Bruinsma v. Cresswell et al.

[Indexed as: Bruinsma v. Cresswell]

Ontario Reports

Court of Appeal for Ontario,

Laskin, LaForme and Hoy JJ.A.

February 22, 2013

114 O.R. (3d) 452 | 2013 ONCA 111

Case Summary

Insurance — Automobile insurance — Uninsured automobile coverage — Insured injured in collision with uninsured motorist — Insured breaching policy by knowingly driving with suspended driver's licence — Insured not disentitled to uninsured automobile coverage as result — Section 1.4.5 and s. 4(1) of s. 8 of policy being statutory conditions and not applying to uninsured automobile coverage unless otherwise provided in policy — Standard automobile policy not otherwise providing.

Limitations — Motor vehicles — Plaintiff's insurer denying coverage under uninsured automobile provisions of policy — Plaintiff suing uninsured driver and his own insurer — Administrator of Motor Vehicle Accident Claims Fund bringing cross-claim against insurer on behalf of defendant driver more than two years after defendant was served with statement of claim — Limitations Act applying to cross-claim made by Minister of Finance against insurer on behalf of defendant pursuant to [page453] s. 8(2) of Motor Vehicle Accident Claims Act — Cross-claim out of time — Insurer's motion for summary judgment stayed in interest of judicial economy and expeditious determination of issues — Limitations Act, 2002, S.O. 2002, c. 24, Sch. B — Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41, s. 8(2).

The plaintiff was injured in a collision with an uninsured motorist. His insurer, CAA, took the position that the plaintiff was not entitled to coverage under the uninsured automobile provisions of the policy because he breached the policy by knowingly driving without a valid licence. The plaintiff sued the uninsured driver, the owner of the other vehicle and CAA. More than two years after the defendant driver was served with the statement of claim, the Minister of Finance, which administered the Motor Vehicle Accident Claim Fund, brought a cross-claim against CAA on behalf of the defendant, seeking a declaration that the plaintiff was entitled to coverage despite his breach of the policy. CAA brought a motion for summary judgment, seeking dismissal of the plaintiff's claim for uninsured automobile coverage under the policy, and also seeking dismissal of the cross-claim on the basis that it was barred by the Limitations Act, 2002. The motion judge found that the plaintiff was covered by the policy and that the Limitations Act did not apply to the cross-claim. The motion for summary judgment was dismissed. CAA appealed.

Held, the appeal should be dismissed.

Both provisions of the policy that CAA relied on to deny coverage -- s. 1.4.5 and s. 4(1) of s. 9 -- are statutory conditions. As such, pursuant to s. 234(3) of the Insurance Act, R.S.O. 1990, c. I.8, they do not apply to uninsured automobile coverage unless otherwise provided in the contract. The contract at issue, OAP 1, did not otherwise provide. Accordingly, CAA could not rely on the statutory conditions to deny coverage.

The motion judge erred in finding that the Limitations Act did not apply to a cross-claim by the minister on behalf of a defendant pursuant to s. 8(2) of the Motor Vehicle Accident Claims Act. The cross-claim was out of time. However, the motion for summary judgment based on the limitations defence should be stayed. To allow it to succeed would simply delay the disposition of the case, at the expense of judicial economy and expeditious determination of the issues.

Cases referred to

Matt v. Crawford (2010), 103 O.R. (3d) 715, [2010] O.J. No. 3622, 2010 ONSC 3980, 97 C.C.L.I. (4th) 278 (S.C.J.), consd

Larkman Estate v. Briginshaw, [2007] O.J. No. 1656, 157 A.C.W.S. (3d) 71 (S.C.J.); Levesque v. Levesque, [2002] O.J. No. 4230, [2002] O.T.C. 843, 117 A.C.W.S. (3d) 880 (S.C.J.); Ortiz v. Dominion of Canada General Insurance Co. (2001), 2001 CanLII 24093 (ON CA), 52 O.R. (3d) 130, [2001] O.J. No. 27, 196 D.L.R. (4th) 732, 24 C.C.L.I. (3d) 25, [2001] I.L.R. I-3943, 10 M.V.R. (4th) 21, 102 A.C.W.S. (3d) 198 (C.A.); Shipman v. Dominion of Canada General Insurance Co. (2004), 2004 CanLII 33350 (ON CA), 73 O.R. (3d) 144, [2004] O.J. No. 4160, 190 O.A.C. 343, 16 C.C.L.I. (4th) 227, 5 M.V.R. (5th) 161, 134 A.C.W.S. (3d) 318 (C.A.); Van Kooten v. Day (1980), 1980 CanLII 1841 (ON SC), 31 O.R. (2d) 247, [1980] O.J. No. 3852, 20 C.P.C. 32 (Div. Ct.), distd

Other cases referred to

Chambo v. Musseau (1993), 1993 CanLII 8680 (ON CA), 15 O.R. (3d) 305, [1993] O.J. No. 2140, 106 D.L.R. (4th) 757, 65 O.A.C. 291, 19 C.C.L.I. (2d) 66, 49 M.V.R. (2d) 111, 42 A.C.W.S. (3d) 727 (C.A.); Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, [2008] O.J. No. 4523, 2008 ONCA 768, 76 C.L.R. (3d) 1, 170 A.C.W.S. (3d) 689 [page454]

Statutes referred to

Courts of Justice Act, R.S.O. 1990, c. C.43, s. 106

Criminal Code, R.S.C. 1985, c. C-46 [as am.]

Insurance Act, R.S.O. 1990, c. I.8 [as am.], ss. 121(1), para. 15.1 [as am.], 234(1), (3), 265, (1)

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4, 18(1), 19(1) [as am.], (2)

Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41, ss. 7(1) [as am.], 8, (1), (2), 22

Rules and regulations referred to

O. Reg. 777/93 (Insurance Act) [as am.], s. 4(1)

R.R.O. 1980, Reg. 535

Uninsured Automobile Coverage, R.R.O. 1990, Reg. 676 [as am.], s. 1, Schedule, s. 10.

APPEAL from the order of Heeney J. (2012), 112 O.R. (3d) 252, [2012] O.J. No. 3951, 2012 ONSC 4440 (S.C.J.) dismissing a motion for summary judgment.

Jonathan A. Schwartzman and James Tausendfreund, for appellant CAA Insurance Company (Ontario).

Jennifer Chapman, for respondent Kyle Cresswell.

The judgment of the court was delivered by

HOY J.A.: —

I. Overview

[1] The plaintiff and the defendant Kyle Cresswell ("Cresswell") were involved in an automobile accident. Cresswell was driving an uninsured vehicle.

[2] Ontario requires that all auto insurance policies provide uninsured automobile coverage. Therefore, in the normal course, the plaintiff's insurance company -- the defendant CAA Insurance Company (Ontario) ("CAA") -- would be liable to cover any amount that Cresswell is found to owe the plaintiff, up to policy limits. The plaintiff, however, breached the policy by knowingly driving with a suspended driver's licence and CAA denied coverage as a result.

[3] The Motor Vehicle Accident Claim Fund (the "fund"), Ontario's government-operated insurer of last resort, provides compensation to persons injured in an automobile accident where there is no other insurance that would cover the claim. The Minister of Finance, which administers the fund, brought a cross-claim against CAA on behalf of Cresswell, seeking a declaration that the plaintiff was entitled to coverage despite his breach of the policy. The cross-claim was filed more than two [page455] years after Cresswell had been served with the plaintiff's statement of claim.

[4] This appeal raises two issues.

[5] The first is whether the insured plaintiff's admitted breach of the policy -- knowingly driving with a suspended driver's licence -- disentitles him to uninsured automobile coverage under the policy. I conclude that it does not.

[6] The second issue is whether the minister's cross-claim is time-barred by virtue of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. I conclude that the Limitations Act applies and therefore the minister's cross-claim is out of time. However, for the reasons below, I would not give effect to the limitation period argument at this time.

[7] In the result, I would dismiss this appeal.

II. The Background

[8] The action arose out of a motor vehicle accident on November 11, 2006. The plaintiff, Shane Bruinsma, drove a vehicle owned and insured by his girlfriend.

[9] The plaintiff's driver's licence had been suspended as the result of a conviction under the Criminal Code, R.S.C. 1985, c. C-46 for driving with more than the prescribed limit of alcohol in his blood. While suspended, he was convicted for driving while disqualified, and his suspension was extended. As a result of the suspensions, the plaintiff was unable to obtain insurance for his vehicle.

[10] Subject to specified exceptions, a vehicle owner's standard automobile insurance policy covers persons, in addition to the owner, who use or operate the owner's vehicle. The plaintiff accordingly transferred his vehicle to his girlfriend for no consideration, and she proceeded to obtain the policy at issue with CAA. On the day of the accident, the plaintiff's girlfriend gave him the only set of keys to the vehicle, knowing that the plaintiff was disqualified from driving.

[11] The plaintiff alleges he suffered injuries as a result of Cresswell's negligence. On December 4, 2008, the plaintiff sued Cresswell; the uninsured vehicle's owner, Ronald Cresswell; and CAA. In its statement of defence and cross-claim, dated May 7, 2009, CAA asserted that the plaintiff was not entitled to coverage because he breached the policy by driving without a valid licence. CAA also cross-claimed against Cresswell and Ronald Cresswell.

[12] On May 26, 2011, the minister brought its cross-claim.

[13] CAA then brought a motion for summary judgment, seeking dismissal of the plaintiff's claim for uninsured automobile [page456] coverage under the policy and the cross-claim brought by the minister in the name of Cresswell. CAA argued both that the plaintiff was not entitled to coverage under the policy because he knowingly drove with a suspended driver's licence and that the minister's cross-claim on behalf of Cresswell was barred by the Limitations Act.

[14] Counsel for the plaintiff took no position on the summary judgment motion, and agreed to dismiss the action against CAA on a without costs basis. The only party that opposed CAA's motion for summary judgment was the minister, on behalf of Cresswell.

[15] The motion judge concluded that the plaintiff was covered by the policy, and that the Limitations Act does not apply to a cross-claim made by the minister on behalf of a defendant pursuant to s. 8(2) of the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41 (the "MVACA"). He accordingly dismissed CAA's motion for summary judgment.

[16] CAA appeals that order.

III. Interpretation of the Policy

(1) A framework

[17] The interpretation issue involves the interplay of the Insurance Act, R.S.O. 1990, c. I.8 (the "Act"); Uninsured Automobile Coverage, R.R.O. 1990, Reg. 676 ("Reg. 676"); the Schedule that forms part of Reg. 676 (the "Schedule"); and the auto insurance policy itself. All of these must be considered to determine if the plaintiff is entitled to uninsured automobile coverage under the policy.

(a) The [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-i8/latest/rso-1990-c-i8.html), Reg. 676 and the Schedule

[18] Since January 1, 1969, the Act has provided that certain "statutory conditions" -- including the condition that the insured not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it -- are deemed to be part of certain types of insurance contracts of automobile insurance.

[19] The current iteration of this deeming provision, s. 234(1) of the Act, was enacted on January 1, 1994. It provides:

234(1) The conditions prescribed by the regulations made under paragraph 15.1 of subsection 121(1) are statutory conditions and shall be deemed to be part of every contract to which they apply and shall be printed in English or French in every policy to which they apply with the heading "Statutory Conditions" or "Conditions légales", as may be appropriate. [page457]

[20] Until January 1, 1994, the statutory conditions were set out in the Act. Section 121(1), para. 15.1, also enacted on January 1, 1994, provided for the statutory conditions to be set out in a regulation to the Act:

121(1) 15.1 The Lieutenant Governor in Council may make regulations . . . for the purpose of section 234, prescribing statutory conditions and the types of contracts of automobile insurance to which the statutory conditions apply[.]

[21] O. Reg. 777/93, in force on January 1, 1994, prescribed the following statutory condition:

4(1) The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.

[22] This condition is identical to that set out in the Act prior to 1994: see R.S.O. 1990, c. I-8, s. 234(2)(5)(1).

[23] Significantly, on January 1, 1994, s. 234(3) was also enacted:

234(3) Except as otherwise provided in the contract, the statutory conditions referred to in subsection (1) do not apply to the insurance required by section 265 or 268.

(Emphasis added)

[24] Section 265 requires uninsured automobile coverage. Effective March 1, 1980, uninsured automobile coverage, which had been optional and limited in scope since 1969, became mandatory. The purpose of the provision was to spread the risk of uninsured drivers among drivers (through insurance policies) rather than among the tax base generally (through the fund): see Chambo v. Musseau (1993), 1993 CanLII 8680 (ON CA), 15 O.R. (3d) 305, [1993] O.J. No. 2140 (C.A.), at para. 11. Section 265(1) of the Act requires that every contract evidenced by a motor vehicle liability policy provide, inter alia, for payment to an insured of all sums the insured is entitled to recover from the owner or driver of an uninsured automobile as damages for bodily injury, "subject to the terms, conditions, provisions, exclusions and limits as are prescribed by the regulations".

[25] Section 1 of R.R.O. 1990, Reg. 676 provides that "[t]he terms, conditions, provisions, exclusions and limits set out in the following Schedule apply to payments under a motor vehicle liability policy under s. 265(1) of the Act and shall be attached to or included in every motor vehicle liability policy, as a Schedule in or to the policy". The content of this regulation is unchanged from its original enactment as R.R.O. 1980, Reg. 535.

[26] While statutory condition 4(1) is not set out in the Schedule [of R.R.O. 1990, Reg. 676], s. 10 of the Schedule provides: [page458]

10. In so far as applicable, the general provisions, definitions, exclusions and statutory conditions as contained in a motor vehicle liability policy also apply to payments under the contract under subsection 265(1) of the Act.

(Emphasis added)

[27] Section 234(3) of the Act made a substantive change to the existing statutory scheme for uninsured automobile coverage on January 1, 1994. Before it was enacted, the Act did not provide that the statutory conditions do not apply to the mandatory scheme of uninsured automobile coverage.

(b) The policy

[28] The policy is in the form known as the Ontario Automobile Policy (OAP 1) approved by the Superintendent of Financial Services for use as the standard owner's policy on or after June 1, 2005.

[29] OAP 1 is comprised of eight sections and an introductory summary at the beginning of the policy, which provides a summary of each of the sections. The summary and ss. 1, 5 and 8 are relevant to this appeal.

[30] The summary of s. 1 at the beginning of the policy provides:

Introduction contains information that applies to the entire policy. In order to understand what is covered and what is not covered by each coverage, you should read Sections 1 and 2 and the entire Section of the policy that deals with the specific coverage.

(Emphasis in original)

[31] Section 1.4 provides:

If you fail to meet your responsibilities, claims under this policy, with the exception of certain Accident Benefits, may be denied.

[32] Section 1.4.5 -- one of two provisions that CAA relies on to deny coverage -- specifies:

You agree not to drive or operate the automobile, or allow anyone else to drive or operate the automobile, when not authorized by law.

[33] Section 5 provides for uninsured automobile coverage. The summary of s. 5 of the policy provides:

Uninsured Automobile Coverage describes what we will cover if someone is injured or killed by an uninsured motorist or by a hit-and-run driver.

(Emphasis in original)

[34] Section 5.1.1 of the policy provides:

Uninsured Automobile Coverage Schedule

This Section of the policy describes the terms and conditions of the coverage set out in the Uninsured Automobile Coverage Schedule under the [page459] 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.

[35] Section 5.9.1 provides:

Conditions of This Policy Must be Met

No person has a right to sue us for compensation under this Section for injury or damage caused by an accident involving an uninsured or unidentified automobile, unless the conditions in this Section of your policy (Uninsured Automobile Coverage) have been met.

[36] The summary of s. 8 of the policy provides:

Statutory Conditions lists the conditions required by the Insurance Act for all automobile policies in Ontario. For convenience, the conditions have been included in each Section of the policy where they apply. If there is a discrepancy between the Statutory Conditions and the wording in the policy, the Statutory Conditions in Section 8 prevail.

(Emphasis added)

[37] CAA also relies on the statutory condition at s. 4(1) of s. 8 of the policy to deny coverage:

4(1) The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.

(2) The motion judge's reasons

[38] The motion judge's reasons can be summarized as follows.

[39] There is an irreconcilable conflict between s. 243(3) of the Act and s. 10 of the Schedule and where there is a conflict between a regulation and a statute, the statute prevails.

[40] The policy does not provide that the statutory conditions are to apply to uninsured automobile coverage. Indeed, s. 5.9.1 of the policy provides that no person has a right to sue for compensation under s. 5 of the policy "unless the conditions in this Section of your policy (Uninsured Automobile Coverage) have been met". Only a breach of one of the conditions in s. 5 will take away an insured's right to uninsured automobile coverage. There is no term in s. 5 which provides for a denial of coverage where the vehicle is driven, or permitted to be driven, by a person who is not authorized by law to drive.

[41] Section 1.4 of the policy provides that, "If you fail to meet your responsibilities, claims under this policy, with the exception of certain Accident Benefits, may be denied." Section 1.4.5, on which CAA also relies, follows, s. 1.4. A clause that states that claims "may be denied" cannot clearly be found to preclude access to uninsured automobile coverage: see [page460] Matt v. Crawford (2010), 2010 ONSC 3980, 103 O.R. (3d) 715, [2010] O.J. No. 3622 (S.C.J.). Moreover, the clause must be included in s. 5 of the policy to take away an insured's right to uninsured automobile coverage. Therefore, a breach of s. 1.4.5 does not entitle CAA to deny coverage.

(3) Analysis

[42] I agree with the motion judge's conclusion that the plaintiff is not disentitled to uninsured automobile coverage under the policy because he drove without a valid licence, although my reasoning is somewhat different.

[43] In my view, both provisions of the policy CAA relies on to deny coverage -- s. 1.4.5 and s. 4(1) of s. 8 -- are "statutory conditions". As such, pursuant to s. 234(3) of the Act, they do not apply to uninsured automobile coverage unless otherwise provided in the contract. On my reading, the contract at issue, OAP 1, does not otherwise provide. Accordingly, CAA cannot rely on them to deny coverage.

(a) Sections 1.4.5 and 4(1) of s. 8 are statutory conditions

[44] I address first my conclusion that both s. 1.4.5 and s. 4(1) are statutory conditions.

[45] The wording of s. 1.4.5 is the same in all material respects to that of statutory condition 4(1), and the insurer indicated in its summary of s. 8 of the policy that statutory conditions have been included in each section of the policy where they apply, for convenience. Consequently, in my view, s. 1.4.5 is a statutory condition included in s. 1 for convenience.

[46] This conclusion makes it unnecessary to embark on the separate analysis of s. 1.4.5 conducted by the motion judge on the basis that it was a general term of the policy, and not a statutory condition.

[47] I will, however, comment that I do not endorse the motion judge's reasoning that a clause, such as s. 1.4 of the policy, providing that an insurer "may" deny coverage, cannot preclude coverage. Such an interpretation would render s. 1.4 meaningless. To the extent that Matt v. Crawford relied on the same reasoning, I disagree with that case.

[48] On the basis that s. 1.4.5 was a general provision of the policy, and not a statutory condition, CAA argued that the motion judge also erred in concluding that the provision had to be included in s. 5 of the policy to take away the insured's right to uninsured automobile coverage. This, it submits, ignores this court's decisions in Ortiz v. Dominion of Canada General Insurance Co. (2001), 2001 CanLII 24093 (ON CA), 52 O.R. (3d) 130, [2001] O.J. No. 27 (C.A.); and [page461] Shipman v. Dominion of Canada General Insurance Co. (2004), 2004 CanLII 33350 (ON CA), 73 O.R. (3d) 144, [2004] O.J. No. 4160 (C.A.).

[49] In Ortiz, this court found that the general provision in the insurer's standard motor vehicle policy limiting coverage to accidents occurring in Canada or the United States applied to the uninsured automobile coverage mandated by the Act through the operation of s. 10 of the Schedule.

[50] In Shipman, this court held that the exclusion of coverage where an automobile is used without the owner's consent, set out in s. 1.8.2 of the policy, applied to uninsured automobile coverage.

[51] This case is quite different from both Ortiz and Shipman. The general provisions considered in those cases were not statutory conditions, and neither s. 234(3) nor a comparable provision applied.

(b) The policy does not otherwise provide that the statutory condition is to apply

[52] The next question to be addressed is whether the contract "otherwise provides" that the statutory condition shall apply to the uninsured automobile coverage.

[53] I am not persuaded by CAA's argument that s. 10 of the Schedule is part of the policy, either by operation of s. 5.1.1 of the policy itself or by virtue of Reg. 676; s. 10 of the Schedule provides that the statutory conditions are to apply to uninsured automobile coverage; and the contract therefore "otherwise provides" that the statutory conditions are to apply to uninsured automobile coverage.

[54] As indicated above, the motion judge concluded that there was an irreconcilable conflict between s. 234(3) of the Act and s. 10 of the Schedule. The Act provides that statutory conditions do not apply to uninsured automobile coverage unless the contract otherwise provides; the Schedule to Reg. 676 provides that in so far as applicable, the statutory conditions apply. As the motion judge noted, it is an established principle of statutory interpretation that regulations are subordinate legislation and in the event of conflict with the statute, the statute prevails. Therefore, he reasoned, in light of this conflict, the Act prevails over the Schedule, the statutory conditions do not apply to uninsured automobile coverage unless the policy otherwise provides, and the policy does not "otherwise provide".

[55] My reasoning is different.

[56] If one considers the sequence in which the provisions were enacted, the apparent conflict between s. 234(3) of the Act [page462] and s. 10 of the Schedule is resolved, although CAA's position must nonetheless be rejected.

[57] As discussed above, in 1969, the legislature first enacted optional uninsured automobile coverage. At the same time, it specified various conditions -- the "statutory conditions" -- that were deemed to be part of every motor vehicle insurance contract to which they applied. In 1980, uninsured automobile coverage became mandatory.

[58] In 1994, the legislature amended the Act to provide that the statutory conditions do not apply to uninsured automobile coverage "except as otherwise provided".

[59] It did not amend any part of Reg. 676.

[60] Significantly, s. 10 of the Schedule begins with the words "In so far as applicable . . .". In my view, by subsequently enacting a statutory provision that specifically provides that "[e]xcept as provided in the contract" the statutory conditions do not apply to uninsured automobile coverage, the legislature signified that the statutory conditions are not applicable to uninsured automobile coverage unless the contract itself explicitly otherwise provides. Accordingly, statutory condition 4(1) does not apply to uninsured automobile coverage under the policy either by operation of s. 5.1.1 of the policy or by virtue of Reg. 676.

[61] I agree with the motion judge that the policy does not otherwise provide that the statutory conditions are to apply to uninsured automobile coverage.

[62] The summary of s. 1 at the beginning of the policy indicates that s. 1 contains information that applies to the entire policy. In my view, this is not sufficient to override the statutory directive that statutory conditions do not apply to uninsured automobile coverage and make s. 1.4.5 applicable to the uninsured automobile coverage in s. 5 of the policy.

IV. The Limitation Period Issue

[63] I agree with the appellant that the motion judge erred in concluding that the effect of s. 8 of the MVACA is that the Limitations Act does not apply to the minister's cross-claim on behalf of Cresswell.

[64] Cresswell was served with the statement of claim on January 27, 2009. Notice of the defendant Cresswell's default in filing a statement of defence was sent to the minister on November 5, 2009, as required by s. 8(1) of the MVACA. This triggered the application of s. 8(2) of the MVACA:

8(2) Within thirty days after receiving notice under subsection (1), the Minister may file a defence, make payment into court, appear by counsel at the trial or take such other action as he or she considers appropriate on [page463] behalf and in the name of the defendant, and may thereupon, on behalf and in the name of the defendant, conduct the defence, and may, where he or she considers it advisable to do so, consent to judgment in such amount as he or she may consider proper in all the circumstances, and all acts done in accordance therewith shall be deemed to be the acts of such defendant.

[65] After receiving notice, the minister could not intervene immediately on Cresswell's behalf because he was represented by counsel at the time. By July 22, 2010, Cresswell's counsel indicated he would remove himself from the record so that the minister could become involved.

[66] On March 25, 2011, some 16 and a half months after receiving notice, the minister forwarded a statement of defence and cross-claim on behalf of Cresswell to the other parties. On April 4, 2011, counsel for the fund filed a requisition to have the noting in default of Cresswell set aside. On May 26, 2011, the statement of defence and cross-claim was formally filed.

[67] The motion judge found, and it is conceded, that if the Limitations Act applies to cross-claims by the minister under s. 8(2) of the MVACA, the cross-claim is time-barred: s. 4 of the Limitations Act establishes a two-year limitation period, and the effect of s. 18(1) of the Limitations Act is that the limitation period began to run when Cresswell was served with the statement of claim on January 27, 2009. It had therefore expired by March 27, 2011, when the statement of defence and cross-claim was served.

[68] Section 19(1) of the Limitations Act provides that the limitation period set out in any other Act is of no effect unless the provision establishing it is listed in the Schedule to the Limitations Act. The MVACA is not listed in the Schedule.

[69] The motion judge concluded that a defendant who is being represented by the minister is treated differently from a regular defendant. He cited Levesque v. Levesque, [2002] O.J. No. 4230, [2002] O.T.C. 843 (S.C.J.); Larkman Estate v. Briginshaw, [2007] O.J. No. 1656, 157 A.C.W.S. (3d) 71 (S.C.J.); and Van Kooten v. Day (1980), 1980 CanLII 1841 (ON SC), 31 O.R. (2d) 247, [1980] O.J. No. 3852 (Div. Ct.); for the principle that the fund's rights to defend under s. 8(2) of the MVACA cannot be taken away through the default of the defendant personally. He accordingly reasoned that the Limitations Act does not affect the minister's right to defend.

[70] The motion judge also concluded that dismissing the cross-claim would "allow form to triumph over substance". The fund is an insurer of "last resort". Section 22 of the MVACA provides that no amount shall be paid or payable out of the fund in respect of an amount paid or payable by an insurer by reason of the existence of a policy of insurance. If the cross-claim [page464] were dismissed, and the plaintiff proceeded to obtain judgment against Cresswell and then seek payment out of the fund pursuant to s. 7(1) of the MVACA, the fund could assert in defence that it did not have to pay because the policy should have responded. The issue of coverage would then be determined. Since the identical issue would eventually be decided, the motion judge elected to avoid a multiplicity of proceedings by finally deciding the issue.

[71] The cases relied upon by the fund and the motion judge must, in my view, be distinguished. As explained below, none addresses the issue of the application of the Limitations Act. Moreover, the limitation argument in this case appears to have arisen as a result of delay by the fund and not through any default of the defendant personally.

[72] Levesque and Larkman held that s. 8(2) permitted the minister to initiate third party proceedings notwithstanding that such proceedings were not mentioned in s. 8(2). Such proceedings were within the minister's authority to "conduct the defence".

[73] Van Kooten held that the minister's right to defend under s. 8 of the MVACA could not be taken away by the inability to produce the defendant for discovery. Larkman applied that to the minister's right to bring a third party claim. The issue was whether the minister could continue to conduct a defence and maintain a third party claim in the name of the defendant without requiring the defendant to attend an examination for discovery.

[74] I agree with the motion judge that nothing would be gained by permitting CAA's summary judgment motion to proceed, to the extent it relies on the Limitations Act. However, in my view, given the clear wording of s. 19(2) of the Limitations Act, it was not open to the motion judge to conclude that the Limitations Act is not applicable to the minister under the MVACA.

[75] I would come to the same result as the motion judge by instead staying CAA's summary judgment motion to the extent founded on the limitation argument, on this court's own initiative pursuant to s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43. This section permits a court to stay any proceeding "on such terms as are considered just".

[76] In Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, [2008] O.J. No. 4523, 2008 ONCA 768, 76 C.L.R. (3d) 1, at para. 4, this court observed that "the risk of multiplicity of proceedings, the avoidance of cost and [page465] inconvenience[,] and the risk of inconsistent results are factors to be taken into account in the exercise of the discretion conferred by [s. 106]". In my view, all of these factors strongly militate towards staying the CAA's limitations defence. To allow it to succeed would simply delay the disposition of this case, at the expense of judicial economy and expeditious determination of the issues.

V. Disposition and Costs

[77] In the result, I would dismiss the appeal.

[78] The parties agreed that the successful party would be entitled to costs of $7,500, inclusive of disbursements and applicable taxes. I would accordingly award Cresswell costs in such amount.

Appeal dismissed.

End of Document