CITATION: Johnson v. Ontario (Finance) and Axa Insurance (Canada), 2015 ONSC 7927

DIVISIONAL COURT FILE NO.: 161/15
DATE: 20151216

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

SACHS, WILTON-SEIGEL AND MULLIGAN JJ.

BETWEEN:

MEREDITH JOHNSON Applicant (Respondent in Appeal)

– and –

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, as represented by THE MINISTER OF FINANCE and AXA INSURANCE (CANADA) Respondents (Appellant HMQ)

COUNSEL: John David Martin, for the Applicant Harold W. Sterling and John Friendly, for the Appellant, Her Majesty the Queen in Right of Ontario, as represented by the Minister of Finance

HEARD at Toronto: December 16, 2015

SACHS J. (ORALLY)

[1] The appellant, Her Majesty the Queen in Right of Ontario, as represented by the Minister of Finance (the “Minister”) appeals an order and a costs order made by Whitaker J. on January 21, 2015 (“the Whitaker Order”).

[2] The purpose of the motion before Whitaker J. was to carry into operation the order of Echlin J. dated May 22, 2008 (“the Echlin Order”). The parties interpreted the Echlin Order differently. In such a situation, in the ordinary course, the parties would have recourse to have the issue settled by the judge who made the order. Unfortunately, Echlin J. passed away. Consequently, the Minister brought a motion before Whitaker J. with respect to this issue.

Background

[3] The respondent, Meredith Johnson, was injured in a motor vehicle accident on August 5, 1999. She applied for statutory accident benefits which were paid by Citadel Insurance (now Axa).

[4] The respondent obtained an undefended default tort judgment against the driver of the vehicle, Francis Nelson, on September 26, 2006. She applied for payment out of the Motor Vehicle Accident Claims Fund but this application was refused by the Minister because she had not satisfied the statutory requirements under the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41 and the Insurance Act, R.S.O. 1990, c. 18.

[5] The respondent’s second application for payment out of the Fund was heard by Echlin J. on May 22, 2008. In that proceeding the respondent was also claiming against Axa. Echlin J. dismissed the respondent’s application with costs in favour of the Minister “payable by Meredith Johnson to the Queen in Right of Ontario, as represented by the Minister of Finance within 30 days from the February 2009 trial directly from the proceeds, if any, received by Meredith Johnson from Axa Insurance (Canada).”

[6] The respondent’s claim against Axa was settled in advance of trial in the amount of $60,000. The Minister brought a motion seeking to carry the Echlin Order into operation and seeking relief against Axa. However, the settlement funds were paid over to the respondent on or about August 28, 2014. Accordingly, the Minister abandoned the relief it had sought against Axa in late 2014 and now sought relief exclusively against the respondent.

[7] The motion was heard by Whitaker J. on January 20, 2015. Whitaker J. made an endorsement and the parties had some difficulty interpreting some aspects of his handwritten endorsement. Two very different orders were taken out as a result of this endorsement. The first was an order settled by the Registrar dated March 6, 2015. That order provided as follows:

(1) This Court orders that under the May 22, 2008 order of Justice Echlin, the applicant, Meredith Johnson, shall pay the costs award of $5,000 to each of the respondents within 60 days of the settlement of the action;

(2) This Court orders that the applicant, Meredith Johnson’s cross-motion is dismissed;

(3) This Court orders that the applicant, Meredith Johnson, shall pay the costs of this motion to the moving party, HMQ, fixed in the amount of $15,000, payable forthwith.

[8] The respondent, through her counsel, objected to that order and provided a different draft order to Whitaker J. By correspondence dated March 20, 2015, Whitaker J. stated, “My order is settled by the draft proposed by [the respondent’s counsel].” That draft provided:

(1) This Court orders that the claim against Meredith Johnson be and is hereby dismissed …

(3) This Court orders that HMQ shall pay costs to the applicant fixed and payable forthwith, in the amount of $15,000 inclusive of taxes and disbursements.

[9] The Minister now appeals the Whitaker Order as settled on March 20, 2015 and the award of costs against the Minister in the amount of $15,000.

Analysis

[10] Rule 59.06(2)(c) gives a judge the jurisdiction to make an order to carry out another judge’s order into operation. That rule permits a judge to give effect to the clear intent of another judge’s order, particularly in circumstances such as this where the parties cannot access the original judge.

[11] On this appeal the appellant argues that the intent of the Echlin Order was clear. When the respondent received funds from Axa, she was to pay the costs that had been awarded in favour of the Minister. The respondent states that this was not the intent of the order. According to the respondent, the intent of the Echlin Order was that the costs awarded to the Minister would only have to be paid if there was a trial. Thus, if the respondent was able to settle her case with Axa before trial, she had no obligation to pay the costs order that had been made against her in favour of the Minister.

[12] In our view, there is no logical or factual basis in the circumstances of this case for concluding that the respondent’s interpretation of the intent of the Echlin Order is correct. Simply put, it makes no sense that Echlin J. would have limited the respondent’s obligation to pay costs to the Minister such that those costs would only be payable out of proceeds she received from the insurer after a trial, as opposed to proceeds she received from the same insurer as a result of a settlement.

[13] For these reasons, we find that the motion judge erred in making an order that had the effect of failing to carry into operation the clear intent of the Echlin Order. Thus, we are allowing the appeal, setting aside the Whitaker Order, including the costs award, and substituting an order requiring the respondent to pay the Minister $5,000 by way of costs within 30 days.

Costs

[14] I have endorsed the Appeal Book, “This appeal is allowed for reasons given orally. The Order of Whitaker J. is set aside, including the costs award, and an order is made requiring the respondent to pay the Minister $5,000 by way of costs within 30 days. As agreed the Minister is entitled to its costs for the motion before Whitaker J., fixed in the amount of $10,000. With respect to this appeal the Minister seeks costs of $6,000. The respondent proposed the amount of $3,000, but produced a costs outline showing that her partial indemnity costs were also $6,000. In our view, the costs request of the Minister is a reasonable one and in accordance with the expectation of the losing party. Thus, we order the respondent to pay to the Minister its costs of the appeal fixed in the amount of $6,000, all inclusive, bringing the total award of costs made under this order to $16,000 (plus the $5,000 to give effect to the Echlin Order).”

___________________________ SACHS J.

WILTON-SIEGEL J.

MULLIGAN J.

Date of Reasons for Judgment: December 16, 2015

Date of Release: January 8, 2016

CITATION: Johnson v. Ontario (Finance) and Axa Insurance (Canada), 2015 ONSC 7927

DIVISIONAL COURT FILE NO.: 161/15 DATE: 20151216

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

SACHS, WILTON-SEIGEL AND MULLIGAN JJ.

BETWEEN:

MEREDITH JOHNSON Applicant (Respondent in Appeal)

– and –

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, as represented by THE MINISTER OF FINANCE and AXA INSURANCE (CANADA) Respondents (Appellant HMQ)

ORAL REASONS FOR JUDGMENT

SACHS J.

Date of Reasons for Judgment: December 16, 2015

Date of Release: January 8, 2016