COURT FILE NO.: CV-08-091811-A2
DATE: 20121120
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Hope Warga, by her Litigation Guardian Deborah Warga, Deborah Warga personally, Brent Warga, Grant Warga, and Jeffrey Warga
Plaintiffs
– and –
Robert Rivard, Litigation Administrator for the Estate of Vanessa Rivard, deceased, Janine Rivard, Marvin Stapleton, Evergreen Farm & Garden Ltd., The Regional Municipality of Durham, and ING Insurance Company of Canada
Defendants
– and –
John Semplonius and Elizabeth Semplonius
Third Parties
Robert Sugar, for the Plaintiffs
Christopher Valente, for the Defendants, Marvin Stapleton and Evergreen Farm & Garden Ltd.
Robert Sutherland, for the Defendants, Robert Rivard and Janine Rivard
HEARD: November 2, 2012
REASONS FOR DECISION
eDWARDS j.
[1] One of a number of potentially at fault defendants (the “Rivard Defendants”) wishes to advance pay its insurance policy limits of $1 million to the plaintiffs. The plaintiff, Hope Warga, suffered such grievous injuries that she is represented by her mother who is a litigation guardian and who is also appointed as the guardian of her property pursuant to the order of Maddalena J. dated September 17, 2007. Given these circumstances, the advance payment requires court approval. One of the other potentially at fault defendants, Marvin Stapleton and Evergreen Farm & Garden Ltd. (the “Stapleton Defendants”) opposes such court approval. All of the other defendants consent to the terms of the draft judgment placed before this court.
[2] Counsel for the Stapleton Defendants suggest that in order for the court to approve the payment to the plaintiff, this court must be satisfied that the payment will benefit the plaintiff. It is suggested that the payment will not benefit the plaintiff at this point in time as the plaintiff has already received a substantial sum of money from her accident benefit insurer, which will more than look after the plaintiff’s immediate needs. Underlying the position of the Stapleton Defendants is the suggestion that the only party to benefit from the advance payment will be the plaintiffs’ solicitors who will receive a substantial sum of money that can then be used to fund the continued litigation against the remaining defendants who have not made any advance payment.
[3] The Rivard Defendants who wish to make the advance payment have not admitted liability. Counsel appointed to represent the Rivard Defendants is providing them with a defence pursuant to a standard motor vehicle automobile insurance policy. As such, it would be fundamentally improper for their insurer to admit liability unless these defendants received a full and final release in return. It is argued by the Stapleton Defendants that section 256 of the Insurance Act does not contemplate an advance payment in the manner suggested in this case and refers to section 256(4), which provides:
The intention of this section is to permit payments to a claimant without prejudice to the defendant or the defendant’s insurer, either as an admission of liability or otherwise, and the fact of any payment shall not be disclosed to the judge or jury until after judgment but before formal entry thereof. (emphasis added)
[4] It is noted that the purpose of section 256(4) is to permit an advance payment either as an admission of liability or “otherwise”. If the position of the Stapleton Defendants was accepted, then the Rivard Defendants could be precluded from making an advance payment that not only would benefit the plaintiff (whether now or in the future), but will also benefit the Rivard Defendants as pre-judgment interest will stop accruing on the general damage component of any damages awarded to the plaintiff at trial.
[5] In argument, I enquired of counsel for the Stapleton Defendants whether there was any prejudice that he could direct me to that his client would suffer if this court approves the advance payment, part of which would be used to pay the costs incurred by plaintiffs’ counsel to date. In response, counsel for the Stapleton Defendants suggested that the entirety of the advance payment should go into a structured annuity and that by implication nothing should be paid to counsel for the plaintiffs. By approving the cost component of the draft judgment, it was argued that plaintiffs’ counsel now has the funding to continue this law suit.
[6] Even if this court were to have considered that the only reason why plaintiffs’ counsel was seeking approval of the advance payment was to obtain payment of his costs and disbursements incurred to date and thereby allow him to continue with this law suit, one may question how this would not be in the best interest of the plaintiff. The plaintiff’s needs are unquestionably substantial and the continuation of this claim would clearly appear to be in the plaintiff’s best interest. That said, however, I do not for a moment consider that plaintiffs’ counsel would not have continued this action if the court were not to approve the cost component of the draft judgment. I do not accept that any of the defendants, including the Stapleton Defendants, are prejudiced in any way by the terms of the draft judgment and advance payment.
[7] If an insurer on behalf of a defendant, like the Rivard Defendants, wishes to make an advance payment pursuant to section 256 of the Insurance Act to a party under disability, they should be encouraged to do so. While in the circumstances of this case, the payment is not made as an admission of liability, section 256(4) contemplates situations like the before this court when the words “or otherwise” are taken into account.
[8] Once liability issues have been fully investigated and an insurer is satisfied that some or all of the liability for an automobile accident will rest with its insured, an insurer like the Rivard Defendants’ insurer, absent evidence of real prejudice, should not be precluded by another defendant’s insurer from making an advance payment.
[9] I am satisfied that the terms of the proposed judgment and the advance payment proposed to be made by the insurer for the Rivard Defendants will benefit the plaintiffs both now and in the future. The terms of the draft judgment are approved.
[10] As to the question of the costs of this motion, Mr. Sugar and Mr. Valente both agreed that depending upon the success of the motion an appropriate figure of $1500.00 for costs should be awarded to the successful party. As such, the Stapleton Defendants shall pay the costs of this motion to the plaintiffs fixed in the amount of $1500.00.
Justice M.L. Edwards
Released: November 20, 2012