Pepe et al. v. State Farm Mutual Automobile Insurance Company

[Indexed as: Pepe v. State Farm Mutual Automobile Insurance Co.]

105 O.R. (3d) 794

2011 ONCA 341

Court of Appeal for Ontario,

Doherty, Moldaver and Feldman JJ.A.

May 3, 2011

Insurance -- Automobile insurance -- Unidentified motorist endorsement -- Corroboration -- Independent witness evidence -- Witness' close personal relationship with insured and her own financial interest in establishing that accident was caused by unidentified driver not precluding her evidence from meeting corroboration requirement in OPCF 44R.

The plaintiff was injured in a single-vehicle accident which he claimed occurred when he swerved to avoid an unidentified driver. A, his girlfriend at the time, was in the car and was also injured. The plaintiff sued his automobile insurer under the [page795] Family Protection Coverage Endorsement OPCF 44R. A also sued the insurer, but did not rely on OPCF 44R. She too claimed that the accident was caused by the negligence of the unidentified driver. The parties brought a motion for a determination of whether A's evidence could meet the corroboration requirement in s. 1.5(C) of OPCF 44R. The motion judge ruled in the plaintiff's favour. The insurer appealed, arguing that A's evidence could not be "independent witness evidence" because of A's close personal relationship with the plaintiff and her financial stake in the outcome.

Held, the appeal should be dismissed.

Nothing in the language of s. 1.5(D)(i) of OPCF 44R could justify extending the very limited and well-defined category of persons who cannot give corroboration to the much broader and less defined group of persons having a close personal relationship with the claimant. Nor did the fact that A had a financial stake in showing that the accident was caused by an unidentified driver mean that she could not provide the corroboration required by s. 1.5(C). The requirement for independence applies to the evidence of the witness, not to the witness herself. The witness' neutrality or lack thereof is relevant to the ultimate credibility of her evidence. A's evidence describing the accident was independent of the plaintiff's in that it came from a source extraneous to his testimony and it clearly related to a material matter.

APPEAL from the order of D.A. Wilson J. (2010), 2010 ONSC 2977, 101 O.R. (3d) 547, [2010] O.J. No. 2138 (S.C.J.) on a motion to determine a question of law.

Cases referred to Paquette v. Chubb (1988), 1988 4621 (ON CA), 65 O.R. (2d) 321, [1988] O.J. No. 1355, 52 D.L.R. (4th) 1, 29 O.A.C. 243, 31 C.P.C. (2d) 87, 11 A.C.W.S. (3d) 320 (C.A.) [Leave to appeal to S.C.C. refused (1989), 66 O.R. (2d) xi, [1988] S.C.C.A. No. 465, 55 D.L.R. (4th) vii, 100 N.R. 239n, 34 O.A.C. 400n]; R. v. Khela, [2009] 1 S.C.R. 104, [2009] S.C.J. No. 4, 2009 SCC 4, EYB 2009-153174, J.E. 2009-180, 383 N.R. 279, 238 C.C.C. (3d) 489, 265 B.C.A.C. 31, 301 D.L.R. (4th) 257, 62 C.R. (6th) 197; R. v. Vetrovec, 1982 20 (SCC), [1982] 1 S.C.R. 811, [1982] S.C.J. No. 40, 136 D.L.R. (3d) 89, 41 N.R. 606, [1983] 1 W.W.R. 193, J.E. 82-563, 67 C.C.C. (2d) 1, 27 C.R. (3d) 304, 7 W.C.B. 477; Sands Estate v. Sonnwald, [1986] O.J. No. 478, 9 C.P.C. (2d) 100, 22 E.T.R. 282, 38 A.C.W.S. (2d) 66 (H.C.J.)

Statutes referred to Evidence Act, R.S.O. 1990, c. E.23, s. 13

Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 21.01(1)

Chris G. Paliare, for defendant (appellant). Jerome Morse, for plaintiffs (respondents).

The judgment of the court was delivered by

DOHERTY J.A.: -- [page796]

I

[1] The respondent Massimo Pepe ("Mr. Pepe") was injured in a single-car accident on January 12, 2004. Shirley Aguirre ("Ms. Aguirre"), his girlfriend at the time, was in the car and was also injured. Mr. Pepe claimed that the accident occurred when he swerved to avoid an oncoming vehicle that had crossed into his lane. Mr. Pepe's vehicle left the road and struck a tree. According to him, the other vehicle did not stop.

[2] The appellant, State Farm Mutual Automobile Insurance Company ("State Farm"), insured Mr. Pepe's vehicle. That policy covers injuries caused to Mr. Pepe as a result of the negligence of an unidentified driver. The unidentified driver coverage has two components, a $200,000 coverage pursuant to the terms of the standard automobile policy, and an additional $800,000 coverage pursuant to the terms of the Family Protection Endorsement OPCF 44R (Toronto: Queen's Printer for Ontario, 2005) ("OPCF 44R"). The latter is in issue on this appeal.

[3] The unidentified driver coverage under OPCF 44R is available only if the evidence of the "eligible claimant" (Mr. Pepe) is corroborated by "other material evidence". Mr. Pepe relied on the evidence of his passenger, Ms. Aguirre, to provide that corroboration. She agreed that the accident had been caused by the negligence of the unidentified driver.

[4] Mr. Pepe eventually sued State Farm, claiming coverage for his injuries caused by the negligence of the unidentified driver. State Farm denied that the accident was caused by the negligence of anyone other than Mr. Pepe. State Farm further alleged that the coverage under OPCF 44R was not available to Mr. Pepe as Ms. Aguirre's evidence could not fulfill the corroboration requirement in OPCF 44R.

[5] Both parties brought motions under rule 21.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for a determination of whether Ms. Aguirre's evidence could meet the corroboration requirement in OPCF 44R. The motion judge ruled in Mr. Pepe's favour, holding that Ms. Aguirre's evidence could corroborate Mr. Pepe's claim for the purposes of the OPCF 44R coverage. State Farm appeals from that determination. I would affirm the order below and dismiss the appeal.

II

[6] The relevant provisions of OPCF 44R are ss. 1.5(C) and 1.5(D):

(C) where an eligible claimant alleges that both the owner and driver of an automobile referred to in clause 1.5(b) cannot be determined, the eligible [page797] claimant's own evidence of the involvement of such automobile must be corroborated by other material evidence; and

(D) "other material evidence" for the purposes of this section means (i) independent witness evidence, other than evidence of a spouse . . . or a dependent relative . . . ; or (ii) physical evidence indicating the involvement of an unidentified automobile. (Emphasis added)

[7] Section 1.5(D)(ii) has no application to the facts of this case. There is no physical evidence of the involvement of an unidentified automobile. Mr. Pepe relies only on s. 1.5(D) (i). He contends that Ms. Aguirre's evidence constitutes "independent witness evidence".

[8] Counsel for State Farm submits that the phrase "independent witness evidence" looks not to the nature of the evidence, but to the characteristics of the witness. Counsel contends that Ms. Aguirre is disqualified from giving corroborative evidence, both because of her personal financial stake in the outcome (she is also suing State Farm for damages caused by the unidentified driver) and because of her close personal relationship with Mr. Pepe at the time of the accident. Counsel contends that either factor alone, and certainly the two taken together, exclude Ms. Aguirre from being an independent.

[9] Counsel supports his interpretation of the corroboration requirement in s. 1.5(C) by reference to case law in which judges have, in the course of assessing witness credibility, described witnesses with a financial stake in the outcome, or with a close connection to one of the parties, as not being independent. Counsel would have this court give the phrase "independent witness" in s. 1.5(D) that same meaning.

[10] The submission that anyone with a close personal relationship to a party claiming under OPCF 44R cannot provide corroborative evidence is quickly disposed of by reference to the language of s. 1.5(D)(i). The section specifically addresses categories of witnesses who are not capable of providing corroborative evidence. Those categories are limited to spouses and dependent relatives. On the language of the section, a witness who is a spouse or a dependent relative cannot provide corroboration of the claimant's assertion that the accident was caused by an unidentified driver, no matter how credible the evidence of the spouse or dependent relative might be.

[11] Nothing in the language of the section could justify extending the very limited and well-defined categories of persons who cannot give corroboration to the much broader and less [page798] defined group of persons having a close personal relationship with the claimant. Not only is there nothing in the language supporting the appellant's position, an interpretation that precluded anyone with a close personal relationship from providing corroborative evidence would, given the nature of the coverage in OPCF 44R, significantly diminish the circumstances in which that coverage would be available. I would think that it would be quite common that passengers in a vehicle would have a close personal relationship with the driver. On the appellant's interpretation, and absent physical evidence, the OPCF 44R coverage would not extend to that very commonplace situation, should there be an accident that the driver claimed was caused by an unidentified driver. I would add that the phrase "close personal relationship" is so imprecise as to render any prohibition against providing corroborative evidence based on that phrase at least impractical, and probably unworkable.

[12] The appellant's argument that Ms. Aguirre has a financial stake in the outcome of Mr. Pepe's lawsuit is based on the allegations in her own lawsuit brought against State Farm. In that lawsuit, she claims that the accident and her injuries were caused by the negligence of an unidentified driver and that under the terms of Mr. Pepe's policy, State Farm must compensate her for her injuries. Ms. Aguirre's statement of claim does not identify any specific provisions in the State Farm insurance policy that she relies on in advancing her claim against State Farm. Counsel for Mr. Pepe makes the point that Ms. Aguirre does not fall within the definition of "eligible claimant" for the purposes of OPCF 44R. Subsequent to the hearing of the motion, Ms. Aguirre has disavowed any reliance on OPCF 44R.

[13] Ms. Aguirre has, however, sued State Farm, alleging that the accident was caused by an unidentified driver. The $200,000 basic coverage under the policy remains available to respond to Ms. Aguirre's claim. I think that is enough to give her a financial stake in supporting Mr. Pepe's claim that the accident was caused by an unidentified driver. That financial stake is not erased even if, as counsel for Mr. Pepe persuasively argues, Ms. Aguirre might well have been better off financially had she alleged that Mr. Pepe was responsible for the accident and sued him. She has not taken that course. Because of the way she pleaded her case, Ms. Aguirre has a financial stake in showing that the accident was caused by an unidentified driver. The question is whether that means she cannot provide the corroboration required by s. 1.5(C). [page799]

[14] The purpose of the corroboration requirement in OPCF 44R is clear. Insurers, who draft these endorsements, see themselves at a disadvantage where a claimant asserts coverage based on the negligence of an unidentified driver. To compensate for this disadvantage, insurers provide extended coverage under OPCF 44R only where the claim is not based solely on the claimant's evidence or on the claimant's evidence supported by that of a spouse or dependent relative, both of whom would clearly have a financial interest in the claimant accessing the OPCF 44R coverage. The corroboration requirement limits the scope of the insurer's exposure, presumably to those cases where the corroborative evidence provides some comfort as to the validity of the claim.

[15] There is a long history of requiring corroboration either at common law or by statute where the evidence of one witness is regarded as insufficient to justify the finding in issue. Evidence from a second source is seen as capable of overcoming the inherent weakness in the evidence from the suspect source. Broadly speaking, both at common law and under statute, corroborative evidence is evidence from a source extraneous to the witness whose evidence is to be corroborated, that is relevant to a material fact in issue and that tends to show that the witness whose evidence needs corroboration is telling the truth: R. v. Khela, 2009 SCC 4, [2009] 1 S.C.R. 104, [2009] S.C.J. No. 4, at paras. 37-43; Paquette v. Chubb (1988), 1988 4621 (ON CA), 65 O.R. (2d) 321, [1988] O.J. No. 1355 (C.A.), at pp. 334-35 O.R., leave to appeal to S.C.C. refused (1989), 66 O.R. (2d) xi, [1988] S.C.C.A. No. 465; Sands Estate v. Sonnwald, [1986] O.J. No. 478, 9 C.P.C. (2d) 100 (H.C.J.), at pp. 119-20 C.P.C. Chief Justice Dickson, in R. v. Vetrovec, 1982 20 (SCC), [1982] 1 S.C.R. 811, [1982] S.C.J. No. 40, at p. 826 S.C.R., identified the rationale for a corroboration requirement with his customary precision:

The reason for requiring corroboration is that we believe the witness has good reason to lie. We therefore want some other piece of evidence which tends to convince us that he is telling the truth.

[16] There is no doubt that under the common law requirements or those applicable under the Evidence Act, R.S.O. 1990, c. E.23, s. 13, Ms. Aguirre's evidence is capable of corroborating Mr. Pepe's evidence. Her evidence describing the accident is independent of Mr. Pepe's in that it comes from a source extraneous to his testimony and it clearly relates to a material matter, that is, whether the accident was caused by the unidentified driver. It is certainly capable of helping a trier of fact decide whether Mr. Pepe is telling the truth. [page800]

[17] There is nothing in the language of s. 1.5(C) or (D) that would dictate a departure from the traditional approach to corroboration. The requirements of materiality and independence, both critical to that approach, can be found in the language of s. 1.5(C) and (D). Where the submission of the appellant goes wrong is in the assertion that it is the witness who must be independent, in the sense of neutral to the outcome. Rather, it is the evidence of the witness that must be independent, in the sense of extrinsic to the testimony of the party to be corroborated. The independence requirement in the context of corroboration has always referred to the independence of the evidence and not to the neutrality of the witness. The witness' neutrality or lack thereof is relevant to the ultimate credibility of the witness' evidence.

[18] Ms. Aguirre's evidence that the accident was caused by an unidentified driver was independent of Mr. Pepe's assertion that the accident was caused in that manner. [^1] Ms. Aguirre was neither Mr. Pepe's spouse nor a dependent relative. Her evidence was clearly material to the claim. It was capable of providing the corroboration required by OPCF 44R.

[19] My conclusion that the motion judge properly held that Ms. Aguirre's evidence was corroborative means that Mr. Pepe's claim for coverage under OPCF 44R can proceed. It does not mean that it will necessarily succeed. At trial, the trial judge will have to decide whether Ms. Aguirre's evidence actually corroborates Mr. Pepe's evidence that the accident was caused by an unidentified driver. In making that determination, the trial judge will have to assess Ms. Aguirre's credibility. Her financial stake in the outcome and her personal relationship may figure in that assessment. If in the context of the entire evidence the trial judge disbelieves Ms. Aguirre, her evidence cannot corroborate Mr. Pepe's version of the accident and his claim under OPCF 44R would fail.

III

[20] I would dismiss the appeal. Costs to Mr. Pepe in the amount of $7,500, inclusive of disbursements and HST.

Appeal dismissed.

Notes

[^1]: On the motion, there was an argument made that in fact her evidence was not independent of Mr. Pepe, but that argument was not advanced on appeal.