BARRIE COURT FILE NO.: CV-10-0896
DATE: 2012-07-25
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: DEBORAH HOWELL-LILLEPOOL and RAIVAO LILLEPOOL, Plaintiffs
AND:
DOUGLAS SMITH, FIRST CANADA ULC, FIRST STUDENT CANADA, LAIDLAW TRANSIT LIMITED, AND MANUFACTURERS LIFE INSURANCE COMPANY and INTACT INSURANCE COMPANY, Defendants
BEFORE: HEALEY, J.
COUNSEL:
A. Little, Counsel, for the Plaintiff
J. Beleskey, Counsel, for the Defendants
HEARD: July 24, 2012
ENDORSEMENT
[ 1 ] The defendant Intact Insurance Company ("Intact") moves pursuant to Rule 51.05 of the Rules of Civil Procedure to withdraw admissions in its statement of defence. Intact is an insurance company that issued a policy of automobile insurance to the plaintiff, pursuant to which she alleges being entitled to coverage arising from an alleged collision. Although amendments to the pleading are sought that would affect multiple admissions, the admissions that the plaintiff objects to being withdrawn are those that currently admit that the plaintiff is entitled to statutory accident benefits. Intact now wishes to deny that the plaintiff was involved in a motor vehicle accident on the date in question, and seeks to deny all entitlement to coverage for benefits available pursuant to the Statutory Accident Benefits Schedule .
[ 2 ] Deborah Neilson, Intact's counsel, swore an affidavit in support of the motion indicating that she believes that her client has paid the statutory accident benefits on the erroneous basis that the plaintiff was involved in a motor vehicle accident. It is alleged by the plaintiff that she was the driver of a westbound vehicle when it was struck by a school bus being driven by the defendant Smith as it made a left-hand turn in front of the plaintiff. On discovery the defendant Smith gave evidence supporting his belief that there was no contact between the bus and the plaintiff's vehicle.
[ 3 ] The three-part test to be satisfied by Intact for withdrawal of an admission is set out in Antipas et al. v. Coroneos et al. , 1988 10348 (ON SC) , 1988 CarswellOnt 358 (Ont. H.C.) at paras. 14 and 20 , later confirmed by the Ontario Court of Appeal in Szelazek Investments Ltd. v. Orzech , 1996 CarswellOnt 274 (Ont. C.A.) as follows:
The proposed amendment must raise a triable issue;
The party is able to furnish a reasonable explanation for the change in position; and
The withdrawal of the admission would not result in any prejudice that could not be compensated in costs.
[ 4 ] The first two branches of the test are easily met in this case.
[ 5 ] The admissions sought to be withdrawn by Intact go further than just whether there was contact between the two vehicles in question. The plaintiff argued that under the "direct cause" test set out in Amos v. Insurance Corp. of British Columbia (1995), 1995 66 (SCC) , 127 D.L.R. (4 th ) 618 (S.C.C.), modified by the Ontario Court of Appeal in Chisholm v. Liberty Mutual Group (2002), 2002 45020 (ON CA) , 60 O.R. (3d) 776 (C.A.) and Greenhalgh v. ING Halifax Insurance Co . (2004), 2004 21045 (ON CA) , 72 O.R. (3d) 338 (C.A.), it is not necessary for there to have been contact between the vehicles for an “accident” to have occurred, as defined in s. 2(1) of the Statutory Accident Benefits Schedule . The plaintiff's counsel took the position that it is therefore not a triable issue, as between the Intact and the plaintiff, as to whether contact was made with her vehicle by the defendant Smith. I disagree. In this case the plaintiff alleges that her damages flow from the injuries suffered when her vehicle was hit, causing her the impairments that entitle her to statutory accident benefits. Accordingly, both liability and causation, as it relates to Intact's obligations under the policy, are directly placed into issue if no collision occurred as alleged.
[ 6 ] The rationale for seeking to now withdraw the admissions has been reasonably explained by Ms. Neilson in her affidavit. Her evidence, in summary, was that there was no information in her client' s possession at the time that she drafted the defence that would have led her to believe that a collision had not occurred. Particularly given that the police accident report indicates a collision between the vehicles, Intact was only confronted with this new fact scenario following the taking of Mr. Smith's evidence on his examination for discovery.
[ 7 ] The problematic aspect of this motion relates to the third prong of the test, that of prejudice. The evidence filed on behalf of the plaintiff on this motion is that she began to receive payment of accident benefits as of November 12, 2008, and has been paid approximately $180,000 to date for a combination of medical and rehabilitation, income replacement, housekeeping and home maintenance, and attendant care benefits. As she has reached the maximum allowable claim for many of these benefits, payments are no longer being made by Intact. Counsel for Intact also provided the further explanation that some medical documentation has not been provided, and coverage accordingly suspended or denied. The plaintiff argues that the retraction of all admissions that she is entitled to such benefits leaves her exposed to the potential outcome of having to repay those sums to Intact. Intact has addressed this concern in the affidavit of Ms. Neilson, which states that paragraph 15: "Intact is not at this point in time seeking the repayment of statutory accident benefit monies paid out in error to the plaintiff on the basis the plaintiff was not involved in an "accident" as defined in s. 2(1) of the Statutory Accident Benefits Schedule ".
[ 8 ] The question for this court is whether the spectre of a potential request for repayment is sufficient to meet the prejudice test. In Chavez v. Sundance Cruises Corp . [1993], B.C.J. No. 577 (B.C.C.A.) , the British Columbia Court of Appeal, in considering whether to permit an appeal of an order that allowed an amendment to a reply pleading, wrote at paras. 11 and 12:
11 The purpose of the trial process is to resolve all of the issues between the parties on the merits. That was in the mind of Mr. Justice Errico when he granted the amendment. Mr. Justice Lambert weighed the prejudice to the plaintiffs against that to the defendants if leave to appeal is granted in what he described as this "procedural pleadings matter" and found in favour of the plaintiffs.
12 Finally, as to the appellants' submission that this amendment is a withdrawal of an admission, the test is set out by Chief Justice Nemetz referred to in the judgment of Macfarlane, J.A. in Norlympia Sea Foods v. Dale (1982), 1982 491 (BC CA) , 41 B.C.L.R. 145, when referring to the case of Robertson v. Batchelor , 1935 384 (BC SC) , 49 B.C.R. 559, [[1935] 2 W.W.R. 29]:
Robertson v. Batchelor , 1935 384 (BC SC) , 49 B.C.R. 559 , [[1935] 2 W.W.R. 29]. Chief Justice Nemetz summed it up in this way:
It seems to me what the learned Chief Justice was saying was that a judicial admission should be allowed to be withdrawn if, in the circumstances, the court is satisfied that it is in the interest of justice to withdraw same.
[ 9 ] With the principle in mind of ensuring that cases are tried on their merits, it seems to this court that the just outcome in this case would be to permit the amendments. The prejudice of exposure to repayment of benefits is not the sort of prejudice that a court should take into consideration. Similarly, the additional prejudice that was argued, being that the plaintiff would be denied the opportunity for further benefits that have higher limits if the plaintiff is found to be catastrophically impaired, should not be taken into account. Prejudice cannot be said to occur if the plaintiff is required to repay or is denied benefits that she may have never been entitled to in the first place. And at this stage there is no evidence of actual prejudice. No demand for repayment has been made and, ultimately , the trial process will become the forum in which such an issue, if properly raised by Intact, will be addressed.
[ 10 ] Accordingly, I find that the moving party has met the three-part test for withdrawal of admissions pursuant to Rule 51.05.
[ 11 ] Alternatively, the plaintiff argues that the proposed amendments to the statement of defence should not be allowed on the basis of the doctrine of estoppel. Her counsel argues that, having paid the statutory accident benefits to the plaintiff over a period of years, Intact should now be a estopped from attempting to disentitle the plaintiff to such benefits. As earlier indicated, no benefits are currently being paid to the plaintiff. In the result, there is no ongoing reliance created by Intact's prior decision to pay benefits to the plaintiff. Accordingly, I find that this is not a fact situation to which this equitable doctrine can properly be applied.
[ 12 ] Intact's motion is granted. Intact is granted leave to amend that statement of defence in the form included at tab 2(b) of its motion record.
[ 13 ] If the parties are unable to agree upon costs they may make brief submissions in writing on a timetable agreed upon by counsel, but all submissions to be filed to the office of the trial co-ordinator by no later than August 10, 2012.
HEALEY, J.
Date: July 25, 2012