COURT FILE NO.: CV-10-150-00
DATE: 2013Feb28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NOEL KELLY
Plaintiff
– and –
TRAVIS HORN and MARKEL INSURANCE
Defendant
Edward V. Bergeron and P. Srikanthan, for the Plaintiff
T. Kirk Boyd, for the Defendant/Moving Party, Travis Horn
S. Drisdelle, for the Defendant, Markel Insurance
HEARD: January 29, 2013 at Kingston
TAUSENDFREUND j.
REASONS FOR DECISION
ON MOTION FOR LEAVE TO APPEAL
OVERVIEW
[1] The Defendant Travis Horn (“Horn”) moves for Leave to Appeal to the Divisional Court under Section 19(1)(b) of the Courts of Justice Act from the decision of Justice Tranmer of July 19, 2012, dismissing the motion by Horn for summary judgment to dismiss the claim against him by the Plaintiff Noel Kelly (“Kelly”) for damages for personal injuries.
[2] As the effect of Justice Tranmer’s decision was to permit the action to proceed, Section 19(1)(b) of the Courts of Justice Act provides that an appeal lies to the Divisional Court from an interlocutory order of a judge of the Superior Court of Justice, with leave as provided in the Rules of Civil Procedure.
[3] R. 62.02 (4) provides:
Grounds on Which Leave May Be Granted
62.02 (4) Leave to appeal shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
BACKGROUND
[4] On March 27, 2008, Kelly and Horn were involved in a motor vehicle accident (“MVA”) in Alberta. Kelly suffered property damage and personal injury.
[5] On March 23, 2010, the insurer for Kelly brought a subrogated claim in the Province of Alberta against Horn for property damage which that insurer had previously paid as arising from this MVA. Although the action had been brought in the name of Kelly and at the instance of his insurer, Kelly had no knowledge that such an action had been commenced in his name by his insurer. On April 5, 2011, Kelly’s insurer in that Alberta action obtained a Consent Judgment against Horn for $163,411.93. Kelly’s insurer had paid this amount to Kelly for his property damage as a result of this MVA.
[6] On March 16, 2010, Kelly brought an action against Horn in the Ontario Superior Court. Kelly alleged negligence and sought compensation for personal injuries arising from the Alberta MVA.
[7] Horn brought this summary judgment motion to dismiss Kelly’s Ontario claim on the basis of cause of action estoppel which alternatively may be phrased as res judicata.
ANALYSIS
[8] On the motion before Justice Tranmer, counsel agreed that the issue was an appropriate case for summary judgment. Justice Tranmer held that the record gave him a full appreciation of the evidence which allowed him to make dispositive findings. In short, he held that this was an appropriate case for a summary judgment motion. That issue is not before me on this “leave” motion. I will therefore not address it further. In arriving at his decision, Justice Tranmer relied on two cases from the former Ontario County and General Division Court, namely Vaughan v. Scott (1979), 1979 1806 (ON SC), 27 O.R. (2d) 560 and Braithwaite v. Haugh (1978), 1978 1365 (ON SC), 19 O.R. (2d) 288. In both cases, the court was faced with similar facts as in the present case. Although there were slight procedural differences, each of these two cases was based on a motor vehicle accident in which the plaintiff’s insurer had started a subrogated action in the name of the plaintiff to recover property damage that the insurer, in each case, had paid to the respective plaintiff. When each plaintiff then started a second action for damages based on injuries resulting from the MVA, each plaintiff was faced with the hurdle of the first action, namely the extent to which it was a bar to the plaintiff’s right to proceed with the second action.
[9] The court in both of these actions allowed the plaintiffs’ respective claims to proceed. The court in Vaughan v. Scott, supra stated at paragraphs 59 to 62:
59 There is indeed one cause of action arising out of one fault, one tort, one act of negligence wherein there is a breach of duty between the defendant and the actual plaintiff. For the Court to close its eyes and ignore the existence of the contractual or statutory plaintiff would be to do an injustice and deny the realities extant in the litigation.
60 To accept this principle does not in any way deviate from Cahoon v. Franks but merely affirms its spirit. There is one cause of action for the "plaintiff".
61 ...the one cause of action has by statute been split between two potential plaintiffs and the single cause of action is not split to be made the subject-matter of several causes of action but instead the negligence of the defendant has in these circumstances given a right to the statutory or contractual plaintiff as well as the actual plaintiff to bring an action.
62 Accordingly, it would be against the interests of justice to preclude the "actual" plaintiff from pursuing his personal right to have a Court adjudicate on the relief he seeks in law. This is whether or not he has knowledge as to whether the insurer has chosen to take action under separate cover and independent of him.
[10] The court in Braithwaite v. Haugh, supra, in allowing the second action to proceed, stated at para 13:
13 ...there can arise certain exceptional circumstances that would make estoppel rather "odious".
[11] Justice Tranmer also relied on Danyluk v. Ainsworth 2001 SCC 44, [2001] 2 S.C.R. 460. The court stated at para 33:
The rules governing issue estoppel should not be mechanically applied. The underlying purpose is to balance the public interest in the finality of litigation with the public interest in ensuring that justice is done on the facts of a particular case. ... The first step is to determine whether the moving party ... has established the preconditions to the operation of issue estoppel ... If successful, the court must still determine whether, as a matter of discretion, issue estoppel ought to be applied.
[12] Horn states that the principle underlying Justice Tranmer’s decision appears to be that in certain circumstances one cause of action may be asserted in two separate actions. Horn urges that Justice Tranmer’s decision conflicts with a number of cases starting with Cahoon v. Franks, 1967 77 (SCC), [1967] S.C.R. 455 where the Supreme Court held that there is but one cause of action for a single wrongful act. In that decision at p. 5, the Supreme Court agreed with these words of Diplock, L.J. in Fowler v. Lanning [1959] 1 Q.B. 426:
"The factual situation" which gave the plaintiff a cause of action was the negligence of the defendant which caused the plaintiff to suffer damage. The single cause of action cannot be split to be made the subject of several causes of action.
[13] Horn references three further decisions which he states conflict with the conclusion reached by Justice Tranmer.
[14] Fortino v. Rudolph, [1982] O.J. No. 1415 (Ont. Div. Ct.) addressed the issue of whether there are two causes of actions: one by the insurer of the plaintiff for its subrogated claim and one for the loss personal to the plaintiff. The Divisional Court in that case followed Cahoon v. Franks, supra and held that in Canada, there is only “one cause of action in one person for one wrong.” Yet, in dismissing the Plaintiff’s personal claim in light of the earlier claim initiated by the Plaintiff’s insurance carrier in the name of the Plaintiff to recover the money it had paid to the Plaintiff for collision insurance coverage, the court stated at para. 7.
While it might seem that the interests of justice and equity require that the (Plaintiff’s) action be permitted, ... these must be weighed against the interest of our courts in matters being finally determined and the fundamental principle that causes of action merge in judgments.
[15] Trudel v. Seguin, [1998] O.J. No. 5187 was a decision of the then Ontario Court of Justice (General Division). Without notice to the plaintiff, the insurer for the plaintiff had started an action against the defendant and obtained default judgment for its subrogated interest. The plaintiff’s own action against the defendant for damages for personal injuries arising from the same MVA was dismissed on the basis of res judicata. The court stated at p.12:
12 ...I am not certain that Vaughan v. Scott was properly decided. I am of the view that the basic principles set out in Fortino v. Rudolph continue to be the law in Ontario. ...
[16] In Kasteel et al v. Harris et al (1970), 1970 1138 (AB KB), 75 W.W.R. 572 (Alta. S.C.), the Alberta Supreme Court dismissed the plaintiffs’ claim for damages for personal injuries and other damages on the basis of res judicata, as the plaintiffs’ insurer had earlier obtained a consent judgment on its subrogated claim against the defendants.
[17] Horn also relies on the decision of Sharpe J., as he then was, in McCourt Cartage Ltd. v. Fleming Estate (1997), 1997 12297 (ON SC), 35 O.R. (3d) 795, a decision of the then Ontario Court (General Division). Sharpe J. in referring to the decision the court reached in Braithwaite v. Haugh, supra, noted at p.4:
The statement of Smith Co. Ct. J. in Braithwaite v. Haugh ... that the effect of what is now s. 278 (of The Insurance Act) may be to create two causes of action is explicitly tentative and obiter. That conclusion was not required to justify the remedy sought in that case, namely to set aside a default judgment obtained by the insurer to permit the insured to proceed with his claim. ...
[18] Based on my review of these cases, it appears that there are conflicting decisions in Ontario and at least also in Alberta on the question of whether one wrong may generate more than one cause of action. In my view, it is time that this question be definitively addressed at the appeal level of our administration of justice.
[19] Horn is granted leave to appeal the decision of Justice Tranmer of July 19, 2012.
[20] I may be spoken to within 30 days if counsel cannot resolve the question of costs.
The Honourable Mr. Justice W. Tausendfreund
Released: February 28, 2013
COURT FILE NO.: CV-10-150-00
DATE: 2013Feb28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NOEL KELLY
Plaintiff
– and –
TRAVIS HORN and MARKEL INSURANCE
Defendant
REASONS FOR DECISION
ON MOTION FOR LEAVE TO APPEAL
Tausendfreund J.
Released: February 28, 2013