SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: C-923-10
DATE: 2013-02-22

RE: Akbar Kalabi, Plaintiff

and

Egal Egal and Kadija H. Farah, Defendants

and

State Farm Automobile Insurance Company, added by
Order pursuant to section 258(14) of the Insurance Act,
R.S.O. 1990 c.I.8 as amended

BEFORE: The Honourable Mr. Justice D.J. Gordon

COUNSEL:
D.A. Johnson for Moving Party/Defendants
L. Emmett for Responding Party/Third Party
No one appearing for Plaintiff

HEARD: February 14, 2013

ENDORSEMENT

[1] In their motion, the defendants seek an order directing the third party to defend the action on their behalf or, in the alternative, on behalf of Ms. Farah.

Background

[2] A motor vehicle accident occurred on December 8, 2009. It is alleged that the plaintiff, Mr. Kalabi, was walking through a parking lot in Kitchener when he was struck by a motor vehicle operated by Mr. Egal. The vehicle was owned by Ms. Farah and insured by State Farm. In his statement of claim, Mr. Kalabi claims damages of $1,000,000.00.

[3] Mr. Egal had a G1 driver’s licence at the time. He did not have the required licensed passenger with him. There is an issue as to whether Ms. Farah permitted her son to operate the vehicle without such passenger. Mr. Egal was charged and convicted of certain undisclosed criminal offences, resulting in incarceration.

[4] State Farm conducted an investigation into the accident. Part of this process involved a meeting between its former counsel and Ms. Farah on Febraury 25, 2010. An interpreter was provided for Ms. Farah. The questions and answers were reduced to writing and forwarded to Ms. Farah for approval. She signed the document but without the use of an interpreter.

[5] The statement suggests Mr. Egal had permission to drive the vehicle. Ms. Farah now says he did not and adds that the statement does not fully reflect all relevant events.

[6] State Farm notified Mr. Egal and Ms. Farah on May 27, 2011 that coverage for the accident was denied.

[7] State Farm’s motion to be added as a statutory third party pursuant to section 258(14) of the Insurance Act was granted on November 14, 2011. It filed a statement of defence on January 30, 2012. State Farm alleges, inter alia, that Mr. Kalabi and Mr. Egal were involved in a joint venture.

[8] It is reported that the plaintiff has commenced a separate action against his own insurer. Plaintiff’s counsel is said to have informed defendants’ counsel of his desire for the within matter to be dealt with so that he can determine if the companion action is required.

[9] Plaintiff’s counsel did not participate in this motion. Quite frankly, on the evidentiary record presented, it appears the companion action is necessary in any event.

[10] The defendants have not filed a statement of defence.

Issue

[11] The issue requiring determination is whether a statutory third party is required to defend the action on behalf of the defendants in the circumstances of this case.

Analysis

[12] Counsel agree the leading case is Longo v. Maciorowski, 2000 16897 (ON CA), [2000] O.J. No. 3632, 50 O.R. (3d) 595 (Ont. C.A.).

[13] From Longo, there is no hard and fast rule for deciding the issue. Rather, a flexible approach is required, including consideration of such factors as:

i) the insurer has made allegations of clear and uncontested breaches of condition on the part of the insured;

ii) the insured has put forward no material to support a claim for estoppel or relief from forfeiture;

iii) the insurer has involved the statutory mechanism to be added as a thirty party; and

iv) as statutory third party, the insurer has contested both liability of the insured and the amount of the claim in language that is congruent with the interests of the insured and adopted by her almost verbatim in the preparation of her own defence (para. 37).

The list of factors is not exhaustive.

[14] Defendant’s counsel refers to others, namely:

a) the court can consider the issue in advance of trial (said to be Longo, at para. 35); and

b) the court can examine the circumstances of the denial of coverage (Griffen v. Hopey Estate, 1998 14691 (ON SC), 1988 CarswellOnt 2969, 41 O.R. (3d) 216 at para. 17 (Ont. Gen. Div.))

[15] Griffen was decided before and considered in Longo. Timing was also addressed in Longo. I am not persuaded these factors apply.

[16] Although defendants’ counsel made reference to his client’s limited financial resources, no evidence was tendered to support the submission.

[17] As to the Longo factors, I note the following:

a) Ms. Farah does not dispute State Farm’s assertion that Mr. Egal was not authorized by law to drive the vehicle, there being no licensed passenger, a clear breach of the policy;

b) estoppel is not claimed;

c) State Farm is added as a statutory third party;

d) the insurer has filed a statement of defence.

[18] The only dispute between these parties is whether Ms. Farah allowed Mr. Egal to drive alone. The evidence is conflicting. It is also incomplete.

[19] No statement of defence has been filed and, therefore, a summary judgment motion on this dispute cannot proceed.

[20] In any event, this is not an issue whereby a motions judge will be able to have a “full appreciation” necessary to decide summary judgment. Further evidence will only widen the dispute. Credibility is clearly a significant factor that would limit the ability to decide the issue on a written record.

[21] Accordingly, I conclude the motion cannot succeed. It is dismissed.

[22] I anticipate counsel can resolve the issue of costs, failing which brief written submissions are to be delivered to my chambers in Cayuga within 30 days of the release of this decision.

D.J. Gordon J.

Released: February 22, 2013