Tomescu et al. v. Sarhan et al.

[Indexed as: Tomescu v. Sarhan]

Ontario Reports

Ontario Superior Court of Justice,

Bielby J.

March 11, 2013

115 O.R. (3d) 396 | 2013 ONSC 1358

Case Summary

Civil procedure — Parties — Adding parties — Plaintiffs bringing action for damages arising out of motor vehicle accident — Plaintiffs moving after expiry of limitation period to add their own insurer as defendant after defendants deposed on examination for discovery that they were uninsured — Plaintiffs adducing some evidence that they exercised due diligence in attempting to discover whether defendants were insured — Insurer not prejudiced by amendment — Motion granted with leave to insurer to plead limitation defence.

The plaintiffs brought an action arising out of a May 2007 motor vehicle accident. The police report did not note an insurer for the defendants. The plaintiffs made a number of attempts to ascertain the identity of the defendants' insurer. When the defendants were examined for discovery in May 2012, they deposed that they were uninsured. The plaintiffs brought a motion to add their own insurer as a defendant. The insurer took the position that the limitation period had expired and that the plaintiffs had failed to exercise due diligence to discover the identity, if any, of the defendants' insurer.

Held, the motion should be granted.

The plaintiffs had adduced some evidence of due diligence, sufficient to require that the issue go over to the trial to determine the issue of when the plaintiffs discovered or ought to have discovered that the defendants were uninsured. Apart from the limitations issue, the insurer would not be prejudiced by being added as a defendant. The insurer was given leave to plead the limitations defence.

Cases referred to

Wakelin v. Gourley, [2006] O.J. No. 1442, 145 A.C.W.S. (3d) 512, 148 A.C.W.S. (3d) 368 (Div. Ct.), affg (2005), 2005 23123 (ON SC), 76 O.R. (3d) 272, [2005] O.J. No. 2746, [2005] O.T.C. 572, 19 C.P.C. (6th) 13, 140 A.C.W.S. (3d) 745 (S.C.J.); Wong v. Adler (2005), 2004 73251 (ON SCDC), 76 O.R. (3d) 237, [2005] O.J. No. 1400, 17 C.P.C. (6th) 65, 28 M.V.R. (5th) 38 (Div. Ct.), affg (2004), 2004 8228 (ON SC), 70 O.R. (3d) 460, [2004] O.J. No. 1575, [2004] O.T.C. 336, 2 C.P.C. (6th) 175, 5 M.V.R. (5th) 142, 130 A.C.W.S. (3d) 703 (S.C.J.)

Statutes referred to

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 5.04(2), 26.01

MOTION by the plaintiffs to add a defendant.

T. Warren, for plaintiffs.

M. Lefave, for proposed defendant State Farm Insurance Co. [page397]

BIELBY J.: —

Introduction

1The plaintiff has before the court a motion to add, as parties to this action, the State Farm Mutual Automobile Insurance Company ("State") and the FLA claimant.

2State is the plaintiffs' own automobile insurer. The FLA claimant, who is referenced in the body of the statement of claim, was, inadvertently, omitted as a plaintiff.

3The defendant opposes the addition of State on the grounds that the limitation period has expired.

Facts

4The action arises from a motor vehicle accident on May 12, 2007. The police report does not note an insurer for the defendants. At some point that spring, the plaintiffs received some information that the defendants may have been insured by the Nordic Insurance Co., which was owned by the ING Insurance Co. ("ING").

5Inquiries were made with ING and on July 20, 2007, the plaintiffs' counsel was advised by ING that the defendants' insurance policy with Nordic had been cancelled on January 28, 2005.

6The statement of claim was issued on March 12, 2009, exactly two years after the accident.

7A copy of the claim was sent to State in May 2009, which suggests there was some uncertainty as to whether the defendants had any insurance coverage.

8The plaintiffs alleged that they had difficulty locating the defendants and had to obtain an order, on December 3, 2010, extending the time for service of the claim. Service on the defendants was completed on December 10, 2010.

9Counsel for the plaintiffs thereafter made efforts to communicate with the defendants and ascertain the identity of their insurer.

10The defendants were requested to send a copy of the claim to their insurer.

11A letter was sent to the defendants in May 2011, inquiring as to the identity of their insurer.

12On at least two other occasions, counsel for the plaintiffs attempted to contact the defendants again for the purpose of identifying their insurer.

13The defendants were examined for discovery on May 23, 2012 and deposed that they, in fact, had no automobile insurance. [page398]

14Counsel for the plaintiffs then communicated with State to advise that a motion would be brought to add State as a defendant and to ascertain if they would consent to being added since its policy with the plaintiffs included uninsured motorist coverage (OPCF 44R coverage endorsement).

15State appointed counsel, and the plaintiffs were advised that State would oppose being added as a party. As a result, on December 13, 2012, the plaintiffs filed this motion.

Position of Parties

16Counsel for State takes the position that pursuant to the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, the limitation period has expired. State argues that counsel for the plaintiffs failed to exercise the necessary due diligence required to discover the identity, if any, of the defendants' insurer. It is submitted on behalf of State that it was not until after December 3, 2010 counsel for the plaintiffs made any attempt to ascertain whether or not the defendants had automobile insurance. State argues that the plaintiffs discovered or ought to have discovered the lack of insurance on the part of the defendants more than two years prior to the filing of this motion.

17Counsel for the plaintiffs argues that due diligence was exercised and that it was not until the discoveries in May 2012 that they discovered or ought to have discovered that the defendants were uninsured. Accordingly, the plaintiffs ought to be allowed to add their own insurer, State, and look to the uninsured driver coverage for compensation.

18Counsel for the plaintiffs argues that where there is an issue as to discoverability, that such issue must be left to the trial judge.

19It is submitted by counsel for the plaintiffs that the threshold with respect to determining if an issue of discoverability exists is a low one.

Analyisis and Law

20Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 allows the amending of pleadings at any stage of an action on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

21The expiry of a limitation period would be such prejudice.

22As to the applicable test, I have had regard to Wong v. Adler (2004), 2004 8228 (ON SC), 70 O.R. (3d) 460, [2004] O.J. No. 1575 (S.C.J.), affd (2005), 2004 73251 (ON SCDC), 76 O.R. (3d) 237, [2005] O.J. No. 1400 (Div. Ct.), and quote, from para. 45, as follows: [page399]

What is the approach a judge or master should take on a motion to add a defendant where the plaintiff wishes to plead that the limitation period has not yet expired because she did not know of, and could not with due diligence have discovered the existence of the defendant? In my view, as it is clearly implied in Zapfe [v. Barnes (2004) 2003 52159 (ON CA), 66 O.R. (3d) 397 (C.A.)], the motions court must examine the evidentiary record before it to determine if there is an issue of fact or of credibility on the discoverability allegation, which is a constituent element of the claim. If the court determines that there is such an issue, the defendant should be added with leave to plead a limitations defence.

23From para. 14 of Wakelin v. Gourley (2005), 2005 23123 (ON SC), 76 O.R. (3d) 272, [2005] O.J. No. 2746 (S.C.J.), a decision of Master Dash, affd [2006] O.J. No. 1442, 145 A.C.W.S. (3d) 512 (Div. Ct.) I quote [at para. 14 (S.C.J.)]:

The question is how much evidence must the plaintiff put in at the pleadings amendment stage to establish that the proposed defendants could not have been identified with due diligence within the limitation period? The short answer is: not very much. As stated by the Court of Appeal in Zapfe: "In most cases one would expect to find, as part of a solicitor's affidavit, a list of attempt made by the solicitor to obtain information to substantiate the assertion that the party was reasonably diligent" and provide "an explanation for why she was unable to determine the facts".

24Counsel for the plaintiff has in his material listed the steps his office took to locate the defendants and determine whether insurance existed. Counsel for the defendants acknowledges there was some due diligence but argues that by July 2007, the plaintiffs ought to have had a suspicion as to a lack of insurance and that certainly that such suspicion must have existed in May 2009, when a copy of the statement of claim was sent to State.

25On the issue of discoverability, I have concluded that the plaintiff has provided sufficient evidence at this stage to satisfy me that the issue should go over to the trial judge to properly determine the issues of due diligence and when the plaintiffs discovered or ought to have discovered of the lack of automobile insurance on the part of the defendants.

26While it can be said that a cautious solicitor may have added State as party defendant by the time the claim was served, I am not of the view that this proposition is a complete answer to the plaintiffs' due diligence argument. Some steps were taken to locate the defendants and determine if they had automobile insurance.

27I must also have regard to rule 5.04(2) of the Rules of Civil Procedure, which states: "At any stage of a proceeding the court may by order add, delete or substitute a party or correct a name of a party incorrectly named, on such terms as are just, [page400] unless prejudice would result that could not be compensated for by cost or an adjournment."

28State will have leave to plead the Limitations Act and apart from that I am not persuaded that State has suffered further prejudice which would persuade me to deny the motion. State was involved from the beginning as it provided accident benefits to the plaintiffs. State was also provided with a copy of the statement of claim in 2009.

29There has been no evidence of actual prejudice other than OHIP only maintains certain records for seven years. I would expect that since State provided accident benefits coverage, it would have information related to the plaintiffs' pre-accident health. Any other suggested prejudice is speculative in nature and of very little value.

30On the issue of adding the FLA claimant as plaintiff, no argument was made by either counsel. I assume therefore there is no issue in that regard.

Order

31I order that the plaintiffs may amend the statement of claim by adding State Farm Mutual Automobile Insurance Co. as a defendant and by adding Dana Tomescu as a plaintiff.

32The statement of claim is to be amended, as per Exhibit M to the affidavit of Bibiana Gomes, sworn December 13, 2012.

33The proposed defendant State Farm Mutual Automobile Insurance Company is granted leave to plead the Limitations Act, 2002.

34If the parties cannot agree on costs, I will accept written submissions of no more than three pages in length, within 21 days.