ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 4306/08
DATE: 20150923
BETWEEN:
Jocelyn Hebditch
Plaintiff
– and –
Jeanne Birnie, Michael Birnie and Ted Seddon (not a party to this motion)
Defendants
J. Malette, for the Plaintiff
A. Steinman, for the Defendant Jeanne Birnie/Estate of Jeanne Birnie
G. Marcuccio, for the Defendant Michael Birnie
HEARD: September 11, 2015
A. D. Kurke J.
RULING ON MOTION
[1] The Plaintiff brings a Motion for Orders:
To set aside the Consent Order of September 26, 2008 dismissing the action as against defendant Michael Birnie (“Mr. Birnie”);
In the alternative, that the Defendant Estate of Jeanne Birnie be estopped from taking the position in the action that she was incompetent at the time of the incident;
To strike the Defendant Estate’s Response to the Plaintiff’s Request to Admit certain facts.
[2] For the reasons that follow, I decline to grant the first two headings of relief, but I grant the third.
Overview of Facts
[3] Jeanne Birnie, now deceased, was the mother of Mr. Birnie. Ms. Birnie passed away during the course of the litigation; as a party, she will hereafter be referred to as the “Defendant Estate”. This action arises out of a “slip and fall” incident at the former residence of Jeanne Birnie in North Bay on March 16, 2007. The Plaintiff was, at the time, Jeanne Birnie’s caregiver, having been hired by Mr. Birnie to provide in-home personal health support to Ms. Birnie.
[4] Mr. Birnie is a North Bay lawyer of some seniority. When Plaintiff’s counsel initially issued a Statement of Claim as against Ms. Birnie on July 26, 2007, it designated her as an incompetent person, with Mr. Birnie as her power of attorney. When served with a copy of the Claim, Mr. Birnie spoke with James Wallbridge, senior counsel at the firm representing the Plaintiff, and a lawyer with great respect for Mr. Birnie. On evidence at the hearing, though not admitted by the Defendant Estate, the two men had already spoken earlier, when Mr. Wallbridge had sought and received Mr. Birnie’s permission for the Wallbridge firm to act against Mr. Birnie’s mother.
[5] For economy of presentation, I will put the nature of the conversations between the two men in the words and numbering of the Request to Admit that was served on the Defendant Estate on April 22, 2014:
James Wallbridge spoke to Michael Birnie on two occasions regarding this file.
The first occasion was to indicate that we had been retained. James Wallbridge indicated to Mr. Birnie that we would send the file to other counsel if he wished.
Mr. Birnie indicated to Mr. Wallbridge that he had no trouble with our firm acting as counsel, as there was an insurance policy in place to cover Ms. Birnie. Mr. Birnie advised Mr. Wallbridge that he would speak to the insurance adjuster about the claim.
This conversation would have taken place in mid-May of 2007.
A Statement of Claim was served on August 21, 2007. It named Ms. Birnie as an incompetent person.
Subsequently, Mr. Birnie called Mr. Wallbridge and indicated that his mother was competent. Mr. Wallbridge apologized to Mr. Birnie and indicated that he would address this matter with Ms. Malette.
As a result of this conversation, a new Statement of Claim was issued and the old action discontinued on or about August 28, 2007.
The Statement of Claim naming Jeanne Birnie was issued February 25, 2008, and served shortly after.
Mr. Birnie was very clear in his conversation with Mr. Wallbridge that his mother was clear thinking and competent when they spoke after service of the first Statement of Claim.
Mr. Birnie said to Mr. Wallbridge “my mother is not incompetent god damn it”.
[6] The revised Statement of Claim named Jeanne Birnie, Michael Birnie and Ted Seddon defendants. It was issued February 25, 2008, and served on Mr. Birnie in April of that year. Ted Seddon, the third defendant, who was employed to remove snow at the residence in question in the period around the date of loss, played no part in this motion.
[7] Between May and September 2008, Mr. Birnie himself and counsel to Mr. Birnie corresponded repeatedly with Plaintiff’s counsel, vigorously seeking that Mr. Birnie be released from the action on the basis that he had no active role in the maintenance of the residential premises where the incident occurred. The “slip and fall” is allegedly attributable to poor winter snow and ice clearing.
[8] On August 14, 2008, Lynn Turnbull (“Ms. Turnbull”), newly retained as counsel for Ms. Birnie, wrote to Plaintiff’s counsel, to advise that she was attempting to determine whether or not Ms. Birnie would require a Litigation Guardian.
[9] On September 9, 2008, Jeanne Birnie’s Statement of Defence was issued. It commenced in paragraph 1 with the following: “The Defendant, JEANNE BIRNIE, a mentally incapable person, represented by her Litigation Guardian …”. Nowhere in that pleading does Ms. Birnie specifically claim that her mental health issues rendered her not an “occupier” within the meaning in the Ontario Occupiers’ Liability Act.
[10] On September 10, 2008, Plaintiff’s counsel wrote to Mr. Birnie’s counsel, indicating that she was prepared to dismiss the action against Mr. Birnie.
[11] On September 16, 2008, Ms. Turnbull wrote to Plaintiff’s counsel suggesting that examinations for discovery be shortened, as “my client is not competent to testify”. Ms. Turnbull consented to release Mr. Birnie from the action, and also wrote the following:
Your client was clearly aware that mine was declining mentally in the months leading up to the alleged slip and fall accident. She relied upon your client, who was at that time providing her with round-the-clock care including home maintenance services, to determine whether a dangerous condition existed on her property. It can (and will) be argued that your client, who herself performed some snow removal and salting in early March of 2007, assumed responsibility for the condition of the driveway and any pathways on the property.
[12] Plaintiff’s counsel wrote to Ms. Turnbull October 1, 2008, and indicated that she had received the September 16 letter. However, she advised that she had been away until September 23, and then attended discoveries in Sudbury.
[13] On September 26, 2008, an Order issued on consent, dismissing the case against Mr. Birnie. It is that Order that the Plaintiff now seeks to set aside, some seven years after the fact.
[14] In a discussion on the record on October 9, 2008, concerning who would be examined for discovery, Ms. Turnbull explained, in the presence of Plaintiff’s counsel, that she had notified Plaintiff’s counsel in September that her client Ms. Birnie was incompetent, and would be represented by a Litigation Guardian, and that Ms. Birnie was not herself competent to testify. Only Mr. Seddon was cross-examined for discovery that day.
[15] Examination for Discovery of Ms. Birnie by her Litigation Guardian took place June 25, 2009. The Plaintiff’s examination commenced that day, and concluded April 7, 2010.
[16] The Trial Record was passed August 19, 2010. A pre-trial conference on the matter was held April 28, 2011. At that conference, it appears that Ms. Birnie’s incompetence was discussed as a trial issue.
[17] Pursuant to an Order dated April 13, 2011, Ms. Birnie’s Statement of Defence was amended, adding new details, including: (at para. 7) that the Plaintiff “was charged with responsibility for maintaining the premises”; and (at para. 11) that Ms. Birnie was claiming not to be an occupier within the meaning of the Occupiers’ Liability Act. Plaintiff’s counsel had written to Ms. Turnbull on March 24, 2011 indicating her consent to the amendment.
[18] Ms. Birnie brought a motion for Summary Judgment, which was heard by Varpio J. September 13, 2013. Justice Varpio dismissed the motion for Reasons delivered October 28, 2013 (2013 ONSC 6458). Justice Varpio found, for the purpose of that motion, that Mr. Birnie’s statement to Mr. Wallbridge asserting his mother’s competence was of no evidentiary value. Concerning the Occupiers’ Liability Act issue, Justice Varpio further held, at para. 38, that “while the defendant may ultimately prove that Ms. Birnie lacked the requisite mental capacity to make her an occupier of the premises”, he was unable to achieve a full appreciation of Ms. Birnie’s mental state on the motion.
[19] On April 22, 2014, Plaintiff served on the Defendant Estate a Request to Admit dated April 8, 2014, containing the factual items noted above with respect to the conversations between Mr. Birnie and Mr. Wallbridge.
[20] A Response to that Notice was received by Plaintiff’s counsel the next day. That Response merely indicates a refusal to admit the truth of any of the facts, but with no reason given for the refusal. In relevant portion, the Response states “…the Defendant…Estate: 1. Admits the truth of fact numbers NONE[;] 2. Denies the truth of fact numbers NONE[;] 3. Refuses to admit the truth of fact numbers 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10” [emphasis added].
The Request to set aside the Dismissal Order
Rule 59.06(2)(a) provides:
(2) A party who seeks to,
(a) have an order set aside or varied on the ground of fraud
or of facts arising or discovered after it was made;
may make a motion in the proceeding for the relief claimed.
[21] Fraud is not alleged in this case. Rather, the Plaintiff argues that the Defendant Estate did not advance any claim of Ms. Birnie’s incompetence until long after the case against Mr. Birnie had been dismissed. The Plaintiff further claims that the Plaintiff agreed to dismiss the case as against Mr. Birnie because of representations made by Mr. Birnie to Mr. Wallbridge that Ms. Birnie was competent.
[22] Counsel for Mr. Birnie argues that, in fact, what can be said to have arisen in this case only after the Order dismissing the action against Mr. Birnie, is the full argument that Ms. Birnie’s incompetence at the time of loss forestalls any finding that she was an “occupier” under the Occupiers’ Liability Act. In his submission, the fact of Ms. Birnie’s potential incompetence was or should have been known from the outset, given that the Plaintiff designated Ms. Birnie as “incompetent” in the original Statement of Claim.
[23] The application of Rule 59.06(2)(a) involves the interplay of conflicting values. Finality is so important a goal in court proceedings, that a final judgment should not be lightly interfered with. A final judgment stands as a res judicata, which should only be set aside in situations where other legitimate interests outweigh the importance of finality as a guiding principle. This rule encourages parties to vigorously put forward their best case in a single action: on this point, see a case relied on by all parties, Tsaoussis (Litigation guardian of) v. Baetz, 1998 5454 (ON CA), [1998] O.J. No. 3516 (C.A.), at paras. 18-20.
[24] Accordingly, the application of Rule 59.06(2)(a) must be considered on a principled basis. Conveniently, in the Tsaoussis decision, the Court of Appeal put forward a test for determining whether a final order should be set aside, giving pride of place as a preliminary hurdle to the issue of whether the alleged new evidence could have been available before the decision in question was made. So at para. 44:
These and numerous other authorities . . . recognize that the finality principle must not yield unless the moving party can show that the new evidence could not have been put forward by the exercise of reasonable diligence at the proceedings which led to the judgment the moving party seeks to set aside. If that hurdle is cleared, the court will go on to evaluate other factors such as the cogency of the new evidence, any delay in moving to set aside the previous judgment, any difficulty in re-litigating the issues and any prejudice to other parties or persons who may have acted in reliance on the judgment. The onus will be on the moving party to show that all of the circumstances are such as to justify making an exception to the fundamental rule that final judgments are exactly that, final.
[25] While Tsaoussis addresses an attempt to set aside a judgment after a hearing, with minor modifications similar reasoning should apply to orders made on consent. For even though no evidence necessarily was presented, and no contentious issue required a judicial decision or a jury verdict, as a matter of policy a rule favoring finality should encourage parties not lightly to agree to orders that will have a significant impact on other parties and on the course of the litigation. Based on Tsaoussis, factors that should be weighed include:
a. as a preliminary hurdle, whether the new facts were available by the exercise of reasonable diligence at the time of the consent order;
b. delay in moving to set aside the consent order;
c. any difficulty in now litigating the issues;
d. any prejudice to other parties.
[26] In this case, these factors tell against the request to set aside the consent Order of dismissal of the action against Mr. Birnie.
[27] As pointed out by counsel to Mr. Birnie at the hearing of this motion, while the argument relating to competence and its interaction with the concept of occupancy under the Occupiers’ Liability Act may not have been clearly spelled out until the Amended Statement of Claim was filed, the facts on which such a claim could be based had arisen in this action almost from the start, and were clear before the issuance of the consent Order. Circumstances indicating the competence issue include at least the following up to October 1, 2008:
a. In the initial Statement of Claim, Plaintiff’s counsel had designated Ms. Birnie as an incompetent person;
b. In correspondence of August 2008, Ms. Turnbull clearly advised Plaintiff’s counsel that she was seeking to determine whether there should be a Litigation Guardian;
c. In correspondence of September 16, 2008, prior to the issuance of the consent dismissal Order on September 26, 2008, Ms. Turnbull set out very clearly that Ms. Birnie’s declining mental state in the period leading up to the date of loss would be put into play, and that Ms. Birnie was not competent to testify.
[28] Where it is a change in the argument or position of a party that arises, but that new argument or position is based on facts that were known or should have been known by the exercise of reasonable diligence, Rule 59.06(2) is not applicable: see, e.g., Hall v. Powers (2005), 2005 23121 (ON SC), 80 O.R. (3d) 462 (Sup. Ct.), at paras. 9, 12-13.
[29] The Plaintiff argues that there was no reason to examine the issue of Ms. Birnie’s competence at first, in that the incompetence that befell Ms. Birnie by the summer of 2007, and that was set out in the initial Statement of Claim, had nothing to do with her competence in March 2007. This argument must fail. A duty of reasonable diligence must, at the least, require counsel to explore the strong possibility that Ms. Birnie’s weakened mental state, and its legal impact, extended back to the date of loss, a mere four months earlier. Indeed, the Plaintiff’s job was to attend to Ms. Birnie, who required daily assistance because of her health issues.
[30] It is further argued that Mr. Birnie’s assertions of his mother’s competence somehow dictated the direction of proceedings. Whatever possibilities arise from Mr. Birnie’s discussions with Mr. Wallbridge, his view of the facts does not tell against other facts that exist in the case, or that might exist, or that require further exploration. Reasonable diligence is not satisfied by relying on a son’s optimistic view of his mother’s condition in order to justify taking no steps to investigate or consider Ms. Birnie’s mental state around the date of loss, in the face of so many indications that there could be a genuine issue about it.
[31] I turn now to the issue of delay. In this context, I consider the argument that Plaintiff’s counsel should only be taxed with real knowledge of the legal relevance of Ms. Birnie’s competence issues after the consent dismissal had already issued, as in her letter of October 1, 2008, Plaintiff’s counsel did indicate that she was only then able for the first time to acknowledge Ms. Turnbull’s September 2008 correspondence. It may well be that the Plaintiff was not aware of the facts and related argument in the September 16, 2008 letter until after the dismissal Order of September 26, 2008.
[32] Presuming, without deciding, this to be the case for the sake of the argument, sufficient facts had been laid before Plaintiff’s counsel by the end of September 2008 to dedu