver is less than the limit of family protection coverage; or
(b) the driver or owner of an uninsured automobile or unidentified automobile as defined in Section 5, “Uninsured Automobile Coverage” of the Policy.
1.11 “uninsured automobile” means an automobile with respect to which neither the owner nor driver thereof has applicable and collectible bodily injury liability and property damage liability insurance for its ownership, use or operation but does not include an automobile owned by or registered in the name of the insured or his or her spouse.
INSURING AGREEMENT
- In consideration of a premium of $ …… or as stated in the Certificate of Automobile Insurance to which this change form is attached, the insurer shall indemnify an eligible claimant for the amount that he or she is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury to or death of an insured person arising directly or indirectly from the use or operation of an automobile. [Emphasis added.]
22Jevco brought a motion for summary judgment in an effort to have Mr. Skunk’s claim against the company dismissed, The narrow issue before the motion judge was whether, with respect to Mr. Skunk’s claim, the vehicle was excluded from the definition of “uninsured automobile” because it was owned by Mr. Skunk’s spouse.
23In response to Jevco’s motion, Mr. Skunk argued that, reading the Endorsement purposively, an automobile owned by or registered in the name of the insured or his or her spouse would be excluded from the definition of an “uninsured automobile” only if the insured or his or her spouse had chosen not to insure the automobile. He says that a vehicle taken without consent of the owner is an “uninsured automobile”.
24The motion judge accepted Mr. Skunk’s argument.
(4) The motion judge’s reasons
25The motion judge began his analysis by reviewing Fosker v. Thorpe (2004), 2004 CanLII 33358 (ON SC), 72 O.R. (3d) 753 (S.C.), which arose from a r. 21 motion. In Fosker, a thief, in the course of stealing the plaintiff’s car, struck the plaintiff with her own car. Applying the principles of statutory interpretation, Quinn J. held, at para. 29, that the wording of s. 265(2) of the Insurance Act, s. 5.1.2 of O.A.P. No. 1 and OPCF 44R is clear and unambiguous. Because the car was owned by the insured plaintiff, it was not an “uninsured automobile”.
26The motion judge disagreed with Quinn J.’s conclusion that s. 265(2) is clear and unambiguous. And, applying principles of contractual, rather than statutory, interpretation to the Endorsement, he concluded that those provisions were also ambiguous and should accordingly be construed against Jevco and given an “interpretation that spreads, rather than closes, the safety net”: para. 30.
27At para. 34, the motion judge wrote:
I therefore conclude that vehicles owned by the insured or spouse, if insured, are “uninsured automobiles” when taken without consent. Therefore, I conclude that Ms. Ketash, if she took the vehicle without consent, is an “inadequately insured motorist” under the [Endorsement].
28It is this conclusion – which Jevco characterizes as a binding determination of law – that Jevco seeks to appeal to this court. The motion judge concluded para. 34 with the following sentence:
As such, I conclude that there may be coverage and Jevco’s motion for summary judgment is dismissed. [Emphasis added.]
B. jurisdictional analysis
(1) This court’s jurisprudence
29There is no common law or inherent right of appeal. The Courts of Justice Act, R.S.O. 1990, c. C. 43, provides for the general appellate jurisdiction of this court and the Divisional Court in civil matters: see ss. 6, 19 and 21.9.1.
30Subject to certain exceptions – none of which are relevant in this case – an appeal lies to this court from a final order of a judge of the Superior Court of Justice. If an order is interlocutory, rather than final, the appeal lies to the Divisional Court, with leave: Cole v. Hamilton (City) (2002), 2002 CanLII 49359 (ON CA), 60 O.R. (3d) 284 (C.A.), at para. 15; Albert v. Spiegel (1993), 17 C.P.C. (3d) 90 (Ont. C.A.), at p. 91.
31The reason for the distinction is explained by Paul M. Perell and John W. Morden in The Law of Civil Procedure in Ontario, 2d ed. (Markham: Lexis-Nexis Canada Inc., 2014), at p. 910:
¶12.41 In general terms, the policy underlying the distinction between interlocutory and final orders is the proportionality principle. For judicial decisions that are of comparatively less importance to the parties and the public than other decisions (particularly those other decisions that are determinative of the outcome of the litigation), there should be no appeal at all, or the right of appeal should be curbed by a leave requirement. [Footnote omitted.]
32A “final order” is one that finally disposes of an action or application, or that finally disposes of a “substantive right” of one of the parties: Hendrickson v. Kallio, 1932 CanLII 123 (ON CA), [1932] O.R. 675, at p. 680; Ball v. Donais (1993), 1993 CanLII 8613 (ON CA), 13 O.R. (3d) 322 (C.A.), at p. 324; R.S. v. S.H. (2000), 2000 CanLII 17038 (ON CA), 52 O.R. (3d) 152 (C.A.), at para. 13; Waldman v. Thomson Reuters Canada Ltd., 2015 ONCA 53, 330 O.A.C. 142, at paras. 22-23.
33Regrettably, the question of whether an order dismissing a summary judgment motion is a final order is not a novel one. In V.K. Mason Construction Ltd. v. Canadian General Insurance Group Ltd.(1998), 1998 CanLII 14615 (ON CA), 42 O.R. (3d) 618, Finlayson J.A. wrote this, at pp. 623-24 and 625-26:
When parties argue whether orders of this nature are final or interlocutory, they appear to lose sight of the fact that there is a remedy where the order is interlocutory, although admittedly, it is to another court and requires leave. It was apparent from the argument in this appeal that the appellant's real concern was not where to appeal the motions court judge's order allowing the action to proceed to trial. Rather, the real concern was that, unless overturned on appeal, the findings underlying this order would be binding on the judge who ultimately tried the action, either because the findings are res judicata or raise issue estoppel, or because, in this particular case, they are so detailed and incisive that the trial judge, even if he or she does not feel obliged in law to follow them, will show them great deference and adopt them as persuasive. The latter consideration may be a sound reason for allowing leave to appeal, but it is of no concern to this court. As to res judicata or issue estoppel in the context of a motion for summary judgment that is dismissed, I do not think that the motions court judge's reasons should be taken as anything more than his explanation for finding that there is a genuine issue for trial. It is the finding that there is a genuine issue for trial that is res judicata.
Conceptually, it may be difficult to accept that where a plaintiff or defendant moves for summary judgment and succeeds, the appeal from that summary judgment is to this court as of right whereas if the moving party fails to obtain a summary judgment, the order dismissing the motion is to the Divisional Court, and only with leave of that court. However, the distinction has a long tradition in the law. The summary judgment finally determines the issue or issues between the parties and gives rise to a plea of res judicata in subsequent proceedings on the same issue or issues. An order dismissing a motion for summary judgment, on the other hand, determines only that there is a genuine issue for trial and the issue or issues have not been finally resolved.
34This court reiterated in Ashak v. Ontario (Director, Family Responsibility Office), 2013 ONCA 375, 115 O.R. (3d) 401, at para. 7, that, in general, an order dismissing a motion for summary judgment is not a final order because a decision under r. 20 determines only that a genuine issue requiring a trial exists.
35Purported findings of fact by a motion judge who dismisses a summary judgment motion do not have binding effect in the subsequent proceeding unless the motion judge invokes her power under r. 20.05(1) to make an order specifying what material facts are not in dispute – a power that exists where summary judgment is refused or is granted only in part. As this court stated in Ashak, where a motion judge proposes to do so, she should specifically say so, and the order should refer to r. 20.05(1): para. 8, citing Leone v. University of Toronto Outing Club, 2007 ONCA 323, at para. 3.
36The same principle applies in the case of questions of law. At paras.11 and 13 of Ashak, the court wrote:
Like the court in Leone, it is our view that, if a motion judge dismissing a motion for summary judgment proposes to exercise the power under rule 20.04(4)1 to make a binding determination of law, the motion judge should specifically invoke the rule, and reference to the rule, as well as the legal determination made, should form part of the formal order. In our opinion, the issue of whether an order is final or interlocutory should not turn on the forcefulness of the reasons for the conclusion….
In our view, in most instances, the content of the formal order is integral to determining what has been decided against a party in a fashion that is binding.
37Ashak distinguished Almrei v. Canada (Attorney General), 2011 ONCA 779, 345 D.L.R. (4th) 475, in which an order dismissing a summary judgment motion was found to be a final order, and makes clear that Almrei “should not be viewed as establishing a general principle that the question of whether an order dismissing a motion for summary judgment is final can be determined based on a motion judge’s reasons”: para. 15.
38Mr. Almrei had been held in custody for many years on two successive security certificates issued under the Immigration and Refugee Protection Act, S.C. 2001, c. 27. Ultimately, after a lengthy hearing, parts of which were held in camera or ex parte, the second security certificate was quashed by Mosely J. Mr. Almrei subsequently commenced a civil action against Canada for, among other things, negligent investigation, false imprisonment and various Charter breaches. He brought a motion for partial summary judgment, arguing that issue estoppel applied and the parties were bound by the findings made by Mosley J. The motion judge dismissed Mr. Almrei’s motion, explaining that Mr. Almrei sought to invoke the doctrine of issue estoppel as a sword to obtain summary judgment, rather than as a shield or defence to preclude litigation on matters already decided between the parties, and that the test for issue estoppel had not been met.
39This court dismissed the Attorney General of Canada’s motion to quash Mr. Almrei’s appeal to this court. At para. 4 of its analysis, this court noted that the hearing before Mosely J. involved hearing evidence that Mr. Almrei might never be in a position to call or even access. Thus, depriving Mr. Almrei of the ability to use the findings of fact by Mosely J. could deprive Mr. Almrei of substantive rights.
40At para. 7, this court concluded:
[Mr. Almrei] singled out for resolution the question of use of issue estoppel. A finding that issue estoppel is not available is a final determination of that issue of law. The decision of the motion judge has arguably deprived the appellant of a substantive right that could have been entirely determinative of the Attorney General's liability….
41In Ashak, the court provided three reasons why Almrei should not be taken as establishing a general principle that where a judge purports to make a legal determination in reasons dismissing a summary judgment motion those determinations should be treated as binding.
42First, Mr. Almrei had formally singled out the precise legal issue to be decided. Unlike in Ashak, the precise scope of the point of law determined by the motion judge was clear.
43Second, the determination on the question of issue estoppel potentially deprived Mr. Almrei of the ability to prove his case.
44Third, Canada – the party that moved to quash the appeal on the basis that the order was interlocutory – maintained that the question of issue estoppel was res judicata.
45By distinguishing Almrei in that manner, the court left open the possibility that, in circumstances paralleling those in Almrei, a legal determination could be found to be binding, even if not included in the formal order.
46In Fanshawe College of Applied Arts and Technology v. AU Optronics Corp., 2015 ONCA 808, the motion judge made several determinations of law in the course of dismissing the defendants’ motion for summary judgment. When the defendants appealed to this court, the plaintiff moved to quash their appeal for lack of jurisdiction. In the course of its submissions, the plaintiff conceded that “nothing in the order sought to be appealed, or in the reasons of the motion judge in support of that order, precludes the [defendants] in any way from advancing at trial their arguments regarding s. 36(4) of the Competition Act or abuse of process as substantive defences or otherwise.” In light of that concession, this court quashed the appeal in a three-paragraph endorsement on the basis that the order below was interlocutory, and not final.
(2) Analysis and synthesis
47I conclude that the issue of whether an automobile that has been taken without the consent of the owner is excluded from the definition of “uninsured automobile” by reason of the fact that it is owned by or registered in the name of the insured or his or her spouse is not res judicata, and that the motion judge’s order dismissing Jevco’s summary judgment motion is therefore not a final order.
48While the formal order in this case was issued nearly three years after Ashak was decided, it simply provides that “the motion is dismissed” and orders costs of the motion payable to Mr. Skunk. And – in face of Ashak – the motion judge did not invoke r. 20.04(4) and declare that an automobile that has been taken without the consent of the owner is not excluded from the definition of “uninsured automobile” by reason of the fact that it is owned by or registered in the name of the insured or his or her spouse.
49Nor is it clear from examining the motion judge’s reasons, as Jevco urged this court to do, that the order under appeal is final.
50Despite expressing a “conclusion” about the interpretation of the Endorsement in his reasons, the motion judge simply determined that there “may” be coverage. As I explain below, it is not clear that the motion judge did not simply conclude that there was a genuine issue for trial as to whether or not Mr. Skunk is entitled to coverage.
51Jevco argues that the motion judge used the word “may” in his reasons because, albeit mistakenly, he thought that the issue of whether or not the vehicle was driven without the consent of Ms. Skunk would be a live issue at trial. Jevco points to the motion judge’s use of the word “if” at para. 34: “Therefore, I conclude that Ms. Ketash, if she took the vehicle without consent, is an ‘inadequately insured motorist’” (emphasis added).
52At para. 3 of his reasons, the motion judge wrote that “the vehicle … became uninsured when it was taken without consent by the defendant Ketash.” However, after reciting the facts as recounted in Mr. Skunk’s factum, the motion judge wrote the following phrase, at para. 11, giving rise to Jevco’s argument: “On these facts, it is not clear that there is a lack of consent.”
53As I have said, Mr. Skunk’s position is that Ms. Ketash drove Ms. Skunk’s vehicle without her consent. Lack of consent is necessary if Mr. Skunk is to succeed in his claim for coverage on the basis that the vehicle is an uninsured automobile. And Jevco concedes this element: it specifically pleads in its statement of defence that Mr. Skunk took his spouse’s vehicle without her consent. Thus, as the parties submit, the question of consent is not an issue for trial.
54Jevco’s explanation of why the motion judge used the words “if” and “may” is plausible. However, the motion judge’s reasoning is unclear. Another plausible explanation is that the motion judge understood that the question of consent was not an issue for trial and used the word “if” because he did not want to appear to endorse what the parties had agreed amounted to lack of consent. And, if that interpretation is accepted, then “may” is consistent with his determining only that there is a genuine issue for trial. Given this ambiguity in the motion judge’s reasons, his conclusions should not be taken as anything more than his explanation for finding that there is a genuine issue for trial.
55While not determinative in and of itself, Mr. Skunk’s concession is consistent with my view that the order under appeal is interlocutory. Despite the fact that it is against his interests at trial, he conceded that the issue of whether the vehicle is an “uninsured automobile” is not res judicata and that the trial judge is free to follow Fosker and conclude that it is not an “uninsured automobile” because it is owned by his spouse.
56The debate about the interpretation of the motion judge’s reasons highlights the wisdom of Ashak. Had the motion judge specified that he was making a determination of law that was binding on the trial judge, or if the parties had prepared a form of order in accordance with Ashak, this court would have had jurisdiction to hear the appeal. Jevco – like Mr. Almrei – singled out a specific legal issue to be determined, and the issue – if resolved in Jevco’s favour – would have been determinative of the action.
57To understand the parties’ submissions on whether the motion judge had made a binding determination of law, it was necessary to delve into the substance of the appeal. Having done so, the temptation is to find jurisdiction and rule on the merits, which would avoid the need for a further attendance by the parties. The efficiencies of time and cost for the parties are obvious. However, it would take away from the force of this court’s directive in Ashak and increase the considerable uncertainty about when an appeal of the dismissal of a summary judgment motion lies to this court. That confusion results in costs and inefficiencies – to both litigants and the court system – on a wider scale. Post-Hryniak, the volume of summary judgment motions, and, anecdotally, the volume of appeals from the dismissal of summary judgment motions, have increased. Greater clarity is needed.
58In an attempt to provide greater clarity, I would summarize the effect of this court’s jurisprudence as follows:
The general rule is that an order dismissing a motion for summary judgment is an interlocutory, and not a final, order.
If a party argues that the motion judge made a final, binding determination of law that disposes of the substantive rights of one of the parties (“Binding Legal Determination”) in dismissing the summary judgment motion, then this court will consider whether the motion judge’s order invokes r. 20.04(4) and references the legal determination that the party argues is a Binding Legal Determination.
If the order does not invoke r. 20.04(4) and reference the legal determination that the party argues is a Binding Legal Determination, the court will usually consider whether the precise scope of the point of law determined by the motion judge is clear and whether it is clear that the motion judge intended that her determination be binding on the parties at trial. In this case, it was not clear that the motion judge intended his determination to be binding on the parties at trial.
59I make two additional points.
60First, consistent with this court’s directions in Ashak, in the absence of an express indication by the motion judge that her determination is to be binding on the parties at trial, it should be presumed that in expressing a conclusion on a point of law when dismissing a summary judgment motion she is simply explaining why she concluded that there is a genuine issue requiring a trial, and did not intend her determination to be binding on the parties.
61Second, while this court may take into account a party’s concession that an issue is or is not res judicata in determining whether an order is final or interlocutory, a concession cannot confer or deprive the court of jurisdiction. I do not read either Almrei, Ashak or Fanshawe as suggesting otherwise.
62The daily workload of Superior Court motion judges is heavy. Nonetheless, when dismissing a summary judgment motion, I would urge them to specifically consider to what extent they are making determinations of law intended to be binding on the parties at trial, and, if they are intending to make such determinations, invoke r. 20.04(4) and make clear in their orders and reasons that the determination is intended to be binding on the parties at trial.
C. Disposition
63I would accordingly quash this appeal for lack of jurisdiction. In the circumstances, I would make no award of costs.
Released: “AH” “NOV 10 2016”
“Alexandra Hoy A.C.J.O.”
“I agree P. Lauwers J.A.”
“I agree M.L. Benotto J.A.”
