TD Insurance Home and Auto v. Sivakumar, 2008 ONCA 835

CITATION: TD Insurance Home and Auto v. Sivakumar, 2008 ONCA 835

DATE: 20081211

DOCKET: C48634

COURT OF APPEAL FOR ONTARIO

Rosenberg, Sharpe and Blair JJ.A.

BETWEEN:

TD Insurance Home and Auto, formerly Liberty Insurance Company of Canada, formerly Liberty Mutual Insurance Company

Applicant (Appellant)

and

Ajeevan Sivakumar, a minor by his litigation guardian, Narendran Sivabalasingham, Ahilaverni Sivakumar, and Murugesu Sivakumar

Respondents

David L. Silverstone, for the appellant

Donald H. Rogers, Q.C. and George R. Wray, for the respondents

Heard: November 14, 2008

On appeal from the judgment of Justice Beth A. Allen of the Superior Court of Justice dated April 2, 2008.

Rosenberg J.A.:

[1] This appeal from the order of Allen J. concerns the application of the doctrine of res judicata where there has been a change in the law. In April 2002, a 5 ½ month old infant sustained a serious head injury. The child’s mother originally told hospital staff that the child was injured when he fell down a stairway. Several months later, the law firm representing the family put the family’s automobile insurer on notice of their intention to commence a legal action for injuries sustained by the infant. The family was now taking the position that the child’s injuries were sustained in an automobile accident. The insurer retained three experts to provide opinions about the cause of the injuries. It is the opinion of the experts that the child’s injuries were probably caused by a fall down the stairs, and not by a motor vehicle accident.

[2] Although no legal proceeding has been brought, the insurer seeks to preserve the evidence of its three experts, given the lengthy time that could elapse before an action is brought. In 2005, Echlin J. made an order allowing for the examination of the three experts. In reasons reported at (2006), 2006 ONCA 17246, 80 O.R. (3d) 671, this court overturned that decision, holding that rule 36.01 did not confer any power on the court to order the preservation of evidence prior to commencement of a proceeding. That rule permits a “party” to conduct an examination under oath or affirmation for the purpose of preserving the evidence of a potential witness. This court held that since there was no existing action the insurer was not a party within the meaning of the rule. Writing for the court, Borins J.A., at para. 17, suggested that the Civil Rules Committee consider an amendment to rule 36.01:

Given the possibility, remote though it may be, that no proceeding would be taken by, or on behalf, of the injured child until as late as 2021, and considering the dispute about the cause of the child's injuries, it made good sense for the respondent to retain experts to explore this issue at an early stage when the evidence was fresh. Given the ages of two of the experts, it also made sense to seek to preserve their evidence through the application of rule 36.01 to counter the possibility that they would be unavailable to testify in the future. Indeed, had rule 36.01 conferred power to order preservation of evidence before the commencement of an action, no fault could have been found with the application judge's order other than his failure to order the respondent to reimburse the Sivakumar family for all costs and expenses incurred in participating in the examination of the respondents' experts. Similar situations may occur in the future. For that reason, the Civil Rules Committee may wish to consider extending the application of rule 36.01 to situations in which no proceeding has been commenced.

[3] The Civil Rules Committee acted on this suggestion and amended rule 36.01 to provide for a definition of party to include a party to a pending or intended proceeding. As a result of this amendment, the insurer returned to court to again seek an order under rule 36.01. The respondents do not dispute that there is power to make the order sought but they argue that the matter is res judicata in light of this court’s earlier decision. The motions judge agreed with that position. She also held at para. 17 of her reasons that the case “presents no special circumstances that call for the matter to be re-adjudicated”.

[4] In Minott v. O’Shanter Development Co. (1999), 1999 ONCA 3686, 42 O.R. (3d) 321 (C.A.), this court considered the application of the doctrine of issue estoppel, an aspect of the res judicata doctrine. Speaking for the court at p. 340, Laskin J.A. confirmed that the doctrine is to be applied flexibly and that the court retains a discretion not to apply the doctrine where necessary “to achieve practical justice without undermining the principles on which issue estoppel is founded”. He noted at the same page that one example of special circumstances for not applying the doctrine is where there has been a change in the law.

[5] In my view, assuming that res judicata applied, the motions judge erred in principle in holding that there were no special circumstances. The change in rule 36.01, as a result of this very case, gave rise to special circumstances. An order allowing the insurer to preserve evidence that might otherwise be lost would achieve practical justice without undermining the principles on which res judicata is founded. This was only a preliminary step in what may or may not turn out to be an action. The potential plaintiffs have not changed their position because of the earlier decision of this court. This is not an attempt to impeach an earlier judicial finding; by reason of the change in the law, the original result should not be binding in the new context.

[6] In my view, the motion judge also erred in finding that the respondent would be prejudiced by the order. Any prejudice to the respondents can be dealt with by an order requiring the insurer to pay all the costs and expenses associated with the examination and by the trial judge’s discretion under rule 36.01(2) to decide whether to admit the evidence.

[7] However, in my view, the order for examination should be made only in relation to Mr. Nassar and Dr. Knight. Rule 36.01(3) lists a number of factors that the court shall take into account when asked to exercise its discretion to make an order for examination of a witness prior to trial. The list concludes with “any other relevant consideration”. Dr. Hollenberg’s opinion is based solely on his review of the child’s medical records. The motion judge noted “any general surgeon or paediatric neurologist could examine the medical records if required in the future by the commencement of an action”. In my view, it was open to the motion judge to find that this was a relevant consideration and was a basis for the exercise of her discretion against making the order for examination. The same cannot, however, be said about Mr. Nassar and Dr. Knight. They had examined the vehicle that was alleged to have been involved in the accident. It is unlikely that the vehicle would still be available for examination if an action is started many years from now.

[8] Accordingly, I would allow the appeal, and make an order under rule 36.01 for the examination of Mr. Nassar and Dr. Knight. The appellant is to reimburse the respondents for all costs and expenses on a full indemnity basis incurred in participating in the examination of the appellant’s experts. Consistent with this order, I would order that the appellant pay the costs of the Children’s Lawyer fixed at $8,500 inclusive of disbursements and G.S.T.

Signed: “M. Rosenberg J.A.”

“I agree Robert J. Sharpe J.A.”

“I agree R. A. Blair J.A.”

RELEASED: “MR” December 11, 2008