Chan v. Abdo, 2013 ONSC 3017

COURT FILE NO.: 55854

DATE: 2013/05/27

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Flora Chan and Emil Chan (Plaintiffs)

• and -

Zienb Husni Abdo and Husni Abdo (Defendants)

BEFORE: Justice H. A. Rady

COUNSEL: Lucy Lee, for the Plaintiffs

Michelle Packer, for the Defendants

HEARD: January 25, 2013

ENDORSEMENT

Introduction

[1] The defendants move for summary judgment dismissing the plaintiffs’ claim on the basis that it is statute barred.

[2] The plaintiffs submit that discoverability applies and extends the limitation period.

[3] An earlier motion for summary judgment was dismissed by Carey J. His rationale was that the case was then on the eve of trial and the issue could be determined then. However, the trial was adjourned at the plaintiffs’ request and the defendants were permitted to renew the motion as a term of the adjournment.

[4] A preliminary issue arose with respect to whether the defendants could bring the motion given Rule 48. Ms. Lee wisely and properly withdrew that objection given the recent decision in Fruitland Juices Inc. v. Custom Farm Service Inc. (2012), 2012 ONSC 4902, 112 O.R. (3d) 453 (S.C.J.).

[5] The issue on this motion is how the concept of discoverability applies when a plaintiff is aware of the applicable two year limitation period prior to its expiry.

The Facts

[6] The plaintiff, Flora Chan, was involved in a rear-end collision on September 27, 2005. No action was commenced following this accident.

[7] She was involved in a second rear-end collision on October 19, 2005, which is the subject of this action. Approximately one month later, the plaintiff was contacted by the defendants’ insurer. She communicated with the insurer in three letters dated April 21, 2006, September 12, 2006 and February 1, 2007. She advised that she was in contact with a lawyer, she provided some information about having sustained injuries in the second accident and that they affected her mentally and psychologically.

[8] At her examination for discovery, Ms. Chan testified that she contacted four law firms before retaining Karl Arvai Professional Corporation in October 2007. On October 5, 2007 and prior to the expiry of the two-year limitation period, Ms. Chan met with Mr. Arvai. There was a discussion during that meeting about the impending limitation period, to which I will return below.

[9] A notice of action was delivered on October 26, 2007 for losses allegedly sustained in the October 29, 2005 motor vehicle accident. A statement of claim followed on November 7, 2007. Paragraph 16 of the claim pleads that “the said plaintiff states that the permanent and serious nature of her impairments and their consequences was [sic] not discoverable before the two-year period preceding the commencement of this action.”

[10] In due course, the defendants delivered their statement of defence. They pleaded the relevant limitation periods and denied that the concept of discoverability applied. The defendants also pleaded the following:

15. Additionally, or in the alternative, the Defendants state that the injuries complained of by the Plaintiff do not constitute a permanent or serious impairment of an important physical, mental or psychological function, nor do they constitute a permanent or serious disfigurement and as a result, the Plaintiff is not entitled to claim damages pursuant to Section 267.5 of the Insurance Act, R.S.O. 1990, c.1.8, as amended.

[11] Examinations for discovery were conducted on September 5, 2008. On July 12, 2010, the trial record was served by the defendants. On October 12, 2010 (just before the scheduled assignment court) the plaintiffs delivered a notice of intention to act in person. The plaintiffs represented themselves for approximately two years, during which the trial was twice adjourned to permit them to marshall the medical evidence necessary to present the case, which is to be heard with a jury. More recently, the plaintiffs retained Ms. Lee to represent their interests. The case is now scheduled for trial in April 2014.

The Evidence

[12] Ms. Chan testified at her examination for discovery that she felt that she had suffered injuries the day of the accident. Her evidence on this issue is reproduced here:

370Q: Okay, after the accident were you sore?

A: I could not move. And I even start, you know, from the first day. I think I noticed that I could not move in the evening.

371Q: Okay. Did you go in to a clinic at that time?

A: No, I think a few days later I went to see my family doctor, Dr. Ho.

372Q: At what time did you think you had some serious injuries as a result of this accident?

A: At what time?

373Q: Yes. Like, a couple of day after the accident when you went and saw your doctor? Or right after the accident?

A: I can only say, you know, I start have concern even starting from day one because I couldn’t move. I think that is what I have told my insurance company.

374Q: So “start having concerns from day one” being the day of the accident?

A: Yeah.

375Q: What concerns did you have?

A: The first symptom was I could not move. Okay, I feel tightness on the upper part of my body. Okay. Severe tightness. And then also I noticed that I felt extreme tiredness on both of my hand, my arm.

376Q: Extreme tiredness on your arms and your ...

A: Both of my arm.

377Q: Were tired?

A: And my hand.

378Q: Okay. What do you mean?

Mr. Steiner: And just so you know you’re describing some symptoms that you had but her original question to you was, when did you first appreciate that you had a serious or a chronic injury?

A: In the evening. I have told you ... so your question was?

379Q: When did you think you had a serious injury from the accident? When did you start feeling that this was a big concern?

Mr. Steiner: I’m not sure I understand the question.

380Q: No, fair enough. You said that you went home that night and you had concerns. I’m just trying to get what the concerns were. Did you think that you had some serious injuries from that accident?

Mr. Steiner: What do you mean by serious? Do you mean permanent injuries or ...

381Q: Permanent injuries. You’re not sure. Like, I mean you had questions...you were concerned about your body.

A: Okay, okay. I can only tell you ... okay, what was on my mind at that time. Okay, yeah. At the beginning, okay. Just like what I have told you just now. Even start from day one, okay I notice that I could not move in the evening. I feel extreme tightness, okay, on my ... like, my especially, on the upper part of my body.

[13] Ms. Chan also testified that prior to Mr. Arvai’s retainer, she consulted Maia Bent of Lerners after the accident. Ms. Bent told her about the two year limitation period. Ms. Chan’s evidence on this issue is as follows:

Mr. Steiner: Let’s just wait for what the specific questions are.

525Q: So the first time you actually had an appointment with a lawyer’s office was in October of 07?

Mr. Steiner: Or in other words...

A: No.

Mr. Steiner: ...when was the first time you had an appointment with a lawyer’s office?

A: No, actually before that, you know, I have you know, talked to couple lawyer. But you have to let me finish okay, my conversation first.

526Q: How about...no, no, no. How about I just ask this: when was the first time you talked to a lawyer?

A: When was the first time? Actually, the first time was actually at the beginning of the car accident. But at that time, to be honest with you...

527Q: Who did you speak with to at the beginning of the car accident?

A: Who?

528Q: Yes.

A: Is who? Yeah, is lawyer from the Lerner.

529Q: Lawyer from Lerner’s. So you contacted Lerner’s after the accident?

A: Yeah.

530Q: How many days after? A couple of days?

A: Maybe a few days after the car accident.

Mr. Steiner: Do you know when? It’s important, if you know or if you don’t know. It if you don’t know, say you don’t remember

A: I think it’s within couple weeks, I would like to say.

531Q: Okay. Do you remember who you spoke to there or was it just a clerk?

A: At first it just a general, you know, inquiry. And to be honest with you, at that point you know, I have had no intention of filing a lawsuit. I only want to ask, you know, some general question about my legal right. So basically like we so focus on my insurance company. What kind of benefit, you know I can get from my own insurance company. However, I remember she told me I have two years of limitation if I want to file a lawsuit.

532Q: And that was coming from Lerners?

A: Yeah.

[14] On May 16, 2006, Ms. Bent wrote to Ms. Chan confirming that she had not been retained but she did set out information respecting Ms. Chan’s rights under Bill 198 and the relevant limitation period. She noted the following:

We would also point out that there is a two year limitation period with respect to issuing a Statement of Claim in regard to both motor vehicle accidents. If you fail to file a claim for each accident you must know that there is only the two year limitation period and your rights may be forever taken away if you do not file your claim on time. Please be advised that the limitation period for the first accident is September 27, 2007 and the limitation period for the second accident is October 19, 2007. If you decide not to proceed with a claim and if subsequently it turns out your injuries would meet the threshold you will not be able to bring any claim after September 27, 2007 for the first accident and after October 19, 2007 for the second accident [emphasis original.]

[15] Ms. Chan subsequently arranged to see Mr. Arvai on October 5, 2007 and his firm was retained. A formal retainer agreement was signed some months later.

[16] Prior to October 19, 2007, Ms. Chan reminded Mr. Arvai of the pending limitation period. On November 13, 2011, while representing herself, she forwarded to the defendants’ solicitors an email that she had written to Mr. Arvai. It stated:

Like what I said before, this TIME LIMITATION issue was a shock for me. I did not know that until pre-trial. I also remember clearly that I did remind Karl about the expiration. (I have mentioned to Chris in my earlier email). I said that because when I remind Karl to be hurry, he asked me not to worry, I therefore always think that he has some ways like extension to issue a claim.

[17] On November 21, 2011, an associate in Mr. Arvai’s office, Mr. Medcalf, swore an affidavit in response to the earlier motion for summary judgment. He deposed, among other things, that “due to the inadvertence of this office, the action was commenced seven days after the two-year anniversary of the motor vehicle accident.”

Medical Evidence

[18] It appears that Ms. Chan did not receive medical treatment following the motor vehicle accident until she saw her family doctor, Dr. Doris Ho, on October 25, 2005, six days after the collision. In responding to the first motion for summary judgment, Mr. Medcalf deposed that there was no diagnosis of a serious and permanent impairment during the first seven days following the accident. He also deposed that Ms. Chan was referred for physiotherapy and reports generated as a result dated November 1, 2005 and December 7, 2005 did not disclose that Ms. Chan had sustained a permanent and serious impairment.

[19] Ms. Chan also began psychological treatment with Dr. Robert Schnurr. His report of February 15, 2006 was attached to Mr. Medcalf’s affidavit. Dr. Schnurr diagnosed a pain disorder with an adjustment reaction with depressed and anxious mood. Mr. Medcalf swore that at the time, Dr. Schnurr had not diagnosed a serious and permanent psychological impairment arising from Ms. Chan’s injuries.

[20] In response to this most recent motion, an affidavit from Dr. Ho was provided. She attached her clinical notes and records that record that when she saw Ms. Chan on October 25^th, 2005, she diagnosed right-sided pain and paraesthesis, decreased neck range of motion, a tender trapezius and post-traumatic stress disorder. She referred Ms. Chan for physiotherapy and to a psychologist.

[21] Ms. Chan swore an affidavit, as well, deposing that it was not until May 2006 that she began to suspect that she might be seriously and permanently injured and that she should hire a lawyer.

The Parties’ Positions

[22] The defendants make the following submissions:

1. Ms. Chan was aware immediately after the accident that she had serious injuries;

2. she was aware of the two year limitation period before it expired;

3. Mr. Medcalf’s affidavit contains an admission that it was through solicitor’s inadvertence that the claim was not issued in time; and

4. there is therefore no genuine issue for trial.

[23] The plaintiffs’ submissions may be summarized as follows:

1. Ms. Chan was not aware until more than seven days after the accident that her injuries were serious and permanent, could meet the threshold and attract damages in excess of the statutory deductible; and therefore, the claim is not statute barred;

2. the fact that she knew of a two year limitation period does not oust the applicability of discoverability; and

3. there is a genuine issue for trial.

The Law

[24] The Court of Appeal had occasion to interpret Rule 20 following the 2010 amendments to the Rules of Civil Procedure. In Combined Air Mechanical Services Inc. v. Flesch 2011 ONCA 764, the court said that the full appreciation test must be applied. The question is whether the full appreciation of the evidence and issues that are necessary to make dispositive findings can be achieved on motion or whether the machinery of a trial is necessary.

[25] Other case law decided before the amendments remain good law. The moving party bears the onus to demonstrate that there is no genuine issue for trial and the responding party must “lead trump or risk losing”. The court is entitled to assume it has all the evidence that would be available in the event there was a trial.

[26] The Highway Traffic Act provides that no proceeding shall be brought against a person for the recovery of damages occasioned by a motor vehicle after the expiration from the time when the damages were sustained.

[27] The Limitations Act provides:

Basic limitation period

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. 2002, c. 24, Sched. B, s. 4.

Discovery

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). 2002, c. 24, Sched. B, s. 5 (1).

Presumption

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. 2002, c. 24, Sched. B, s. 5 (2).

[28] There are three rationales for limitation periods as expressed in Peixeiro v. Haberman, 1997 325 (SCC), [1997] 3 S.C.R. 549:

Statutes of limitations have long been said to be statutes of repose... The reasoning is straightforward enough. There comes a time, it is said, when a potential defendant should be secure in his reasonable expectation that he will not be held to account for ancient obligations.

The second rationale is evidentiary and concerns the desire to foreclose claims based on stale evidence. Once the limitation period has lapsed the potential defendant should not longer be concerned about the preservation of evidence relevant to the claim...

Finally, plaintiffs are expected to act diligently and not “sleep on their rights”; statutes of limitation are incentive for the plaintiffs to bring suit in a timely fashion.

[29] The discoverability principle, now codified in the Limitations Act is designed to avoid the obvious injustice of precluding an action before the person has enough information to know s/he has a cause of action: Peixeiro, supra.

[30] There is authority for the proposition that the exact extent of the plaintiff’s loss need not be known for the cause of action to accrue: Peixeiro, supra. On the other hand, there is a substantial body of case law that establishes that the effect of the discoverability rule is to extend the commencement of the limitation period until a plaintiff believes his injuries meet the “threshold” – namely a permanent and serious impairment of an important physical, mental or psychological function or a permanent and serious disfigurement; or that those injuries will attract compensation in excess of the statutory deductible.

[31] For example, in Simonelli v. Halifax Insurance Co., (2002), 2002 79663 (ON SC), 38 C.C.L.I. (3d) 154 (Ont. S.C.J.) the court reasoned:

[T]here is no cause of action until the injury meets the statutory exception to liability immunity in s. 266(1) of the Insurance Act. The discoverability principle applies to avoid the injustice of precluding an action before the person is able to sue. The time limit does not begin to run until it is reasonably discoverable that the injury meets the threshold of s. 266(1).

...[N]o one can seriously argue that the decision whether a particular injury meets the statutory criteria is an easy one or, perhaps more important, that it will be easy to predict the outcome of a motion to dismiss a claim which the defendant asserts is unworthy...When one is seeking to apply the discoverability rule to the plaintiff in a case such as this, it behooves the court to grant a degree of latitude to the plaintiff before declaring that the limitation period has begun to run...

In practical terms, the question is not whether the plaintiff believes that the injury meets the criteria but whether there is a sufficient body of evidence available to be placed before a judge that, in counsel’s opinion, has a reasonable chance or persuading a judge on the balance of probabilities that the injury qualifies. When such a body of material has been accumulated, then and only then should the limitation period begin to run...[emphasis mine].

[32] This decision is consistent with an earlier decision in Ioannidis v. Hawkins (1998), 1998 14822 (ON SC), 39 O.R. (3d) 427 (S.C.J.).

[33] In Trabulsey v. Saini, 2005 (Ont. S.C.J.) the court observed that the threshold assessment requires evidence of the nature, duration and severity of the injury and its effect on the plaintiff. The court noted that:

The circumstances within two years after the accident may not meet the “threshold” but the circumstances three or four years afterwards may meet it. The effect of the discoverability rule is to extend the commencement of the limitation period to the date the plaintiff decides his injuries meet the “threshold”, even if it is a material period of time beyond the two year limitation period in the HTA.

[34] In Everding v. Skrijel (2010), 2010 ONCA 437, 100 O.R. (3d) 641 (C.A.) the court dealt with the interplay between discoverability and the statutory deductible. The court wrote:

Clearly, it is not the policy of the law or the intent of the limitations provisions to require people to commence actions before they know that they have a substantial chance to succeed in recovering a judgment for damages...

The rationale underlying the discoverability principle is that the law ought not to preclude an action before a person is able to sue on it. In my view, this rationale requires me to take into account the effect of the $10,000 [now $30,000] requirement. It would be fundamentally unfair to require the plaintiff to bring an action in which he could not expect to recover anything because his claim could not surpass the $10,000 exemption.

Analysis

[35] Having considered the case law, I have concluded that there is a genuine issue for trial on the issue of discoverability.

[36] The uncontroverted evidence is that Ms. Chan did not seek medical attention until six days after the accident. At that time, her family physician did not suspect a serious and permanent injury or that her patient might not recover. The fact that Ms. Chan was concerned about her injuries immediately after the accident (as her examination for discovery evidence might be interpreted) is not sufficient to start the limitation period running. There was simply not a sufficient body of credible evidence to establish that her injuries met the threshold at that time.

[37] Mr. Medcalf’s affidavit suggesting solicitor’s inadvertence is not determinative. In fairness, he also addressed the issue of discoverability and that evidence that Ms. Chan had suffered sufficiently significant injuries was not available until after more than seven days following the accident.

[38] Ms. Chan’s email to defendant’s counsel in which she records that Mr. Arvai told her not to worry about the limitation period supports the inference that Mr. Arvai may have considered that discoverability was at play.

[39] In the result, the motion is dismissed. I will receive written submissions on costs from the plaintiffs within ten days and from the defendants within seven days thereafter.

“Justice H. A. Rady”

Justice H. A. Rady

Date: May 27, 2013