SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-14-517814

DATE: 20150714

RE: MARIO ZEITOUN, ABLA ZEITOUN, SAMMY ZEITOUN, SAMER ZEITOUN and HANNAN ZEITOUN, Plaintiffs

AND:

PRUDENTIAL ASSURANCE COMPANY LIMITED, GENERAL ACCIDENT INDEMNITY COMPANY, TD HOME AND AUTO INSURANCE COMPANY and LONDON LIFE INSURANCE COMPANY, Defendants

BEFORE: K. HOOD J.

COUNSEL:
Kevin D. Sherkin and Mitchell Wine, for the Plaintiffs

Howard Borlack and Matthew Malcolm, for the Defendant TD Home and Auto Insurance Company

HEARD: June 15, 2015

ENDORSEMENT

[1] This is a motion by the plaintiffs for summary judgment pursuant to r. 20 of the Rules of Civil Procedure. The underlying action engages s.258 of the Insurance Act, R.S.O. 1990, c.1-8 (the Act). It comes before me in 2015, 23 years after the car accident which gave rise to the dispute.

[2] On July 19, 1992 a vehicle driven by one Janez Stevancec (Stevancec) collided with a vehicle in which one of the plaintiffs, Mario Zeitoun, was a passenger. Tragically, he was severely injured and has been confined to a wheelchair ever since. He has been unable to work with the exception of very minor work under a government program for disabled persons.

[3] On October 8, 2014 Justice Flynn granted judgment, without opposition, assigning liability against the estate of Stevancec. (He died in 2005.) Justice Flynn ordered an assessment of damages.

[4] On November 19, 2014 an assessment of damages was held before Justice Broad. He assessed damages of approximately $6 million, including FLA claims of $300,000.00, inclusive of interest and costs.

[5] On December 9, 2014 the plaintiffs issued the within action pursuant to s.258 of the Act, with respect to this judgment and assessment. The plaintiffs eventually discontinued the proceedings against all but one of the defendants. The exception is TD Home and Auto Insurance Company (TD). The plaintiffs claim that Stevancec had an automobile insurance policy with a predecessor of TD, the Prudential Assurance Company Limited (Prudential), for $1,000,000.00 in third party liability insurance at the time of the accident in July, 1992. As a result, they claim that TD is liable for all or part of the $6 million damage claim.

[6] Section 258 of the Act provides:

Any person who has a claim against an insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy, …, may, upon recovering a judgment therefor … against the insured, have the insurance money payable under the contract applied in or towards satisfaction of the person’s judgment …

[7] TD’s defence is fourfold: (1) s.258 does not apply because Stevancec did not have an auto insurance policy with Prudential in July 1992; (2) if there was such a policy, TD did not assume any liability for it; (3) the claim is statute-barred; and (4) the damages claimed are either excessive or unrecoverable.

[8] In order to grant summary judgment, I must find, first, that Stevancec had a “contract evidenced by a motor vehicle liability policy”. Second, I must find that the policy was with Prudential because it is from Prudential that the plaintiffs make their claim against TD.

[9] If I cannot find that there was a policy with Prudential, the remaining issues – assumption of liability, the Limitations Act, and what is recoverable – become moot.

[10] For the reasons that follow, I dismiss the motion for summary judgment. I am not satisfied on the evidence before me that Stevancec had a motor vehicle liability policy with Prudential at the time of the accident in July 1992.

[11] On a summary judgment motion, the court will find no genuine issue requiring a trial when the motions judge is able to reach a fair and just determination on the merits. The judge should determine if there is a genuine issue requiring a trial based only on the evidence before her, without using the new fact-finding powers in r. 20.04(2.1). (Hryniak v. Mauldin, 2014 SCC 7 at para. 49 and 66).

[12] The evidence need not be equivalent to what would be provided at trial, but it must be such that the judge is confident that she can fairly resolve the dispute. A documentary record, particularly when supplemented by the new fact-finding tools, is often sufficient to resolve material issues fairly and justly. (Hryniak, para. 57).

[13] The parties agree that with respect to the issue of whether Stevancec had a policy, the evidence before me is all there is. Proceeding to trial would not generate different or better evidence. Nor do I need to use the new fact-finding powers.

[14] D. M. Brown J. (as he then was) observed at paragraph 4 of The Bank of Nova Scotia v. Allin, 2014 ONSC 899 that the evidentiary record on a summary judgment motion may not be as extensive as that in a “conventional trial”; nonetheless, in applying the law to the facts, the motions judge must be able to conclude that the plaintiff has established its claim on a balance of probabilities before granting judgment in its favour.

[15] Unfortunately, with the passage of time, all of the evidence in this case is circumstantial. If the plaintiffs, or more accurately, those acting on their behalf had been more diligent in collecting evidence shortly after the accident, the result might have been different.

[16] At the time of the accident, Constable Gill, the investigating officer, wrote on his accident report that Stevancec had an insurance policy number of 01-21-11099333. Unfortunately, he failed to write down the name of the insurer and wrote something else down. He was examined in May 2015. Not surprisingly, he could not remember the accident or the report. He assumed that Stevancec had produced a pink slip, with the policy number on it, because he wasn’t charged with driving while uninsured. But as TD points out, even if Stevancec had produced a pink slip, this does not prove that an insurance policy actually existed at the moment when the accident occurred. It could have been terminated or cancelled for any number of reasons.

[17] The plaintiffs issued their claim against Stevancec on July 18, 1994. It was served on September 16, 1994. The claim appeared to sit idle for five years.

[18] On September 21, 1999, an investigator advised the plaintiffs that an MTO search and insurance search were conducted. No evidence is provided as to what was involved in either search. The investigator reported that the searches disclosed Stevancec’s policy, numbered 01-20-1109933, with “Prudential”. That policy number differs from Constable Gill’s reported number of 01-21-11099333 in two places. This evidence does not prove that Stevancec had a policy in July 1992. If anything, it should have led to more investigation by the plaintiffs.

[19] The plaintiffs then wrote a total of five letters to Prudential between October, 1999 and May, 2000 asking Prudential to respond to the claim against Stevancec. Prudential never responded. In 2005, the plaintiffs wrote twice to TD. In December 2005, TD responded that it was unable to locate any claims or policies matching the information provided by the plaintiffs. These letters are not evidence that Stevancec had a policy.

[20] In September 2014 the plaintiffs conducted a search of Stevancec’s MTO license plate renewal applications in May, 1991, 1992 and 1993. No proof of an actual policy is required upon license plate renewal, merely the name of an insurer and a policy number. The applications prove nothing other than on each application Stevancec wrote “Prudential”, or some variation thereof, and inserted a different policy number, changing one or two numbers on each so that they were all close to each other but slightly different. The discrepancies would likely escape notice on a superficial reading of each application.

[21] In March 2015 the plaintiffs obtained an affidavit from Stevancec’s daughter, Sonja Albano. As it happened, Ms. Albano worked for an insurance broker in 1992, when the accident occurred. She made a bald statement that the brokerage, Dan Lawrie Insurance Brokers Inc., placed her father’s insurance. She provided no supporting evidence. I find her affidavit to be supposition, speculation and hearsay. For example, she relied upon the MTO license plate renewal applications as proof that the broker must have placed insurance for Stevancec with Prudential. Because Prudential was on the applications, and the broker used Prudential, and she wouldn’t have let him drive without insurance, she was virtually certain he had insurance with Prudential. This is complete speculation based on hearsay. It is also circular at best. I find that her affidavit does not prove that Stevancec had insurance with Prudential.

[22] The only thing Ms. Albano could state with any certainty was that she had ordered an “AutoPlus” search. It showed that in December 1994 Stevancec had a renewal policy with Royal & Sun Alliance Facility. This suggested that somewhere prior to December 1994 he had lost his insurance, was basically uninsurable, and was required to pay significantly higher premiums to obtain Facility coverage. TD speculated that this proved he did not have insurance with Prudential or had lost it at the time of the accident. I don’t accept this. But nor do I accept that this supports Stevancec having insurance with Prudential in July, 1992.

[23] Not surprisingly, TD did not cross-examine Ms. Albano. Instead, TD examined an employee of the insurance broker, Ms. Nancy Swietek, who had worked there since approximately 1987. Her evidence was that she had no recollection of a claim being presented by Stevancec or a claim by the plaintiffs. In the early 1990’s, they had paper files for all their clients and, if asked, would have been able to determine if the client had auto insurance and with whom. If you were a former client, your file would be kept seven years before being shredded. There was a fire in the mid-1990’s which destroyed the stored records. Active client files were transferred to a new system in 2003; the broker had no record of Stevancec being a client, because he wasn’t one at the time of the changeover. This merely proved was that there was no evidence one way or another as to whether Stevancec had a Prudential policy in July 1992.

[24] Ms. Swietek gave evidence that if a claim was reported by a client, it would be forwarded to the insurer and a copy kept on file. If the insurer was not responding and there was a valid policy of insurance, the broker would intervene and ensure that a defence was provided.

[25] This did not happen here. TD argues that this shows Stevancec had no valid insurance, at least through this broker.

[26] Finally, there is the evidence from Craig Richardson, the VP of Claims Operations for TD Insurance (the parent of TD). He states that TD Insurance’s records were searched, and there was no record of an insurance policy for Stevancec or a claim in respect of a policy for Stevancec. He acknowledged that this could be for a whole variety of reasons.

[27] It is not incumbent upon TD to prove a negative – that it did not have a policy with Stevancec. It is incumbent upon the plaintiffs to prove that Stevancec did have a policy, or at least he did with Prudential. I find that they haven’t. Not only have they not proven a policy with Prudential; they have not proven that Stevancec had any policy at all in July 1992. I say this having considered all of the circumstantial evidence put forward by the plaintiffs. I am not satisfied that it is enough.

[28] If I had found that the plaintiffs had proven on a balance of probabilities that Stevancec had a policy of insurance with Prudential, I would have ordered a mini-trial on the issue of its alleged assumption by TD. I would have done so despite TD’s argument, in which the plaintiffs concurred, that whether or not TD acquired such a policy could be determined entirely on the documentary record before me.

[29] I need not consider the Limitation Act argument, other than to comment that TD’s argument appears to be based more on laches than a strict limitation period argument. Nor did I consider whether the remedy is a claim for $6,000,000, $1,000,000 or $200,000.

[30] It is unfortunate that no investigation or inquiries were made with the insurance broker in the 1990’s and that no examination of Stevancec took place prior to his death. If this had been done, perhaps the plaintiffs would now be in a position to prove that Stevancec had a policy of insurance in July 1992 with Prudential or someone else.

[31] I would hope that the parties can agree on the issue of costs. It not, they may make brief written submissions, of no more than three pages, plus any necessary back up documentation, with TD to provide its submissions within 20 days of the release of this endorsement and the plaintiffs’ submissions within a further 20 days thereafter.

K. HOOD J.

Date: July 14, 2015