Trieu v. Harrison; Co-operators Insurance Company et al.,Third Parties

[Indexed as: Trieu v. Harrison]

Ontario Reports

Ontario Superior Court of Justice,

J. Wilson J.

October 28, 2013

118 O.R. (3d) 152 | 2013 ONSC 5738

Case Summary

Insurance — Automobile insurance — Statutory accident benefits — Plaintiff injured by defendant's vehicle as plaintiff was about to enter TTC streetcar — Defendant driving uninsured vehicle at time of accident — Defendant and Motor Vehicle Accident Claims Fund bringing third party claim against TTC and insurer of defendant's other vehicles — Motion by TTC to strike third party claim as disclosing no cause of action dismissed — TTC potentially liable to pay plaintiff's statutory [page153] accident benefits under s. 268(2)(2)(iii) of Insurance Act as pleadings alleged that TTC streetcar was "involved in the incident" — Entitlement to pursue third party claim against TTC not requiring privity of contract between TTC and either plaintiff or defendant — Insurance Act, R.S.O. 1990, c. I.8, s. 268(2)(2)(iii).

The plaintiff was injured by the defendant's uninsured vehicle while the plaintiff was about to enter a TTC streetcar. Co-operators, which insured other vehicles owned by the defendant, denied coverage. The Minister of Finance, on behalf of the defendant and the Motor Vehicle Accident Claims Fund, brought a third party claim against Co-operators and TTC Insurance ("TTCI"). TTCI brought a motion to strike the third party claim against it as disclosing no reasonable cause of action. It denied liability as there was no privity of contract between it and the plaintiff or the defendant, and argued that the court should not provide declaratory relief in the circumstances as any benefit was for the fund, not for the defendant, and the defendant was precluded from seeking declaratory relief as there was no privity of contract.

Held, the motion should be dismissed.

Co-operators might be liable under s. 268(2)(2)(ii) of the Insurance Act if the insurance on the defendant's other vehicles was engaged. If Co-operators was not liable, then TTCI might be liable under s. 268(2)(2)(iii) as the pleadings alleged that the TTC streetcar was "involved in the incident". Allegedly, when the streetcar stopped and opened its doors at the streetcar stop, the streetcar began a continuous interrelated sequence of events culminating in the accident. The defendant failed to stop to allow the plaintiff to get into the streetcar. As the plaintiff was walking on the street toward the streetcar, he was hit in the head by the defendant's van mirror. The pleaded facts potentially supported a finding that the TTC streetcar was "involved in the incident". Entitlement to pursue the third party claim against TTCI did not require privity of contract between TTCI and either the plaintiff or the defendant. The declaratory relief sought by the fund was appropriate in its scope. To require the plaintiff or the defendant to initiate an action after determining liability and damages would create unwanted inefficiencies and multiplicity of proceedings.

Chambo v. Musseau (1993), 1993 8680 (ON CA), 15 O.R. (3d) 305, [1993] O.J. No. 2140, 106 D.L.R. (4th) 757, 65 O.A.C. 291, 19 C.C.L.I. (2d) 66, 49 M.V.R. (2d) 111, 42 A.C.W.S. (3d) 727 (C.A.); Johnson v. Wunderlich (1986), 1986 2618 (ON CA), 57 O.R. (2d) 600, [1986] O.J. No. 1251, 34 D.L.R. (4th) 120, 18 O.A.C. 89, 21 C.C.L.I. 248, [1987] I.L.R. Â1-2155 at 8335, 45 M.V.R. 184, 2 A.C.W.S. (3d) 179 (C.A.), apld

Other cases referred to

ING Insurance Co. of Canada v. Farmers' Mutual Insurance Co. (Lindsay), 2007 20107 (ON SC), [2007] O.J. No. 2150, 50 C.C.L.I. (4th) 136, [2007] I.L.R. I-4604, 157 A.C.W.S. (3d) 1033 (S.C.J.); Mariano v. TTC Insurance Co., 2008 ONFSCDRS 67, [2008] O.F.S.C.D. No. 62, 62 C.C.L.I. (4th) 286 (Evans) (F.S.C.), affg [2006] O.F.S.C.D. No. 150, 2006 CarswellOnt 5837 (Miller) (F.S.C.); Progressive Casualty Insurance Co. v. Saygili (1999), 1999 15092 (ON SC), 46 O.R. (3d) 10, [1999] O.J. No. 3331, 91 A.C.W.S. (3d) 148 (S.C.J.); R. v. Imperial Tobacco Canada Ltd., [2011] 3 S.C.R. 45, [2011] S.C.J. No. 42, 2011 SCC 42, 308 B.C.A.C. 1, 419 N.R. 1, 2011EXP-2380, J.E. 2011-1326, 335 D.L.R. (4th) 513, 21 B.C.L.R. (5th) 215, 25 Admin. L.R. (5th) 1, 86 C.C.L.T. (3d) 1, [2011] 11 W.W.R. 215, 83 C.B.R. (5th) 169, 205 A.C.W.S. (3d) 92; Sanga v. Bettridge (1994), 1994 1358 (ON CA), 17 O.R. (3d) 773, [1994] O.J. No. 657, 113 D.L.R. (4th) 161, 70 O.A.C. 130, 23 C.C.L.I. (2d) 127, 3 M.V.R. (3d) 29, 46 A.C.W.S. (3d) 1150 (C.A.); [page154] Seetal v. Quiroz (2009), 2009 92114 (ON SC), 97 O.R. (3d) 780, [2009] O.J. No. 2394, 75 C.C.L.I. (4th) 113, [2009] I.L.R. I-4858, 86 M.V.R. (5th) 94, 178 A.C.W.S. (3d) 224 (S.C.J.)

Statutes referred to

Insurance Act, R.S.O. 1990, c. I.8, Part VI [as am.], ss. 224 [as am.], 265 [as am.], 268(1), (2)(2)(ii), (iii), 275 [as am.]

Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41 [as am.], s. 7(3)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 21, 21.01(1)(b), 29.01

MOTION to strike a third party claim.

No appearance, either by plaintiff or through counsel.

Stan J. Sokol, for defendant.

Chad Townsend and Tamara Broder, for third parties.

J. WILSON J.: —

The Motion

[1] Toronto Transit Commission Insurance Company Limited ("TTCI") asserts they are not liable to pay the plaintiff's accident benefits. TTCI brings this motion to strike the third party claim against it pursuant to rule 21.01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 as disclosing no sustainable cause of action.

[2] The defendant, Percival Harrison ("Harrison"), injured the plaintiff while he was about to embark into a Toronto Transit Commission ("TTC") streetcar. The streetcar was stopped with its doors open at a TTC stop at the Bathurst Street and Dundas Street intersection. Harrison failed to stop his van and his van's mirror struck the plaintiff in the head. The plaintiff was uninsured.

[3] The Minister of Finance represents Harrison and the Motor Vehicle Accidents Claims Fund (the "fund"). The minister initiated the third party claim against Co-operators Insurance Company ("Co-operators") and TTCI.

[4] Co-operators insured two other vehicles owned by Harrison, but denies coverage for the uninsured van Harrison drove at the time of the accident. Co-operators will be liable for coverage if Harrison was not using the uninsured van for commercial purposes.

[5] The fund asserts that TTCI is liable to pay the plaintiff's claim for accident benefits if Co-operators is not liable and the TTC vehicle was "involved in the incident". Therefore, the fund submits that TCCI is a necessary party in this lawsuit. [page155]

Preliminary Objection

[6] At the opening of this motion, TTCI's counsel brought a motion without notice to strike the affidavit filed on behalf of the fund. The affidavit contains supplementary evidence relating to the policy of the accident benefits regime for uninsured motorists, as well as an outline of some undisputed facts.

[7] I agree with TTCI's counsel that this Rule 21 motion must be determined upon the pleadings alone, or documents referred to in the pleadings. I do not have discretion to admit the proposed supplementary affidavit material. The supplementary material included one undisputed fact relevant to this Rule 21 motion that was excluded from the third party claim: the streetcar was stopped at an intersection with its doors open when the accident occurred. With TTCI's consent, I allowed the fund to amend their third party claim to include this relevant, undisputed fact. I then struck the fund's affidavit.

The Arguments

[8] TTCI denies liability for the following reasons:

There is no privity of contract between TTCI and the plaintiff.

There is no privity of contract between TTCI and Harrison, who is being sued in tort for his negligence.

This court should not provide declaratory relief in the circumstances as any benefit is for the fund, not for Harrison. Also, Harrison is precluded from seeking declaratory relief as there is no privity of contract.

Alternatively, if there is jurisdiction in this court for Harrison to seek declaratory relief, the court should not exercise such discretion in the circumstances of this case. To do so would be a procedural abuse running afoul of the Ontario statutory regime applicable to uninsured automobile statutory accident benefits.

[9] The fund argues the following:

TTCI's potential liability flows not from direct contractual relations between TTCI and the plaintiff or Harrison, but rather from Part VI of the Insurance Act, R.S.O. 1990, c. I.8, including ss. 224 and 268(2)(2)(iii) as interpreted by case law.

A claim for accident benefits against the fund pursuant to the Motor Vehicle Accident Claims Act, R.S.O. 1990, c. M.41 [page156] ("MVAC Act") is a claim of last resort, and only engages once all recourse to other potential insurance policies are exhausted.

The Minister of Finance is mandated to sue all parties with potential liability before making payment. The minister cannot pay out of the fund unless there is judgment brought against "all persons against whom the applicant might reasonably be considered as having a cause of action in respect of the damages in question and prosecuted against every such person to judgment or dismissal": MVAC Act, s. 7(3). TTCI is such a party.

It is the fund's position that, if Co-operators is not liable to pay the statutory accident benefits to the plaintiff flowing from the coverage on Harrison's other insured vehicles, TTCI is liable under Part VI of the Insurance Act. If the TTC streetcar is found to be "involved in the incident", the plaintiff is deemed to be an insured person with respect to TTCI. The fund is responsible for paying statutory accident benefits only if Co-operators and TTCI are found not responsible.

Do the pleadings support a legal cause of action against TTCI?

[10] Many cases have interpreted Rule 21 of the Rules of Civil Procedure. In order to strike a claim, it must be "plain and obvious" that the pleading has no reasonable prospect of success: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, at para. 17.

[11] Bellamy J. provides a comprehensive list of factors to consider in a motion such as this in Progressive Casualty Insurance Co. v. Saygili (1999), 1999 15092 (ON SC), 46 O.R. (3d) 10, [1999] O.J. No. 3331 (S.C.J.), at para. 17:

1. The statement of claim must disclose a cause of action founded in law;

2. The material facts pleaded are to be taken as true unless they are patently ridiculous or incapable of proof;

3. The statement of claim is to be read generously with allowance for inadequacies due to drafting deficiencies;

4. It is irrelevant that the cause of action is novel; indeed, at this stage of the proceedings, the court should not dispose of matters of law that are not fully settled in the jurisprudence;

5. It does not matter whether the defendant has a very strong defence; [page157]

6. It does not matter that the allegations are serious or that the case appears hopeless;

7. The length and complexity of the issues are irrelevant to the issue of whether a cause of action exists;

8. The test which the plaintiff must meet is a very low one;

9. The proposition in question must be "crystal clear", with caution and prudence governing the exercise of the court's discretion; and

10. The moving party must show that it is plain, obvious and beyond doubt that the plaintiff could not succeed.

[12] Rule 29.01 of the Rules of Civil Procedure confirms that the defendant may commence a third party claim against any person who is not a party to the action who should be bound by the determination of an issue arising between the plaintiff and the defendant. There is no requirement to prove contribution or indemnity, as reflected in the pre-1984 rule governing third party claims. The current rule is geared to resolve all actions arising out of the same factual event in one proceeding.

[13] Section 268(1) of the Insurance Act provides the following:

268(1) Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.

[14] Section 268(2)(2) of the Insurance Act outlines the responsibility to pay statutory accident benefits in a priority sequence as follows:

268(2)(2). In respect of non-occupants,

i. the non-occupant has recourse against the insurer of an automobile in respect of which the non-occupant is an insured,

ii. if recovery is unavailable under subparagraph i, the non-occupant has recourse against the insurer of the automobile that struck the non-occupant,

iii. if recovery is unavailable under subparagraph i or ii, the non-occupant has recourse against the insurer of any automobile involved in the incident from which the entitlement to statutory accident benefits arose,

iv. if recovery is unavailable under subparagraph i, ii or iii, the non-occupant has recourse against the Motor Vehicle Accident Claims Fund.

(Emphasis added)

[15] Co-operators may be liable under s. 268(2)(2)(ii) if the insurance on Harrison's other vehicles engages. Determination [page158] of Co-operators' liability will depend on whether Harrison was using the van for commercial purposes at the time of the accident.

[16] If Co-operators is not liable, then TTCI may be liable under s. 268(2)(2)(iii) as the pleadings allege that the TTC streetcar was "involved in the incident".

[17] I note that Co-operators agreed that the TTC streetcar was "involved in the incident" in the arbitration between Co-operators and the fund (not involving TTCI). This was not TTCI's admission and is not binding upon TTCI. It was made by Co-operators in the context of deciding the preliminary question as to whether Co-operators or the fund was obliged to put TTCI on notice of the claim against it.

[18] Neither the Insurance Act nor case law define what is meant by "involved in the incident" under s. 268(2)(2) (iii). However, Perell J. adopts Arbitrator Samis' criteria as to what constitutes "involved in the incident" under s. 275 of the Insurance Act. In ING Insurance Co. of Canada v. Farmers' Mutual Insurance Co. (Lindsay), 2007 20107 (ON SC), at para. 52, Perell J. confirms the following criteria apply to determine whether a party is "involved in the incident":

-- whether there is contact between the vehicles;

-- the physical proximity of the vehicles;

the time interval between the relevant actions of the two vehicles;

the possibility of a causal relationship between the actions of one vehicle and the subsequent actions of another vehicle;

whether it is foreseeable that the actions of one vehicle might directly cause harm or injury to another vehicle and its occupants.

[19] The pleadings allege that the five criteria in ING Insurance have been met. When the streetcar stopped and opened its doors at the Bathurst-Dundas TTC stop, the streetcar began a continuous, interrelated sequence of events culminating in the accident. Harrison failed to stop to allow the plaintiff to embark into the streetcar. As the plaintiff was walking on the street toward the streetcar, he was hit in the head by Harrison's van mirror. The fund alleges that these facts support a finding that the TTC streetcar was "involved in the incident".

[20] Case law confirms that there can be multiple direct causes of an incident. [page159] Mariano v. TTC Insurance Co., [2006] O.F.S.C.D. No. 150, 2006 CarswellOnt 5837 (Arbitrator: Joyce Miller) (F.S.C.), affd 2008 ONFSCDRS 67 confirms that a passenger injured by a third party while exiting a TTC vehicle can claim against TTCI, even though no negligence is claimed against the TTC. The fund relies on Mariano to confirm that a passenger embarking into a TTC vehicle with its doors open injured by an uninsured third party can claim accident benefits against TTCI.

[21] Furthermore, Perell J. confirms that a party need not cause or contribute to the accident in order to be "involved in the incident": Seetal v. Quiroz (2009), 2009 92114 (ON SC), 97 O.R. (3d) 780 (S.C.J.).

[22] I do not agree with TCCI's submission that the TTC streetcar was not "involved in the incident", considering the meaning of the statutory section, the plain meaning of the words and case law.

[23] I conclude that TTCI is potentially liable to pay the plaintiff's accident benefits under s. 268(2)(2)(iii) of the Insurance Act. Section 268(2)(2)(iii) may deem the plaintiff to be an insured person if the TTC vehicle was involved in the incident.

[24] Further, I find that there is no merit to TTCI's arguments that entitlement to pursue the third party claim against TTCI requires privity of contract between TTCI and either the plaintiff or Harrison. TTCI's potential liability flows not from direct contractual relations, but from Part VI of the Insurance Act including ss. 224 and 268(2)(2).

[25] Claiming accident benefits and damages against the fund pursuant to the MVAC Act is a claim of last resort, and only engages once all other recourse to other potential insurance policies is exhausted. The Minister of Finance is mandated to sue all parties with potential liability before making payment in accordance with s. 7(3) of the MVAC Act.

[26] Therefore, I conclude that TTCI is properly a third party in this proceeding.

Does the fund seek appropriate declaratory relief?

[27] The TTCI challenges the appropriate scope of the declaratory relief sought by the fund. Counsel acknowledged that this argument was weak. Both counsel rely on Sanga v. Bettridge (1994), 1994 1358 (ON CA), 17 O.R. (3d) 773 (C.A.).

[28] I adopt the approach of Morden J.A. in Johnson v. Wunderlich (1986), 1986 2618 (ON CA), where he confirms that the scope of declaratory relief joining the third party in the proceeding makes practical sense and avoids multiplicity of proceedings. I also rely on Osborne J.A.'s comments in Chambo v. Musseau (1993), 1993 8680 (ON CA).

[29] In my view, the fund seeks declaratory relief that, although using different language, does not go beyond the declaratory relief sought in Wunderlich, and is appropriate in scope. The third parties are necessary to adjudicate the matters before the court. To require the plaintiff or the defendant to initiate an action after determining liability and damages would create unwanted inefficiencies and multiplicity of proceedings.

[30] In any event, it is not appropriate at this stage of the proceeding to limit or define the scope of appropriate declaratory relief available.

Disposition

[31] It remains to be seen who is responsible for paying the accident benefits and any damages within the statutory limit. Clearly, TTCI is a proper and necessary party to decide this issue.

[32] For these reasons, the motion to strike the pleadings is dismissed.

Costs

[33] Counsel agreed at the conclusion of the arguments that the unsuccessful party should pay the successful party costs of this motion fixed in the amount of $8,000 inclusive of HST and disbursements. TCCI is therefore required to pay this amount to the Minister of Finance forthwith.

Motion dismissed.

End of Document