CITATION: Patterson v. Ontario (Transportation), 2013 ONSC 6666
COURT FILE NO: CV-05-3364
DATE: 20131203
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Court file no: CV-05-3383
William Patterson and Taylor Patterson, by their litigation guardian, Tracy Patterson and Tracy Patterson, in her personal capacity
Plaintiffs
– and –
Her Majesty the Queen in right of the Province of Ontario, represented by The Minister of Transportation for the Province of Ontario, R.M. Belanger Limited, Daniel Louis Gagnon, Lise St. Denis, Daimler Chrysler Services Canada Inc., Daimler Chrysler Financial Services Canada Inc., and Liberty International Canada
Defendants
William Scott, for the Plaintiffs
Heather Gray, for the Defendants Daimler Chrysler Services Canada Inc. and Daimler Chrysler Financial Services Canada Inc.
James D. Wilson, for the Defendant Lise St. Denis
Gary Marcuccio, for the Defendant Daniel Louis Gagnon
AND BETWEEN:
Court file no: CV-05-3364
Gerald Cantin and Louise Cantin
Plaintiffs
– and –
Her Majesty the Queen in right of the Province of Ontario, represented by The Minister of Transportation for the Province of Ontario, R.M. Belanger Limited, Daniel Louis Gagnon, Lise St. Denis, Tracy Patterson, Executrix of the Estate of Scott Patterson, deceased, Labatt Brewing Company Limited, Daimler Chrysler Services Canada Inc., Daimler Chrysler Financial Services Canada Inc., and Chrysler Financial Services Canada Inc.
Defendants
B.R. Moodie, for the Plaintiffs
Heather Gray, for the Defendants Daimler Chrysler Services Canada Inc. and Daimler Chrysler Financial Services Canada Inc.
J. Duplessis, for the Defendants
Labatt Brewing Company Ltd. and
Tracy Patterson, Executrix of the Estate of Scott Patterson, deceased
James D. Wilson, for the Defendant Lise St. Denis
Gary Marcuccio, for the Defendant Daniel Louis Gagnon
AND BETWEEN:
Court file no: CV-06-3617
Donald Patterson, Donna Patterson, Gregory Patterson and Shawn Patterson
Plaintiffs
– and –
Her Majesty the Queen in right of the Province of Ontario, represented by The Minister of Transportation for the Province of Ontario, R.M. Belanger Limited, Daniel Louis Gagnon, Lise St. Denis, Liberty Mutual Insurance Company c.o.b. as Liberty International Canada, Daimler Chrysler Financial Services CANADA Inc. COB as Daimler Chrysler Truck Financial, Daimler Chrysler Financial Services Canada Inc. and Chrysler Financial Canada Inc.
Defendants
Sean Dewart, for the Plaintiffs
Heather Gray, for the Defendants Daimler Chrysler Services Canada Inc. and Daimler Chrysler Financial Services Canada Inc.
James D. Wilson, for the Defendant Lise St. Denis
Gary Marcuccio, for the Defendant Daniel Louis Gagnon
AND BETWEEN:
Court file no: CV-09-4757
John McClelland and Rayna Bethune
Plaintiffs
– and –
Farquhar Plymouth Chrysler Ltd., Daimler Chrysler Services Canada Inc. and Daimler Chrysler Financial Services Canada Inc. operating as Chrysler Truck Financial
Defendants
J. Bray, for the Plaintiffs
Heather Gray, for the Defendants Daimler Chrysler Services Canada Inc. and Daimler Chrysler Financial Services Canada Inc.
HEARD: SEPTEMBER 5-6, 2013
REASONS FOR DECISION
w. matheson j.
[1] The defendants DaimlerChrysler Services Canada Inc. and Daimler Chrysler Financial Services Canada Inc. (together, DaimlerChrysler) have brought four motions for summary judgment, one in each of four actions arising from the same motor vehicle accident. DaimlerChrysler asks that the actions be dismissed as against it because the plaintiffs failed to commence the actions within the applicable limitation periods.
[2] The motor vehicle accident took place on January 23, 2004. It was a serious, multi-car accident. The allegation is that a vehicle driven by Daniel Louis Gagnon, travelling eastbound on Highway 17 near Sudbury, crossed into westbound traffic and crashed into a vehicle driven by Scott Patterson. Another vehicle, driven by Lise St. Denis, then hit the Patterson vehicle from behind. Scott Patterson was fatally injured and died the next day.
[3] The police accident report listed Mr. Gagnon as both owner and operator of the car he was driving. This was incorrect. A DaimlerChrysler company was the owner. This error is the point of departure for the issues on these motions.
[4] The four motions for summary judgment were argued together, with the few factual differences highlighted where relevant. Two of the motions rely upon a limitation period in the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, while the other two rely on a limitation period in the Trustee Act, R.S.O. 1990, c. T.23. The actions are therefore grouped as follows:
(1) Limitations Act, 2002 actions: the action brought by Mr. Cantin, a passenger in the car driven by Mr. Patterson, and his wife Louise Cantin (Court File No. 3364/05) and the action brought by Mr. McLelland, another passenger, and his wife Rayna Bethune (Court File No. 4757/09) (collectively, the Cantin/McLelland actions); and,
(2) Trustee Act actions: the action brought by Mr. Patterson’s widow and children (Court File No. 3383/05) and the action brought by Mr. Patterson’s parents and brothers (Court File No. 3617/06) (collectively, the Patterson actions).
[5] Lise St. Denis, one of the defendants, supported the position advanced by the plaintiffs. Labatt Brewing Company Ltd., a defendant in the Cantin action, also supported the plaintiffs’ position.
[6] In the Patterson actions, DaimlerChrysler also sought leave of the court to amend its statements of defence to assert the limitations period defence, in keeping with certain prior orders of the court. That relief was not contested, and I grant it now.
[7] At the oustset of the hearing of the summary judgment motions, DaimlerChrysler objected to a late-delivered affidavit of the original plaintiffs’ counsel in the McClelland action. For oral reasons delivered at that time, I denied the plaintiffs in that action leave to file that affidavit.
Events giving rise to claims against DaimlerChrysler
[8] Four actions were commenced within two years of the date of the accident and the death of Mr. Patterson. The Cantin action was commenced on November 18, 2005. The first Patterson action was commenced on December 9, 2005 by Mr. Patterson’s widow and children. The second Patterson action and the original McLelland action were both commenced by notice of action on January 20, 2006, with the statements of claim filed February 15 and 17, 2006, respectively.
[9] In all four actions, plaintiffs’ counsel had obtained the police accident report, dated January 23, 2004. They relied on that report for its ownership information. In each case, the statement of claim alleged that Mr. Gagnon was not only the operator but also the owner of the vehicle he was driving.
[10] Searches called “Plate/VIN By Date” were requested by counsel in one of the four actions − the first Patterson action. This type of search provides ownership information about a motor vehicle as of a specific date, among other things. The office practice for that firm was to request the search. Two replies were received. The first reply, received April 7, 2004, listed Mr. Gagnon only. However, the second reply, received the next day, showed that the vehicle Mr. Gagnon was driving was leased and the lessor was DaimlerChrysler Services Canada Inc. Unfortunately, these search results did not come to the plaintiffs’ lawyer’s attention until the Gagnon examination for discovery.
[11] None of the plaintiffs’ counsel in the other three actions requested Plate/VIN By Date searches in the period between the accident and the examination for discovery of Mr. Gagnon.
[12] Mr. Gagnon defended the actions through his insurer, ING Insurance Company. In 2006, statements of defence were delivered on behalf of Mr. Gagnon in all four actions. Specifically, the defence in Cantin was delivered in March of 2006, the defence in the second Patterson action was delivered in June of 2006, and the defences in the first Patterson action and in McLelland were delivered in August of 2006. In every case, the statements of defence admitted (wrongly) that Mr. Gagnon was the owner of the vehicle that he was driving at the time of the accident.
[13] In January and February of 2007, affidavits of documents and the related documents were produced by Mr. Gagnon. Amongst the productions was a proof of loss document dated March 16, 2004. In the top section of the proof of loss form, Mr. Gagnon’s name appears as the insured and there is a pre-printed statement on the form that the vehicle described in it is “owned by the insured”. In the lower part of the form, purchase information is blank and Chrysler Credit is also mentioned. The proof of loss includes a declaration by both Mr. Gagnon and Chrysler Credit, and is signed by Chrysler Financial Canada. Counsel to the McClelland plaintiffs emphasized this document in support of their belief that Mr. Gagnon was the owner. However, DaimlerChrysler also points to this document as helpful to their position given the references to Chrysler in it. Other Gagnon productions also referred to Chrysler.
[14] As well, the affidavit of documents in the first Patterson action, which was served in January of 2007 and updated in February 2007, listed the documents containing the responses to the above-mentioned Plate/VIN By Date search and was provided to all parties.
[15] There was a common discovery of Mr. Gagnon for all four actions, which took place on November 5, 2007. On discovery Mr. Gagnon indicated that he was not the owner of the vehicle; it was leased from DaimlerChrysler. This is the point at which the error about ownership first came to the plaintiffs’ attention, although even then there was still some question about the proper corporate name of the DaimlerChrysler entity that was the owner. Undertakings were given regarding the correct name of the lessor and related matters.
[16] Among the other steps taken by various counsel after the discovery, on November 8, 2007, plaintiffs’ counsel on the second Patterson action wrote to Gagnon’s counsel, copying all other counsel, noting that the error regarding ownership was identified for the first time at the discovery. He went on to say that “all parties to all the litigation will require an amendment to their respective claims and cross claims to add the lessor as a defendant. In this respect, we would appreciate if you could provide us with the identity and corporate name and address of the lessor so that we may take steps to amend our claim accordingly.”
[17] DaimlerChrysler first received formal notice of the litigation by letter dated November 19, 2007, from plaintiffs’ counsel in the first Patterson action.
[18] On January 25, 2008, plaintiffs’ counsel in the second Patterson action again wrote to Mr. Gagnon’s counsel requesting confirmation of ownership. By reply letter dated February 1, 2008, Mr. Gagnon’s counsel wrote: “I thought that all counsel had been made aware that the Gagnon vehicle was leased through Farquhar Plymouth Chrysler, with Daimler Chrysler remaining as what we understand to be the registered owner. We are not certain at [sic] to the exact corporate name and identity. We provided notice to Farquhar Plymouth Chrysler at [address] and received a reply from [Gowlings]”, which was retained by DaimlerChrysler. Plaintiffs’ counsel went on to suggest that counsel contact Gowlings for the correct corporate name.
[19] By letter dated May 26, 2008, Gowlings wrote to plaintiffs` counsel in all four actions confirming that the proper legal name of the DaimlerChrysler company that owned the Gagnon vehicle at the time of the accident was DaimlerChrysler Services Canada Inc. The letter further advised that the name of the company had since been changed to DaimlerChrysler Financial Services Canada Inc.
[20] On July 25, 2008, a second action was commenced by Mr. Patterson’s parents and siblings, now alleging that DaimlerChrysler was the owner of the vehicle driven by Mr. Gagnon. By consent order of Justice Nadeau dated May 3, 2010, the new action was discontinued and DaimlerChrysler was added to the first action without prejudice to its right to bring this motion.
[21] On August 15, 2008, a second action was commenced by the Cantins, now alleging that DaimlerChrysler was the owner of the vehicle driven by Mr. Gagnon. On May 25, 2010, by consent order of Justice Rivard, the new action was discontinued and DaimlerChrysler was added to the first action without prejudice to its right to bring this motion.
[22] On September 10, 2008, a second action was commenced by Mr. Patterson’s widow and children, now alleging that DaimlerChrysler was the owner of the vehicle driven by Mr. Gagnon. On September 29, 2010, by consent order of Justice Rivard, the new action was discontinued and DaimlerChrysler was added to the first action without prejudice to its right to bring this motion.
[23] On October 28, 2009, a second action was commenced by Mr. McClelland and Ms. Bethune, now alleging that DaimlerChrysler was the owner of the vehicle driven by Mr. Gagnon. In this action there was continued correspondence and dialogue between counsel about the proper corporate name of the owner company. Counsel for DaimlerChrysler wrote on this subject again on October 25, 2012, this time indicating that the documents showed “Chrysler Credit Canada Ltd.” as the owner.
[24] Ultimately, a motion was brought by plaintiffs’ counsel in the McClelland action regarding a number of issues, including a request for formal particulars regarding ownership. By decision released February 25, 2013, Justice Wilcox found that there had been a lack of certainty around the identity of the owner, noting the two different answers given in letters from DaimlerChrysler’s counsel, and required a response to the demand for particulars. The response to request for particulars given by DaimlerChrysler confirmed the information in its counsel’s first letter, from May of 2008.
DaimlerChrysler’s knowledge of the accident
[25] On January 28, 2004, only five days after the accident, DaimlerChrysler received a phone call from ING indicating that the vehicle had been in an accident and might be a total loss. DaimlerChrysler was also informed that ING was the insurer for Mr. Gagnon and DaimlerChrysler for this vehicle.
[26] DaimlerChrysler received a proof of loss on February 18, 2004. There were discussions between ING and DaimlerChrysler about the value for the vehicle and in March of 2004, they settled the property damage claim. The final proof of loss provided that ING pay $28,746 in respect of the vehicle. In accordance with DaimlerChrysler’s standard practice, it did no further investigation. It did not investigate the circumstances of the accident or damage to other property or to people.
[27] ING has been involved in the actions since they were originally commenced, defending both Mr. Gagnon and DaimlerChrysler’s interests. As such, DaimlerChrysler has had the benefit of the ING investigation of the matters at issue in all four actions, and will have access to that investigation if it remains a defendant in these cases. However, DaimlerChrysler submits that it has an excess insurer, which has not been involved from the outset.
[28] Apart from any presumed prejudice arising from the passage of a limitation period, discussed below, there is no evidence of any prejudice to DaimlerChrysler.
Issues
[29] These motions are brought under Rule 20 of the Rules of Civil Procedure. The parties resisting these motions ultimately agreed that the issues on the motions were appropriate to be decided on a motion for summary judgment. I agree. While there are a number of issues to be decided, the material facts are before me and are not in dispute.
[30] The claims against DaimlerChrysler were commenced more than two years after the accident and the death of Mr. Patterson. The plaintiffs argued that the actions against DaimlerChrysler should nonetheless be permitted to proceed. Their arguments give rise to the following issues:
(1) whether, by virtue of discoverability, the Cantin/McLelland actions against DaimlerChrysler are not statute-barred under the Limitations Act, 2002;
(2) whether there are “special circumstances” in the Patterson actions that permit those actions to proceed against DaimlerChrysler notwithstanding the limitation period in s. 38(3) of the Trustee Act;
(3) in regard to the claims of the minor children in the first Patterson action, whether the limitation period under s. 38(3) of the Trustee Act began to run prior to the actions commenced against DaimlerChrysler in any event; and,
(4) whether the actions against DaimlerChrysler are also permitted as corrections of a misnomer.
Actions under the Limitations Act, 2002
[31] DaimlerChrysler argued that there is no genuine issue for trial in the Cantin/McClelland actions because those claims were commenced outside the limitation period in the Limitations Act, 2002. Section 4 of that Act sets a two year limitation period from the date the claim is discovered. Section 5 determines when a claim is discovered, as follows:
(1) a claim is discovered on the earlier of,
(a) the day on which the person with a 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 claims 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).
(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.
[32] Here, the only aspect of the claim the plaintiffs did not actually know within the two year period was the correct identity of the owner of the Gagnon vehicle. On the evidence before me I accept that the plaintiffs did not have actual knowledge that DaimlerChrysler was the owner until, at the earliest, the examination for discovery of Mr. Gagnon on November 5, 2007, when it came to the attention of their counsel. Even then there was some uncertainty about the identity of the actual corporate owner. The Cantin/McClelland actions against DaimlerChrysler were commenced within two years of that date.
[33] The issue is therefore whether the Cantin/McClelland plaintiffs ought to have known that DaimlerChrysler was the owner before the November 5, 2007 examination for discovery. DaimlerChrysler submits that subsection 5(2) of the Act places the onus on the plaintiffs to establish that the identity of the owner was not discoverable before then, and that the reasonable person described in subsection 5(1)(b) of the Act would have discovered that DaimlerChrysler was the owner within two years of the accident.
[34] As articulated by the Ontario Court of Appeal in Pepper v. Zellers Inc. (2006), 2006 42355 (ON CA), 83 O.R. (3d) 648, at paras. 16-17, the discoverability principle provides that “a limitation period commences when the plaintiff discovers the underlying material facts or, alternatively, when the plaintiff ought to have discovered those facts by the exercise of reasonable diligence. … This principle… applies both to the discoverability of facts and to the discoverability of the tortfeasor’s identity.”
[35] In the Cantin/McClelland actions the affirmative step taken in the exercise of diligence, in the first instance, was limited to obtaining the police accident report. In the Cantin action, plaintiffs’ counsel also indicated that they relied on the absence of contrary information being raised in communications with ING and the Ministry of Transportation. For the purposes of my decision, I do not place significant weight on this second reason, except as part of an explanation for why the Cantin plaintiffs did not have actual knowledge of the error at an earlier stage.
[36] Plaintiffs’ counsel argued that it was reasonable to rely on a police accident report for its ownership information. It is an official report in the sense that it is prepared by the police and prepared to meet an express statutory duty. Section 199(3) of the Highway Traffic Act, R.S.O. 1990, c. H.8, imposes that duty, as follows:
199(3) A police officer receiving a report of an accident … shall secure from the person making the report, or by other inquiries where necessary, the particulars of the accident, the persons involved, the extent of the personal injuries or property damage, if any, and the other information that may be necessary to complete a written report concerning the accident and shall forward the report to the Registrar [of Motor Vehicles] within ten days of the accident.
[37] The Highway Traffic Act also placed an obligation on Mr. Gagnon to provide information about ownership to the police. Again, there is a statutory duty, not merely the voluntary provision of information:
200 (1) Where an accident occurs on a highway, every person in charge of a vehicle … that is directly or indirectly involved in the accident shall,
(a) remain at or immediately return to the scene of the accident;
(b) render all possible assistance; and
(c) upon request, give in writing to anyone sustaining loss or injury or to any police officer or to any witness …, name and address of the registered owner of the vehicle and the vehicle permit number.
[38] While I assume that Mr. Gagnon was unaware of this specific statutory provision, the point remains the same. Providing information to the police is an important obligation, and the resulting police accident report is an important document. The plaintiffs therefore submit that obtaining and relying on the police accident report was reasonable diligence.
[39] In response, DaimlerChrysler argued that the plaintiffs should not have relied on the police accident report. DaimlerChrysler submitted that plaintiffs’ counsel ought to have done a motor vehicle Plate/VIN By Date search, which is a simple search that would have revealed the correct owner of the vehicle.
[40] There have been a series of cases involving limitation periods and reliance upon incorrect ownership information in police accident reports. Those cases are the following:
(i) Hall v. Clouthier, [1996] O.J. No. 4206 (Gen. Div.), in which Festeryga J. granted an appeal from a Master’s decision to add the correct owner, noting that there was actual prejudice (specifically, the loss of a key document), noting the peril of relying on a police report and holding that he was not prepared to find special circumstances.
(ii) Kostecki v. Goodman, 2003 CarswellOnt 561 (Master), in which Master Polika allowed the correct vehicle owner GMAC Leaseco Ltd. to be added as a defendant about eleven months after the expiry of the two year limitation period, on the basis of special circumstances. He did so even though plaintiffs’ counsel received a letter shortly after the accident with a “re line” describing the person who had been wrongly identified as the owner in the police accident report as a “Leasee” and referring to GMAC Leaseco Ltd.
(iii) Ioannou v. Evans (2008), 2008 117 (ON SC), 50 C.P.C. (6th) 358 (Ont. S.C.J.), in which Perell J. granted an appeal from a Master’s decision to add the correct owner, Honda Canada Finance Inc., as a defendant, noting among other things that, in contrast to the eleven month delay in Kostecki, there was a six year delay after the initial two year period before proceedings were commenced against Honda Canada Finance Inc.
(iv) Toneguzzo v. Corner (2009), 2009 17981 (ON SCDC), 94 O.R. (3d) 795 (Div. Ct.), in which the Divisional Court upheld the decision of the motion judge adding the correct owner LAKES Leasing Corporation as a defendant about four years after the initial two year period, based upon discoverability, and also found that there were special circumstances.
(v) Bremer v. Foisy (2009), 82 C.P.C. (6th) 133 (Ont. Master), in which Master Beaudoin granted a motion to add the correct owner GMAC Leaseco Limited as a defendant about four years after the initial two year period.
(vi) Velasco v. North York Chevrolet Oldsmobile Ltd., 2011 ONCA 522, 106 O.R. (3d) 332, in which the Court of Appeal overturned the decision of the motion judge, who had dismissed the action against the correct owners for failure to meet the limitation period. In this case, the action against the correct owner was commenced about two years after the initial two year period.
[41] DaimlerChrysler also relied on an early decision in Weisler v. Doman, [1952] O.W.N. 632 (H.C.J.), where incorrect ownership information was obtained in a police interview for the purpose of an application for payment out of an unsatisfied judgment fund. However, that case does not arise in the context of limitation periods and statutorily-required accident reports.
[42] In my view, there is no question that today, given this case history, it would not be reasonable diligence under s. 5(1) (b) of the Limitations Act, 2002 for a plaintiff’s counsel to rely on a police accident report for ownership information. Ownership information in police accident reports has now been shown to be wrong on many occasions, creating limitation period problems. And there is a simple and effective alternative route to obtain correct information through a motor vehicle Plate/VIN By Date search.
[43] However, this accident occurred in 2004, and the question of reasonable diligence should be assessed in the timeframe commencing in 2004, before the majority of the cases listed above.
[44] In most of the above cases there was also a formal admission of ownership by the person wrongly sued as owner. Here, Mr. Gagnon also formally, and wrongly, admitted ownership in his four statements of defence. This and other relevant facts are discussed below.
[45] The Ontario Court of Appeal considered the issue of reasonable diligence in Velasco, a case that is factually very similar to these cases. Velasco also arose from a serious multi-car motor vehicle accident. The accident occurred in July of 2005. Plaintiffs’ counsel obtained and relied on the police accident report, which wrongly named the driver as both the owner and operator of the motor vehicle in question. Plaintiffs’ counsel did not do a Plate/VIN By Date search or take other steps to determine ownership. The action was commenced in March 2006 and, based upon the police accident report, the driver was sued as both owner and operator. Royal & Sun Alliance, the driver’s insurer, did not provide the driver with coverage. It added itself as a statutory third party. Royal & Sun Alliance delivered a statement of defence in October 2006 in which it admitted the allegation that driver was also the owner of the motor vehicle. The driver did not defend and was noted in default.
[46] Within the initial two year period, plaintiffs’ counsel in Velasco received two documents that could have caused them to question the identity of the owner:
(1) in July of 2006, they received a report regarding the personal financial worth of the driver (also believed to be the owner), which identified North York Chevrolet Oldsmobile Ltd. as having a registered lien against the driver; and,
(2) in January of 2007, they received a lengthy Crown Brief regarding the related criminal charges that included a Ministry of Transportation search clearly identifying as North York Chevrolet Oldsmobile Ltd. the owner of the vehicle.
[47] Plaintiffs’ counsel did not review these documents until January of 2009, in the course preparing for the examinations for discovery. As a result, an action was commenced against North York Chevrolet Oldsmobile Ltd. in May of 2009, about two years after the expiry of the initial two year period. North York Chevrolet Oldsmobile Ltd. then moved for summary judgment for failure to meet the two year limitation period in the Limitations Act, 2002.
[48] With respect to discoverability, the motion judge in Velasco indicated that plaintiffs’ counsel ought not to have relied solely on the police accident report, however, given the pleadings admission from Royal & Sun Alliance there was still reasonable diligence until the Crown Brief was received. The motion judge emphasized that the driver had not defended the action and there was therefore no binding pleadings admission from him. The motion judge found that counsel ought not to have considered ownership a closed issue, and concluded that when the Crown Brief was received the identity of the true owner was discoverable.
[49] The Court of Appeal disagreed, holding that it was unreasonable to find that ownership was a “live issue” at the time the Crown Brief was received. The Court of Appeal held that plaintiffs’ counsel acted with reasonable diligence in continuing to rely on the police accident report and Royal & Sun Alliance admission “until contrary information actually came to their attention” (at para. 9). The limitations defence therefore failed.
[50] In my view, there are only two relevant differences between Velasco and the Cantin/McClelland actions. First, in Velasco the statement of defence admission was not from the incorrectly named owner. Here, the admission was from the incorrectly named owner, Mr. Gagnon. He admitted ownership in his statements of defence. This is a formal admission with significant consequences under the Rules of Civil Procedure. This difference provides additional support for a finding of reasonable diligence in the Cantin/McClelland actions. Second, in Velasco the Royal & Alliance statement of defence was received within two years after the accident. Here, the statement of defence in the Cantin action was received less than two months after the two year period, and in the McClelland action it was received about seven months after the two year period.
[51] DaimlerChrysler submits that the timing of the statements of defence is the determinative difference between the Cantin/McClelland actions and not only Velasco but most of the other relevant authorities. As a factual matter, only the Bremner case also involved a pleadings admission where the statement of defence was served outside the two year period. DaimlerChrysler contends that Bremner was wrongly decided. In Bremner, Master Beaudoin relied on the Divisional Court decision in Toneguzzo, rather than distinguishing it based upon the different timing of the statement of defence as DaimlerChrysler submits he should have done.
[52] I do not agree that the timing of the statement of defence is determinative. I do not read the Ontario Court of Appeal decision in Velasco as contingent on the fact that the Royal & Sun Alliance statement of defence was received within the two year period. The key timing was that plaintiffs’ counsel had the statement of defence before receiving the Crown Brief. In my view, if it was reasonable diligence in Velasco to rely on the police accident report and, a later stage, receive a confirmatory pleadings admission from a third party, it is reasonable diligence here to rely on the police accident report and receive a later formal, binding, confirmatory admission from the alleged owner himself.
[53] This is not a case where other circumstances arose before the admission in the statements of defence that should have put the plaintiffs on inquiry. Here, the various documents that mentioned Chrysler were not received until the productions stage, long after the formal admission in the Gagnon statements of defence.
[54] The receipt of a statement of defence could put a plaintiff on inquiry, or not, but it seems artificial to suggest that the plaintiffs in any of the above cases were still treating ownership as a live issue prior to receipt of a statement of defence. They were relying on the police accident report. Otherwise, one would have to conclude that the plaintiffs in those cases were entitled to “wait and see” what position the defendants took before making further inquiries, which runs contrary to the principle that waiting for someone to inform you does not satisfy the diligence requirement: Lockett v. Boutin, 2011 ONSC 2098, [2011] O.J. 1530 at para. 36, varied regarding other relief, 2011 ONCA 809, [2011] O.J. No. 5844.
[55] DaimlerChrysler also submits that the court must be satisfied that even with due diligence it would have been highly unlikely if not impossible to obtain the correct ownership information, relying on Wakelin v. Gourley (2005), 2005 23123 (ON SC), 76 O.R. (3d) 272 (Master) and Parent v. Janandee Management Inc. (2009), 82 C.P.C. (6th) 321 (Ont. Master). Neither of these cases are summary judgment motions. In any event, I cannot reconcile this high threshold with the Court of Appeal decision in Velasco. In Velasco it was possible to obtain the correct ownership information through a Plate/VIN By Date search, yet the reasonable diligence obligation was satisfied.
[56] DaimlerChrysler further submits that the McClelland action is in a different position because an affidavit of the plaintiffs’ original counsel was not provided in response to the motion. Two affidavits were delivered from an administrative assistant in the office of the new counsel to the plaintiffs. I agree that ordinarily on a motion like this an affidavit should come from counsel: Pepper v. Zellers Inc. (2006), 2006 42355 (ON CA), 83 O.R. (3d) 648 (C.A.) at para. 21. However, in this case the affidavits that were delivered were sufficient to provide the necessary factual background for the motion and the material facts are not in dispute.
[57] Following Velasco, these plaintiffs have therefore shown reasonable diligence “until contrary information actually came to their attention”, which occurred at the Gagnon examination for discovery. The actions against DaimlerChrysler were commenced within two years of that date. There is therefore no genuine issue for trial regarding the limitation period.
[58] It is open to me to grant summary judgment against DaimlerChrysler with respect to their limitation defence: Whalen v. Hillier (2001), 2001 24070 (ON CA), 53 O.R. (3d) 550 (C.A.) at paras. 3, 13. I do so in the Cantin/McClelland actions.
Actions under the Trustee Act
[59] DaimlerChrysler argues that there is no genuine issue for trial in the Patterson actions because those claims were commenced outside the limitation period in the Trustee Act.
[60] In the Patterson actions, Mr. Patterson’s widow and children, and his parents and siblings, assert derivative claims against DaimlerChrysler under Part V of the Family Law Act. Those claims are subject to a two year limitation period that is provided for in section 38 of the Trustee Act, as follows:
38(1) …[T]he executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property of the deceased in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do, and the damages when recovered shall form part of the personal estate of the deceased; but if death results from such injuries, no damages shall be allowed for the death or for the loss of the expectation of life, but this proviso is not in derogation of any rights conferred by Part V of the Family Law Act.
38(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased. [emphasis added]
[61] The limitation period in s. 38(3) is preserved by s. 19(1) (a) of the Limitations Act, 2002.
[62] This limitation period is not modified by discoverability. It runs from the date of death, regardless of knowledge: Ryan v. Moore 2005 SCC 38, [2005] 2 S.C.R. 53 at para. 31, citing with approval Waschkowski v. Hopkinson Estate (2000), 2000 5646 (ON CA), 47 O.R. (3d) 370 (C.A.) at paras. 8-9.
[63] The derivative Family Law Act claims are in no better position than a claim brought by the estate. Those claims are also subject to the above limitation period, with no relief based upon discoverability: Camarata v. Morgan (2009), 2009 ONCA 38, 94 O.R. (3d) 496 (C.A.) at para. 9.
[64] The claims against DaimlerChrysler by the Patterson plaintiffs were commenced more than two years after Mr. Patterson’s death. However, the plaintiffs argue that the actions against DaimlerChrysler should nonetheless be permitted to proceed under the doctrine of special circumstances.
Special Circumstances
[65] The doctrine of special circumstances is available to permit a claim to proceed despite the expiration of the limitation period in s. 38(3) of the Trustee Act. The doctrine survives the passage of the Limitations Act, 2002: Bikur Cholim Jewish Volunteer Services v. Langston (2009), 2009 ONCA 196, 94 O.R. (3d) 401 at para. 51.
[66] The absence of actual prejudice is a prerequisite to finding special circumstances. Factors related to prejudice, such as the knowledge of the defendant, may also be considered in determining whether there are special circumstances: Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 8620 (ON CA), 56 O.R. (3d) 768 (C.A.) at para. 42; Gregory v. Khudabakhsh (2005), 2005 29494 (ON SC), 77 O.R. (3d) 15 (S.C.J.) at para. 15; Toneguzzo (Div. Ct.) at para. 25; Ioannou (S.C.J.) at paras. 36 - 37.
[67] There is a presumption of prejudice after the passage of a limitations period, however slight, which may be rebutted: Bikur at para. 57; Ioannou at para. 31.
[68] The courts have found it unnecessary and undesirable to define special circumstances with precision. It is a discretionary decision in which the facts of the individual case are the most important consideration. No single factor may be enough to displace the defendant’s entitlement to rely on the limitation period. However, considering all the circumstances, in some cases the interests of justice may be better served by allowing the claim to proceed: Mazzuca at paras. 31-37; Ioannou at para. 34.
[69] On the issue of whether there are special circumstances here, two of the cases arising from incorrect police accident reports are particularly significant: Ioannou and Toneguzzo. Both cases are factually similar to the cases before me, although in both cases there was a longer delay. In Toneguzzo the delay was four years and in Ioannou it was six years, as compared to the delay here of less than three years.
[70] DaimlerChrysler relies upon Ioannou, in which Master Birnbaum’s finding of special circumstances was overturned by Perell J. in the particular circumstances of that case. This decision must be considered in relation to the later decision of the Divisional Court in Toneguzzo, which accepted an approach remarkably similar to that of Master Birnbaum.
[71] Master Birnbaum’s reasons for finding special circumstances in Ioannou were summarized by Perell J. at para. 48:
[T]he special circumstances listed by the Master are: (1) evidence led to the erroneous but not unreasonable conclusion that the named defendant was the owner of the automobile; (2) the insurer was aware of the accident immediately and knew of the seriousness and that there was an injury; (3) the true owner of the automobile has known about the accident since shortly after it happened; and (4) there is an explanation for the error and no evidence of bad faith.
[72] The above circumstances parallel the decision in Toneguzzo, in which the Divisional Court accepted an almost identical basis for special circumstances, at para. 25:
(i) all preliminary evidence led to the erroneous, but not unreasonable, conclusion that [the driver] was the owner of the defendant’s vehicle;
(ii) from the outset, [the insurer] was aware of the accident, and its gravity;
(iii) the actual owner of the defendant’s vehicle also knew about the accident from the beginning; and
(iv) there was a reasonable explanation for the delay.
[73] Indeed, the Divisional Court articulation is somewhat broader than the reasons of the Master in Ioannou. And the Divisional Court found that the above facts “overwhelmingly constitute special circumstances” at para. 25.
[74] While the Divisional Court did not expressly disagree with the decision to overturn Master Birnbaum’s finding of special circumstances in Ioannou, it did so by necessary implication in the context of the facts of Toneguzzo. I note that the length of the delay in Toneguzzo was four years after the initial two year period, not six years as it was in Ioannou. Here, the delay is less than three years.
[75] Applying the above principles to the Patterson actions, I find that there is no prejudice and there are special circumstances.
[76] There is no evidence of actual prejudice. Further, the evidence shows that DaimlerChrysler was notified of the accident within days, and was aware that it was serious. ING, the primary insurer, was also involved from the outset, defending the interests of not only Mr. Gagnon but also DaimlerChrysler. Its investigation is available to DaimlerChrysler.
[77] As occurred in Ioannou, DaimlerChrysler has raised the spectre of prejudice because of an excess insurer. As found by Perell J. in Ioannou, I conclude that the presumption of prejudice has been displaced by the involvement of the primary insurer, and it was for DaimlerChrysler to show more than the possibility of prejudice as a result of the involvement of an excess insurer: Ioannou at para. 46. It has not done so. I am fortified in this view because DaimlerChrysler has admitted on discovery that there are no coverage issues, and has taken under advisement a question about actual damage and not subsequently provided an answer.
[78] The facts regarding special circumstances, as set out in Toneguzzo, apply with equal force here:
(i) all preliminary evidence led to the erroneous, but not unreasonable, conclusion that Mr. Gagnon was the owner of the vehicle he was driving;
(ii) from the outset, ING was aware of the accident, and its gravity;
(iii) DaimlerChrysler also knew about the accident from the beginning and knew it was serious; and,
(iv) there was a reasonable explanation for the delay.
[79] With respect to a reasonable explanation, DaimlerChrysler points to the fact that in the action by Mr. Patterson’s widow and children, Plate/VIN By Date searches were done at an early stage but the search results did not come to the lawyer’s attention. While it would obviously have been preferable if the results had come to the lawyer’s attention, I am not inclined to penalize that group of plaintiffs because their counsel did more than the other counsel, even though it was an incomplete effort. I find that plaintiffs’ counsel have provided a good faith and reasonable explanation for why DaimlerChrysler was not sued earlier.
[80] This is not a case where counsel made a strategic or deliberate decision not to sue the party at an earlier stage. In contrast, DaimlerChrysler was deliberate in its decision to adopt a practice of not investigating accidents despite notice of a property damage claim.
[81] In exercising my discretion, I have considered all of the circumstances of the Patterson actions. I have not, however, taken into account the existence of the Cantin/McClelland actions. Plaintiffs’ counsel submitted that if the Cantin/McClelland actions were proceeding against DaimlerChrysler, the continued participation of DaimlerChrysler in those actions would support a finding of special circumstances in the Patterson actions. I disagree with that approach because it has the effect of importing discoverability into the Trustee Act. I have considered the circumstances in the Patterson actions only in arriving at my finding of special circumstances, and conclude that it is in the interests of justice that those claims be permitted to proceed.
[82] I therefore grant summary judgment against DaimlerChrysler with respect to its limitation defence in the Patterson actions.
Alternative arguments
[83] Given my decision on discoverability and special circumstances, I will not also address the alternative arguments raised by some of the plaintiffs that DaimlerChrysler may also be sued on the basis of a correction of a misnomer, and that the claims of the minor plaintiffs fall within the two year limitation period in any event.
Orders
[84] In the Patterson actions, leave is granted to DaimlerChrysler to amend its statements of defence to allege and rely upon the limitation period in s. 38(3) of the Trustee Act.
[85] In all four actions, the limitation period defences fail and summary judgment on those defences is therefore granted against DaimlerChrysler.
[86] If the parties are unable to agree on costs, plaintiffs’ counsel in each action shall provide any costs submissions by brief written submissions and a bill of costs, to be delivered by January 15, 2014. DaimlerChrysler shall provide any response by brief written submissions to be delivered by February 17, 2014.
W. MATHESON J.
Released: December 3, 2013
CITATION: Patterson v. Ontario (Transportation), 2013 ONSC 6666
COURT FILE NO: CV-05-3364
DATE: 20131203
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Court file no: CV-05-3383
William Patterson and Taylor Patterson, by their litigation guardian, Tracy Patterson and Tracy Patterson, in her personal capacity
Plaintiffs
– and –
Her Majesty the Queen in right of the Province of Ontario, represented by The Minister of Transportation for the Province of Ontario, R.M. Belanger Limited, Daniel Louis Gagnon, Lise St. Denis, Daimler Chrysler Services Canada Inc., Daimler Chrysler Financial Services Canada Inc., and Chrysler Financial Services Canada Inc., and Liberty International Canada
Defendants
And Between:
Court file no: CV-05-3364
Gerald Cantin and Louise Cantin
Plaintiffs
– and –
Her Majesty the Queen in right of the Province of Ontario, represented by The Minister of Transportation for the Province of Ontario, R.M. Belanger Limited, Daniel Louis Gagnon, Lise St. Denis, Tracy Patterson, Executrix of the Estate of Scott Patterson, deceased and Labatt Brewing Company Limited, Daimler Chrysler Services Canada Inc., Daimler Chrysler Financial Services Canada Inc., and Chrysler Financial Services Canada Inc.
Defendants
And Between:
Court file no: CV-06-3617
Donald Patterson, Donna Patterson, Gregory Patterson and Shawn Patterson
Plaintiffs
– and –
Her Majesty the Queen in right of the Province of Ontario, represented by The Minister of Transportation for the Province of Ontario, R.M. Belanger Limited, Daniel Louis Gagnon, Lise St. Denis, and Liberty Mutual Insurance Company c.o.b. as Liberty International Canada, Daimler Chrysler Financial Services Inc., operating as Daimler Chrysler Truck Financial, Daimler Chrysler Financial Services Canada Inc., and Chrysler Financial Canada Inc.
Defendants
And Between:
Court file no: CV-09-4757
John McClelland and Rayna Bethune
Plaintiffs/Respondents
– and –
Farquhar Plymouth Chrysler Ltd., Daimler Chrysler Services Canada Inc. and Daimler Chrysler Financial Services Canada Inc. operating as Daimler Chrysler Truck Financial
Defendants
REASONS FOR DECISION
W. MATHESON J.
Released: December 3, 2013