Kowbuz v Singh et al, 2016 ONSC 1746
CITATION: Kowbuz v Singh et al, 2016 ONSC 1746
COURT FILE NO.: CV-09-376804
DATE: 20160314
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CHRISTOPHER KOWBUZ, by his Litigation Guardian, Theodore Kowbuz, RUTH KOWBUZ, LEANNE KOWBUZ and THEODORE KOWBUZ, personally
Plaintiffs
– and –
JAGDEEP SINGH and INTACT INSURANCE COMPANY (previously operating as ING Insurance Company of Canada)
Defendants
-and-
ECONOMICAL MUTUAL INSURANCE COMPANY (added pursuant to Section 258(14) of the Insurance Act)
Third Party
No one appearing for the plaintiffs
David Murray for the Defendant, Intact Insurance Company (previously operating as ING Insurance Company of Canada)
Amir Fazel for the Third Party, Economical Mutual Insurance Company
HEARD: March 9, 2016
REASONS FOR DECISION
DIAMOND J.:
Overview
[1] This proceeding arises from a motor vehicle accident which took place on April 22, 2007. The plaintiff Christopher Kowbuz was a pedestrian who was struck by a vehicle operated by the defendant Jagdeep Singh (“Singh”). The plaintiff sued Singh and the plaintiff’s own insurer, the defendant, Intact Insurance Company (“Intact”) under both the OPCF-44R Endorsement and the unidentified, uninsured and/or underinsured provisions of the plaintiff’s policy with Intact.
[2] Approximately one year after this proceeding was commenced, Economical Mutual Insurance Company (“Economical”) was added as a statutory third party pursuant to section 258(14) of the Insurance Act R.S.O. 1990 c. I.8.
[3] None of the parties to these proceedings ever served a jury notice. Between 2010-2011, the parties (with the exception of Singh) participated in negotiations which resulted in a partial settlement codified by the terms of a consent Judgment dated June 23, 2011 of Justice Hoy (as she then was).
[4] The Judgment provides, inter alia, that the parties are to proceed to a trial on the issues of (a) Singh’s liability for the accident, and (b) the “insurance issues” (more particularized hereinafter). The Judgment states that the insurance issues shall be tried by a judge.
[5] Economical now moves for an order granting it leave to serve and file a Jury Notice after the close of pleadings. Intact opposes Economical’s motion, and in the event Economical is successful, Intact brings its own motion seeking an order striking out any Jury Notice.
Jury Notices
[6] There is no dispute that the right to a trial by jury is an important right, and one which will not be denied or interfered with in the absence of compelling reasons. That said, as recently held by Justice Dunphy in Smith v. Trisect Construction Corporation 2016 ONSC 782 (S.C.J.), the right to a jury trial is not absolute and “must be claimed diligently and having regard to the rules conditioning its use set forth in the Rules of Civil Procedure.”
[7] Pursuant to Rule 47.01 of the Rules of Civil Procedure, a party to an action may require that the issues of fact be tried, or the damages be assessed (or both), by a jury by delivering a Jury Notice at any time before the close of pleadings.
[8] The Court nevertheless retains a discretion to grant a party leave to serve and file a Jury Notice after the close of pleadings. In Nikore v. Proper (2010) 2010 ONSC 2307, 101 O.R. (3d) 469 (Div. Ct.), the Divisional Court held that in deciding whether to grant leave, the presiding Judge must consider two essential factors: (a) the nature of the delay (including the length of the delay and the reasons for it) and (b) whether granting leave would result in prejudice to the other side.
Delay Through Inadvertence?
[9] While the allegations in the Statement of Claim against Singh are framed in negligence, it is Economical’s position in these proceedings that Singh intentionally drove his vehicle into the plaintiff with the intent of injuring him. Economical further argues that if Singh is found to have acted intentionally as alleged, then its Statutory Third Party liability limit would be reduced to the sum of $200,000.00.
[10] In support of its motion, Economical has filed the affidavit of its solicitor J. Claude Blouin (“Blouin”) who has had carriage of the defence of the Statutory Third Party claim since its inception. Blouin has testified that, generally speaking, his firm’s failure to serve and file a Jury Notice was due to inadvertence.
[11] It is Blouin’s evidence that his firm’s practice is to “always deliver Jury Notices in our defence of an actions involving alleged personal injury, unless the action involves a fatality or where a Jury Notice is prescribed by law.” Blouin states that Economical’s instructions on this file were to serve and file a Jury Notice along with its statement of defence to the Statutory Third Party claim.
[12] In my view, Blouin’s attempt to fall on his sword is not reconcilable with the 2010-2011 events leading up to the negotiations, the settlement and the Judgment itself.
Settlement Negotiations
[13] The plaintiff suffered catastrophic injuries. As stated, the plaintiffs, Intact and Economical all pursued settlement discussions to arrive at a partial settlement which would allow the plaintiffs to receive immediate compensation in accordance with the limits of both the policies of Intact and Economical, while allowing Intact and Economical to continue these proceedings with respect to any coverage issues between them.
[14] In the course of those negotiations, a draft Judgment was prepared by counsel for the plaintiffs and circulated among counsel for Intact and Economical. The two salient paragraphs in that early iteration of the Judgment are as follows (my emphasis in bold):
“6. THIS COURT FURTHER DECLARES that the Defendant, Intact Insurance Company (Intact) acknowledges that the settlement amount referred to in paragraph 1 above and the funding amount to produce the payments as set out in Schedule “A” hereto are amounts payable under its policy providing underinsured and uninsured coverage to all or some of the Plaintiffs in the event that the Defendants, Jagdeep Singh are found not insured for the accident following the liability trial referred to herein.
- THIS COURT FURTHER ORDERS AND ADJUDGES that the Defendants and Third Party will proceed with a trial for determination as to whether the Defendant, Jagdeep Singh is liable for the accident (which shall be determined by a jury subject to further agreement or order of the Court, and which is hereinafter referred to as the “liability trial”) and to determine whether there is coverage for the Defendant, Jagdeep Singh, under the Third Party’s policy or policies and if so, whether the Third Party’s liability limit is reduced to the sum of $200,000.00 (which insurance issues shall be determined by the judge after the liability trial) for the claims arising out of the accident. It shall not be an issue at the trial whether the Plaintiff, Christopher Kowbuz, was contributory negligent.”
[15] The above draft paragraphs contemplated the following:
● The issues of the plaintiffs’ damages and contributory negligence were settled and no longer the subject matter of any trial;
● The parties agreed that the liability trial (i.e. whether Singh is liable for the accident) would proceed before a jury;
● The parties agreed that the issue of whether Singh is found “not insured for the accident” would follow the liability trial; and,
● The parties agreed that the issue of whether there is coverage for Singh under Economical’s policy would be determined by a judge after the liability trial.
[16] Again, while no party had served or filed a Jury Notice to that point, the draft Judgment prepared by the plaintiffs proposed that the liability trial proceed on consent of the parties before a jury. While both the issues of whether Singh was insured for the accident, and Economical’s liability to cover the plaintiff’s losses would be tried “after the liability trial”, the draft Judgment only explicitly states that the latter issue (Economical’s coverage exposure) be tried by a Judge.
[17] In response, counsel for Intact reviewed the draft Judgment and delivered a letter advising, inter alia, of the following:
a) Intact took issue with the contents of paragraph 6 because it believed that Economical was bound to pay the $200,000.00 minimum limits in any event regardless of whether Singh was found “not insured for the accident”;
b) paragraph 8 ought to simply state:
- THIS COURT FURTHER ORDERS AND ADJUDGES that the defendants and third party will proceed to trial on all issues raised in the pleadings, other than the defence of contributory negligence, and the assessment of damages, which has been settled and agreed upon between the parties; and,
c) as there was no Jury Notice “at present”, there was no risk of a mistrial if the trial judge became aware of Economical’s without prejudice payment of the plaintiffs damages.
The Judgment
[18] The parties (absent Singh) ultimately settled the issues of damages and contributory negligence, and entered into the consent Judgment. The salient paragraph in the Judgment states as follows (again, my emphasis in bold):
“7. THIS COURT FURTHER ORDERS AND ADJUDGES that the Defendants and Statutory Third Party will proceed to trial on all issues raised in the pleadings, other than the defence of contributory negligence, and the assessment of damages which has been settled and agreed upon between the parties. The parties will also proceed to trial for determination as to whether the defendant, Jagdeep Singh, is liable for the accident; and to determine whether there is coverage for the Defendant, Jagdeep Singh, under the Statutory Third Party’s policy or policies and if so, whether the Statutory Third Party liability limit is reduced to the sum of $200,000.00 (which insurance issues shall be determined by the judge after the liability trial) for the claims arising out the accident. It shall not be an issue at the trial whether the plaintiff, Christopher Kowbuz, was contributory negligent.”
[19] The contents of this paragraph are less than clear, and arguably create confusion as to what remained to be tried over and above the settlement of the plaintiffs’ damages and contributory negligence. Given that the only issues left to be tried were Singh’s liability for the accident, and the resulting insurance coverage issues, I do not understand why the second sentence in this paragraph uses the word “also”, which makes it read as if those two outstanding issues are in addition to a pending trial of “all issues raised in the pleadings”. What other issues raised in the pleadings were to be tried other than Singh’s liability for the accident and insurance coverage between Intact and Economical? Certainly, the parties could have chosen better words and phrases to convey the terms of their agreement.
[20] What is clear is that nowhere in this paragraph have the parties explicitly agreed to have either remaining issue tried by a jury. The issue of whether the liability trial would proceed before a jury was squarely placed before counsel for the parties during the negotiations. The previous iteration of the Judgment contemplated the liability trial proceeding before a jury. The consent Judgment clearly does not, and specifically states that the “insurance issues” shall be tried by a judge after the liability trial (of note, as Singh has since been noted in default and is thus deemed to admit all of the allegations made against him in the pleadings, the only true outstanding issue now left to be tried is that of coverage).
Decision
[21] Economical takes the position that the issue of whether Singh is found “not insured for the accident” is still a live issue, the disposition of which is premised upon whether Singh is found to have acted intentionally, and a jury is well equipped to make the necessary findings relevant to that issue.
[22] Paragraph 6 of the prior iteration of the Judgment contemplated the issue of whether Singh is found to be “not insured for the accident” to be tried after the liability trial (which liability trial was to proceed before a jury). As such, during the negotiations the parties appeared content to exclude the issue of whether Singh was insured from a potential jury trial.
[23] In my view, paragraph 7 of the Judgment mandates the parties to have the outstanding insurance issues tried by a judge, and not a jury. As such, the issue of whether Singh’s conduct was intentional must necessarily form part of the trial by a judge of the “insurance issues”.
[24] During its argument, Intact submitted that Economical’s decision to seek leave to serve and file a Jury Notice at this late stage was not based upon the inadvertence of counsel, but rather a tactical decision made to avoid the consequences of paragraph 7 of the Judgment and to have the issue of Singh’s intent tried by a jury. I agree. The Judgment binds the plaintiff, Intact and Economical, and cannot be varied or set aside in the absence of Economical moving under Rule 59.06(2) for such relief. Economical is admittedly not seeking any such relief on its motion, and in any event I do not find the presence of the necessary evidence required to support an order under 59.06(2).
[25] While Blouin was not cross-examined on his affidavit, the documentation produced by the parties supports Intact’s position. During the negotiations, Economical had a fulsome opportunity to insist upon or further negotiate the inclusion of a term requiring either or both of the outstanding issues to be tried by a jury. Blouin was specifically advised by correspondence that even though no Jury Notice had been served by any party at that time, the parties could nevertheless agree to have one or both outstanding issues tried by a jury. The Judgment does not even mention either outstanding issue being tried by a jury.
[26] Through the guise of seeking leave to serve and file a Jury Notice after the close of pleadings, I find Economical is effectively seeking to vary or avoid the consequences of the consent Judgment. While the evidence of alleged inadvertence is questionable and would, on its own, support the dismissal of Economical’s motion, I also find the presence of actual prejudice to Intact if Economical was granted leave to serve and file a Jury Notice. Intact participated in lengthy settlement negotiations which culminated in a consent Judgment. There are very limited grounds upon which a consent Judgment can be set aside. As held by Justice Allen in Davis v. Cooper 2010 ONSC 4320 (S.C.J.), a consent order is a contract that can only be set aside or varied by subsequent consent or upon the grounds of common mistake, misrepresentation, fraud or any other ground which could invalidate a contract.
[27] Intact negotiated in good faith with the plaintiff and Economical and relied upon the settlement and Judgment determining the balance of the issues to be tried in these proceedings. Granting Economical leave to serve and file a Jury Notice after the close of pleadings would undo the settlement and re-write the terms of the Judgment. This is clear and substantive prejudice to Intact.
[28] For these reasons, Economical’s motion is dismissed.
Costs
[29] The parties agreed that the successful party be granted its costs of these motions on a partial indemnity basis in the all-inclusive amount of $4,500.00.
[30] I therefore order Economical to pay Intact its costs of these motions in the amount of $4,500.00 and payable forthwith.
Diamond J.
Released: March 14, 2016
CITATION: Kowbuz v Singh et al, 2016 ONSC 1746
COURT FILE NO.: CV-09-376804
DATE: 20160314
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CHRISTOPHER KOWBUZ, by its Litigation Guardian, Theodore Kowbuz, RUTH KOWBUZ, LEANNIE KOWBUZ and THEODORE KOWBUZ, personally
Plaintiffs
– and –
JAGDEEP SINGH and INTACT INSURANCE COMPANY (previously operating as ING Insurance Company of Canada)
Defendants
– and –
ECONOMICAL MUTUAL INSURANCE COMPANY (added pursuant to Section 258(14) of the Insurance Act)
Third Party
REASONS FOR DECISION
Diamond J.
Released: March 14, 2016