Court of Appeal for Ontario

Date: 2019-01-28 Docket: C65473 Judges: Brown, Paciocco and Zarnett JJ.A.

Parties

Between

Mary Kampers, Sharral Kampers, Bill Kampers and Montana Mason by her litigation guardian Mary Kampers

Plaintiffs (Respondents)

and

York Fire & Casualty Insurance Company

Defendant (Appellant)

Counsel

Todd J. McCarthy and Richard J. Campbell, for the appellant

Karl Arvai, for the respondents

Hearing and Lower Court

Heard: January 18, 2019

On appeal from: The order of Justice Marc A. Garson of the Superior Court of Justice, dated May 25, 2018, with reasons reported at 2018 ONSC 3000, 81 C.C.L.I. (5th) 80

Reasons for Decision

Background

[1] The respondent, Mary Kampers, was injured in 2005 in a motor vehicle accident in Las Vegas, Nevada. All claims arising from the accident have been settled, with the exception of her entitlement against the appellant, York Fire & Casualty Insurance Company, to benefits under the OPCF 44R Endorsement in her Ontario motor vehicle insurance policy.

[2] During a June 30, 2016 pre-trial, counsel for the appellant and counsel for the respondents expressed agreement before the pre-trial judge that Ontario law applies to their dispute. Both counsel signed a Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 50.08(3) certificate confirming their understanding of the contents of the pre-trial conference report that recorded: "The choice of law issue is resolved – Ontario law applies".

[3] The application of Ontario law would mean that the potential recovery for damages would be limited by provisions in the Insurance Act, R.S.O. 1990, c. I-8. If Nevada law applies those statutory limits would not operate.

[4] The way in which the initial consensus regarding the application of Ontario law came about is relevant to this appeal.

The Choice of Law Correspondence

[5] In an August 6, 2015 email, the respondents' counsel expressed the view that Nevada law applies but asked, "if you are of a different view, please advise." By letter dated June 13, 2016, the appellant's counsel wrote to the respondents' counsel saying:

I am of the view that Ontario law applies to the assessment of damages in this matter and, as such, the threshold and the collateral benefits provisions of the Ontario Insurance Act would apply. Section 10 of the OPCF 44 Endorsement in my view is applicable.

[6] In fact, the view that the threshold and collateral benefit provisions of the Ontario Insurance Act would apply is contrary to this court's decision in Chomos v. Economical Mutual Insurance Co. (2002), 61 O.R. (3d) 28 (C.A.). According to Chomos, properly interpreted, s. 10 of the OPCF 44R Endorsement provides that questions of threshold and collateral benefits are issues of liability to be governed by the law of the place where the accident occurred, in this case, Nevada. In his affidavit explaining his view on the applicable choice of law at the time, the appellant's counsel explained: "I happen to believe that Chomos had been wrongly decided".

[7] After the matter was discussed during the June 30, 2016 pre-trial, the respondents' counsel, unaware of the Chomos decision, agreed with the appellant's counsel's position and signed the r. 50.08(3) pre-trial conference report certificate described above.

Discovery of Chomos and Second Pre-Trial

[8] Subsequent to the June 30, 2016 pre-trial, the respondents' counsel learned of the Chomos decision. When a second pre-trial was held on January 25, 2018 the respondents' counsel explained that he was now of the view that Nevada law should apply. The pre-trial conference report from the second pre-trial records: "Contrary to note of Leitch J. in pretrial memo of June 30/16, choice of law is not resolved" (emphasis in original).

Motion and Cross-Motion

[9] The appellant took the position that the parties had reached a binding "litigation agreement" on June 30, 2016, requiring Ontario law to be used. The respondents disagreed and brought a motion to determine the law to be applied. The appellant brought a cross-motion seeking a declaration that the choice of law question was resolved by binding litigation agreement and that Ontario law is to be used.

[10] The motion judge dismissed the appellant's cross-motion and declared that Nevada law will apply. These are final decisions that the appellant now appeals.

Issues on Appeal

[11] Of note, the appellant does not take issue before us with the motion judge's finding that Chomos governs this case in the absence of a binding choice of law agreement. The appellant argues instead that the motion judge's decision that the parties did not reach a binding litigation agreement is "both legally incorrect and reliant upon incorrect principles of law", and should be overturned based on a correctness standard. It seeks a declaration that, as agreed between the parties, Ontario law applies.

[12] The respondents argue that the motion judge's decisions were discretionary and based on findings of fact that should not be disturbed. They are entitled to deference, absent palpable and overriding errors or an error in principle. They urge that no such palpable or overriding errors or errors in principle occurred.

[13] We agree with the respondents, and dismissed the appeal at the end of the oral hearing, with reasons to follow. These are our reasons.

Analysis

No Binding Litigation Agreement

[14] The motion judge's decision that what occurred on June 30, 2016 was not a litigation agreement, but rather an admission by the respondents' counsel based on a misunderstanding of the law attracts deference, and we would not interfere.

[15] The exchange of correspondence relating to the applicable law does not reflect a negotiation. The relevant communications do no more than express competing views about the applicable law. It was in this context that the motion judge had to determine whether it was a litigation agreement or a simple admission that occurred when the respondents' counsel ultimately agreed, after further discussion at the June 30, 2016 pre-trial, that Ontario law applies.

[16] In making that determination, the motion judge concluded, as he was entitled to, that the respondents would have had no reason to negotiate for the application of Ontario law, since the application of Ontario law would clearly prejudice the respondents' interests. In reaching this conclusion, the motion judge was entitled to reject the appellant's argument that the respondents may have intended to enter a litigation agreement to obtain the mutual benefit of litigation efficiency. The respondents' counsel swore that there had been no discussions about streamlining the process. The motion judge also noted that the manner in which the litigation was being conducted is inconsistent with the possibility that the respondents would view potential litigation efficiencies achieved by applying Ontario law as creating a net benefit or a reason to agree to choose Ontario law. Simply put, the respondents' agreement that Ontario law applies is consistent with a concession or admission, but not a bargain.

[17] In this context, the evidence of the respondents' counsel that he had mistakenly acquiesced to the defence position, not being aware of Chomos, resonated. The motion judge was entitled to accept it. The respondents' counsel was not intending to enter into a litigation agreement, but rather, simply making an admission. That being so, as the motion judge put it using the language of commercial contracts, there was no consensus ad idem between the parties to enter a binding agreement to apply Ontario law.

Pre-Trial Conference Report Certificate

[18] The fact that the respondents' counsel signed the June 30, 2016 pre-trial conference report certificate does not prove otherwise. A pre-trial conference report is a case management tool. According to the terms of r. 50.08(3), when parties sign a pre-trial conference report certificate they are confirming their understanding of the report and acknowledging their obligation to be ready to proceed. They are not entering into a binding litigation agreement with the other party. Were that the case, the respondents could argue that when the appellant's counsel signed the January 25, 2018 pre-trial conference report certificate he was agreeing that the choice of law question has not been settled. We would not interfere with the motion judge's conclusion that what was recorded in the r. 50.08 report was an admission, "not something the parties separately negotiated or reduced to writing themselves."

[19] In all of the circumstances, there was ample basis for the motion judge to come to the decision he did.

Withdrawal of Admission

[20] Nor was the discretionary decision by the motion judge to grant leave to the respondents to withdraw their choice of law admission, by analogy to Rules of Civil Procedure, r. 51.05, based on any palpable or overriding errors or errors in principle. The motion judge's findings that (1) the admission that Ontario law applies was made through inadvertence, (2) it was prejudicial to the respondents, and (3) it is possible to compensate the appellant in costs for any prejudice that may arise, are supportable. In these circumstances, we would not interfere with the motion judge's decision to release the respondents from their admission.

[21] The motion judge indicated that even if he was wrong and there was a litigation agreement, he would exercise his discretion to permit the respondents to resile from that agreement. Given that we would not interfere with the motion judge's conclusion that there was no litigation agreement, or his decision that the respondents should be permitted to withdraw their choice of law admission, we need not decide whether this alternative decision was in error.

Disposition

[22] The appeal is dismissed. The appellant shall pay costs to the respondents in the amount of $5,000 inclusive of disbursements and applicable taxes, and inclusive of costs in the respondents' earlier unsuccessful motion to strike this appeal.

"David Brown J.A."

"David M. Paciocco J.A."

"B. Zarnett J.A."