SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-11-51416
DATE: 2014/02/14
RE: Chen Gu, Kin Choi, and Kelvin Choi by his Litigation Guardian Kin Choi, Plaintiffs
AND
Emily Asmar, Karen Asmar, and Gaby Asmar, Defendants
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Michael Van Dusen, for the Plaintiffs
Michael Raymond Switzer, for the Defendants
HEARD: January 22, 2014
ENDORSEMENT ON SUMMARY JUDGMENT MOTION
Facts
[1] On June 2, 2009, the defendant Emily Asmar lost control of her parents’ Karen and Gaby Asmar’s car and drove through the plaintiffs’ fenced backyard, striking Mrs. Chen Gu and Mr. Kin Choi as they were gardening. Along with the fence, the vehicle also caused damage to the plaintiffs’ deck, lilac tree, outdoor fountain, and to their home, namely the siding, framing, interior finishes, stairwell and gas line.
[2] The plaintiffs immediately contacted their property insurer, Allstate Insurance Company of Canada (“Allstate”). Allstate contacted the defendants’ automobile insurer Personal Insurance Company (“Personal”) the next day. Personal agreed that Allstate could waive the plaintiffs’ deductible on Allstate’s property insurance policy, and asked for repair details. On November 9, 2009, Allstate emailed repair estimates and photographs of the property loss to Personal.
[3] The repairs to the plaintiffs’ property were substantially completed by mid-December 2010. On December 20, 2010, Personal asked for and Allstate agreed to deliver the final subrogation documents once the total repair costs had been tabulated.
[4] For legal context, upon Allstate making payment and assuming liability for the damages, it was subrogated to all rights of recovery of its insureds. Allstate could have brought an action in the name of the plaintiffs against the defendants for those damages, and the plaintiffs themselves had a duty to pursue a property damages claim in good faith. See Insurance Act, R.S.O. 1990, c. I.8, s. 152(1), and Somersall v. Friedman, 2002 SCC 59, [2002] 3 S.C.R. 109 at paras. 54 and 57.
[5] The Allstate claims adjuster did not get back to the file until July 10, 2011. He noted then that the two-year limitation period had passed. The plaintiffs themselves were unaware of their obligation to protect Allstate’s subrogation interests, and no one from Allstate had made contact with the plaintiffs’ personal injury lawyer. However, unbeknownst to Allstate, the plaintiffs’ personal injury lawyer had issued a Statement of Claim on May 24, 2011, within the limitation period. The personal injury claims have settled, without prejudice to a determination of any remaining property claims.
[6] This is Allstate’s motion brought in the name of the plaintiffs for summary judgment to recover the property damages it maintains are already set out in the Statement of Claim. If I find that those claims have not already been made, then it seeks leave to amend to include them.
Statement of Claim
[7] The Statement of Claim makes no specific reference to the damages sustained to the plaintiffs’ property and home. In describing the accident, it simply says that the defendant Emily Asmar “… recklessly drove through their backyard and hit Ms. Gu, and Mr. Choi, causing Ms. Gu to fall unconscious and Mr. Choi to get hit by the Defendant’s motor vehicle, before the vehicle came to rest.” It also says:
- The Plaintiff CHEN GU … claims from the Defendant (sic) as follows: …
(b) Special damages including costs of future care in the amount of $750,000.00;
- The Plaintiff KIN CHOI … claims from the Defendant (sic) as follows: …
(b) Special damages including costs of future care in the amount of $500,000.00[.]
Issues
[8] So the issues on this motion are:
Does the Statement of Claim as drafted include a claim for the property damages? If yes, should summary judgment be granted?
If the Statement of Claim as drafted does not include a claim for property damages, should leave to amend be granted to include that claim? If yes, should summary judgment be granted on the amended Statement of Claim?
In deciding issue 2, are the defendants/Personal precluded from relying on the limitation period based on the doctrine of promissory estoppel?
Does the Statement of Claim Include Property Damages?
Law
[9] Pleadings are covered by Rule 25 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The relevant sub-rules read as follows:
25.06(1) Every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defense, but not the evidence by which those facts are to be proven.
25.06(9) Where a pleading contains a claim for relief, the nature of the relief claimed shall be specified and, where damages are claimed,
(a) the amount claimed for each claimant in respect of each claim shall be stated; and
(b) the amounts and particulars of special damages need only be pleaded to the extent that they are known at the date of the pleading, but notice of any further amounts and particulars shall be delivered forthwith after they become known and, in any event, not less than ten days before trial.
[10] A court cannot decide an issue or cause of action that has not been pleaded: Sutton, Mitchell & Simpson Ltd. v. Kelore Mines Ltd., [1956] O.W.N. 648 (C.A.); Bedford Construction Co. v. Gilbert, [1956] O.W.N. 293, [1956] O.J. No. 42 (C.A.).
Analysis
[11] Rule 25.06(1) requires “material facts” to be stated in the Statement of Claim. As I have already summarized above, there are no material facts stated relating to property damage.
[12] Rule 25.06(9) requires the “nature of the relief claimed” to be specified in the pleading. Again, there is nothing specified regarding property damage in the Statement of Claim.
[13] Rule 25.06(9)(b) says that special damages only need to be pleaded to the extent that they are known at the date of the pleading. The plaintiffs and Allstate knew of the property damage since the date of the accident, and the repairs were substantially completed five months before the Statement of Claim was issued. However, they are not mentioned in that pleading.
[14] Allstate argues, notwithstanding the above, that by simply referring to or using the words “special damages” in a Statement of Claim without more, all possible special damages are properly pleaded including the property damages here. I do not agree. It is contrary to the plain wording of sub-rules 25.06(1) and (9). In Fucella v. Ricker (1982), 1982 1819 (ON SC), 35 O.R. (2d) 423 (H.C.), the court struck a similarly worded pleading with leave to amend, finding that it did not conform to the procedural rules.
[15] I find that the Statement of Claim here does not include a claim for property damages. I cannot grant summary judgment on a claim that has not been pled.
Can the Statement of Claim be Amended to Include Property Damages?
[16] As noted Allstate sought in the alternative to amend the Statement of Claim to include the property damages, and to then obtain summary judgment on the amended claim.
[17] The amendments it seeks are to change paragraphs 1(b) and 2(b) of the existing Statement of Claim (see para. 7 above) so that they read “Special damages including costs of future care and property damages in the amount of …”, and to add the following new heading and paragraph:
Special Damages – Property Damage
32(a). Following the accident, the plaintiffs spent a total of $53,692.89 in order to repair the damage to their fence, backyard, the structure of their home and the contents therein, all of which were caused by the motor vehicle accident and the negligence of the defendants, as hereinbefore described. Full particulars of all the said property losses will be provided to the defendants prior to trial.
Law
[18] Amendment of pleadings is covered by Rule 26 of the Rules of Civil Procedure. Rule 26.01 reads as follows:
On motion at any stage in an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[19] The only prejudice relied on in this case by the defendants is the expiry of the limitation period. Section 4 of the Limitations Act, 2002, S.O. 2002, c.24, Sched. B, reads as follows:
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.
[20] As noted by the Court of Appeal in Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3, at para. 24:
In my view, rule 26.01 does not contemplate the addition of unrelated statute-barred claims by way of amendment to an existing statement of claim. Conceptually, this should be treated no differently than the issuance of a new and separate statement of claim that advances a statute-barred claim.
[21] The parties agreed that discoverability is not an issue in this case. As the claims here, unlike the situation in Frohlick, arose well after the Limitations Act, 2002 came into force, the prescription period cannot be extended by reliance on the common law doctrine of ‘special circumstances’: Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469.
Analysis
[22] Applying the Frohlick test, the question is whether the proposed amendments are truly amendments to an existing claim or whether they are unrelated statute barred claims. Do they assert a new cause of action?
[23] The answer to this question turns on whether all of the material facts giving rise to the cause of action or claim have previously been pleaded: see Ascent Inc. v. Fox 40 International Inc., 2009 CarswellOnt 4118 (Master) at para. 3, and Thompson v. Zeldin, 2008 CarswellOnt 5402 (Master) at para. 74.
[24] I have already found that the Statement of Claim as it stands does not include the facts necessary to support a claim for property damages. As such I find that allowing the amendments requested would be equivalent to allowing a new and separate statute barred Statement of Claim to issue beyond the limitation period. I therefore find that the amendment cannot be granted.
[25] Allstate relied on Cleveland v. Yukish, 1965 238 (ON SC), [1965] 2 O.R. 497 (Co. Ct.) where an amendment was granted after the limitation period expired. However, the property damage claim had been brought in another action before the limitation period expired, and the defendant consented to the amendment. It is clearly distinguishable on its facts.
Waiver/Promissory Estoppel
[26] Allstate asserts that the defendants/Personal are precluded from relying on the two-year limitation period based on the doctrine of promissory estoppel. If I were to find in their favour on this issue then, revisiting the above analysis, there would be no prejudice to the defendants per rule 26.01 and the amendment of the pleadings could follow.
Law
[27] The test is found in Maracle v. Travellers Indemnity Co. of Canada, 1991 58 (SCC), [1991] 2 S.C.R. 50 at para. 13:
The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.
Analysis
[28] The plaintiffs argue that when Personal through its representative indicated to the Allstate adjuster that it could waive its deductible, it was admitting liability. However, as noted further in Maracle in para. 16, an admission of liability is not sufficient on its own to be considered a promise or assurance that meets the first part of the test:
There must be something more for an admission of liability to extend to a limitation period. The principles of promissory estoppel require that the promissor, by words or conduct, intend to affect legal relations. Accordingly, an admission of liability which is to be taken as a promise not to rely on the limitation period must be such that the trier of fact can infer that it was so intended. There must be words or conduct from which it can be inferred that the admission was to apply whether the case was settled or not, and that the only issue between the parties, should litigation ensue, is the issue of quantum. Whether this inference can be drawn is an issue of fact.
[29] Other than the deductible being waived and a request for details of the property claim, no further communication occurred between Allstate’s adjuster and Personal before the prescription period passed. The plaintiffs argue that the words or conduct of Personal after the lapse of the prescriptive period support the inference that Personal had promised not to rely on the limitation period. They note that Personal’s adjuster still sought information from Allstate’s lawyer pertaining to the age of the plaintiffs’ home, and that the defendants’ counsel requested copies of supporting documentation regarding the subrogated property damages claim, both after the limitation period expired.
[30] I cannot accept that these requests for information establish previous intent by Personal not to rely on the limitation period. An associate in Allstate’s lawyer’s firm indicated in his affidavit that “[a]s the matter progressed, I made contact with Mr. Switzer, counsel of record for the defendants, and confirmed that Allstate would be pursuing its subrogated interests through the [existing] Claim.” In the context of the property damages still being pursued, the defendants’ insurer and the defendants’ counsel would need to know the extent of those damages. One could expect them to make inquiries regardless of their position on the limitation period.
[31] I note that the words of Allstate’s own representatives after the expiry of the prescription period are not consistent with the inference that it now wishes me to draw. On the day he discovered the missed limitation period, the Allstate adjuster commented in the company’s ‘internal diary notes’: “TO DO: CHECK IF STILL ABLE TO GET SUBRO AS PRESCRIPTION HAS PASSED.” The file then went internally to Allstate’s subrogation department, and on July 20, 2011 the representative who took over the file summarized it as follows:
REC’D IN SUBRO – TP LOST CONTROL OF VEH & CAME ONTO INS’D PROPERTY CAUSING DMGS IN THE AMOUNT OF $53,645.26 & ALSO HIT MRS. INS’D WHO WAS IN THE YARD – POTENTIAL FOR RECOVERY NOT VERY GOOD AT PRESENT AS WE HAVE PASSED THE STATUTE OF LIMITATIONS WHICH WAS JUNE 2/11 NOTES ON FILE INDICATE THAT TP ADJ AT AN03 HAD BEEN CONTACTED & THAT SUBRO DOCUMENTS FOR THE DAMAGE TO THE HOUSE HAS BEEN SENT TO TP ADJ AS REQUESTED & TP ADJ HAD ACCEPTED LIAB. & ADVISED THAT WE COULD WAIVE OUR INS’D DED – CALLED TP ADJ & LMTCB REGARDING STATUS – WE WILL AWAIT HIS RESPONSE & TRY TO NEGOTIATE SOME TYPE OF SETTLEMENT IF POSSIBLE BUT DOES NOT APPEAR THAT WE HAD MADE AN AGREEMENT WITH TP ADJ TO WAIVE STATUTE OF LIMITATIONS OR EXTEND THE PERIOD.
[32] Despite what it is arguing on this motion, Allstate itself did not believe that Personal had waived the limitation period.
[33] Given the above, I find that Allstate has not established that it received a promise or assurance that satisfies the first part of the test.
[34] Even if I am wrong, I also find that the second part of the test – that there has been reliance on a promise or assurance – has not been met. The evidence was that Allstate’s adjuster simply forgot about the file. When he got back to it he immediately realized that there was a limitations problem. Personal’s waiving the deductible or admitting liability did not lead Allstate to miss the limitation period.
[35] I conclude that the plaintiffs have not established promissory estoppel in this case.
Decision
[36] This motion by Allstate for summary judgment is dismissed. If the parties cannot agree on costs, they can provide brief written submissions within thirty days.
Mr. Justice Timothy Minnema
Date: February 14, 2014
COURT FILE NO.: CV-11-51416
DATE: 2014/02/14
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Chen Gu, Kin Choi, and Kelvin Choi by his Litigation Guardian Kin Choi, Plaintiffs
AND
Emily Asmar, Karen Asmar, and Gaby Asmar, Defendants
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Michael Van Dusen, for the Plaintiffs
Michael Raymond Switzer, for the Defendants
ENDORSEMENT ON SUMMARY JUDGMENT MOTION
Mr. Justice Timothy Minnema
Released: February 14, 2014