Seguin v. Larocque, 2016 ONSC 2667

Seguin v. Larocque, 2016 ONSC 2667

CITATION: Seguin v. Larocque, 2016 ONSC 2667

COURT FILE NO.: C6827/02

DATE: 2016-04-25

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Lucien Seguin and Lucille Seguin

Plaintiffs

– and –

Ian Raymond Larocque and Armand Charbonneau

Defendants

COUNSEL:

Thomas L.W. Orendorff, for the Plaintiffs/Moving Party

Michael S. O’Neill, for the Defendants/Responding Party

Robert J. Leblanc, for the Defendants/Responding Party

HEARD: In Writing

DECISION ON MOTION

HENNESSY, J.

1This is a motion for leave to appeal the terms of an order permitting an amendment to the Statement of Claim.

2The plaintiffs sought leave to amend the statement of claim by increasing the prayer for relief from $550,000 to $2,500,000.00. The motions judge granted the amendment on terms, including the following disputed terms:

a. that interest not begin to run on the increased damages until the date of the amendment;

b. an award of costs on the motion to the personal defendants; and

c. providing the personal defendants with a right of discovery, right to seek additional medical examinations and right to receive disclosure, production and a financial review of the economic claim.

Case History

3This amendment came late in the motor vehicle litigation. The motion to amend was brought in 2013, years after the issuance of the statement of claim in 2002 and years after the motor vehicle accident. The matter was judicially pre tried in 2012 and was on the list for jury sittings in November 2013. The plaintiffs sought leave to amend their statement of claim from $550,000 to $2,500,000. The motion was hear on May 14, 2014. Leave to appeal the decision was filed May 26, 2014. As a result of the amendment, the defendants became personally exposed for any damage award over the policy limit of $1 million. The motion judge ordered the amendment on terms which purported to address the resulting prejudice to the defendants.

4From the outset, the case was defended by the defendants’ insurers. As the proposed amendment sought to increase the claim beyond the $1 million policy limit and exposed the personal defendants, they were given notice of the motion. Counsel for the defendants to the uninsured portion of the claim appeared at the motion along with counsel for the insurers. Counsel for the insured portion of the claim took no position on the motion to amend. Defendant’s counsel for the uninsured portion made submissions seeking terms of the amendment.

5On this motion for leave, only counsel for the insurers has made written submissions. There are no submissions from counsel for the defendants personally.

Test for Leave

6Leave to appeal an interlocutory motion shall not be granted unless:

a. there is a conflicting decision by another judge and it is desirable that leave to appeal be granted; or

b. there appears to be good reason to doubt the correctness of the order and the proposed appeal involves a matter of such importance that leave should be granted.

(Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 62.02(4)

Position of the moving party

7The plaintiffs submit that the suspension of pre-judgment interest as a term of granting an amendment to the statement of claim is a matter which raises issues of general importance and is the subject of conflicting opinions.

8The plaintiffs further argue that there is good reason to doubt the correctness of the decision because it was based on an incorrect statement of the law made in submissions by the defendants, and that varying the pre-judgment interest rate is done only where one of the litigants has delayed the proceeding. They submit that the imposed term would lead to under-compensation to the plaintiffs and in that sense is punitive. The plaintiffs rely on the decisions in Hales Contracting Inc. v. Tawland-Hewitson Construction Ltd., [1996] O.J. No. 970 (Ct. Jus. (Gen. Div.)) and Shea v. Manitoba Public Insurance Corp., 1991 CanLII 616 (BC SC).

Position of the Defendants

9The defendants submit that there is no reason to doubt the correctness of the decision of the motion judge. In that respect they assert that the amendment to the claim for damages caused extreme prejudice to the defendants personally. The prejudice includes personal exposure over the policy limits and the costs of retaining counsel personally to defend the over-policy amounts. The defendants submit that the motion judge had the discretion pursuant to Rules 26.01 and 1.04 and pursuant to the decision in Haikola v. Arseneau, 1996 CanLII 36 (ON CA) to grant the amendment on such terms as are just and appropriate in the circumstances.

Analysis

Whether there are Conflicting Decisions

10The plaintiffs argue that the decision in Hales conflicts with the decision of the motion judge. In Hales, the original motion judge had granted an amendment on terms that the plaintiffs make payments towards the defendants’ cost as condition of allowing the amendment to add a claim for punitive damages. On the motion for leave to appeal this term requiring payment towards costs was characterized as punitive towards the plaintiffs. While the motion for leave judge was of the view that last minute amendments must be dealt with firmly, he was of the view that the term imposed was significantly punitive that it could virtually nullify the proposed amendment. The court granted leave to appeal on the basis that the question involved a matter of general importance.

11The Hales decision was released in March 1996. It does not cite or refer to the decision of the Ontario Court of Appeal, in Haikola v. Arseneau which was released January 19, 1996.

12In Haikola the court found that prejudice to the defendants caused by a late amendment increasing the claim for damages to an amount in excess of the policy limits could be compensated by terms. The court imposed the following terms:

(1) The defendants are entitled to a further examination of the plaintiff;

(2) The defendants are entitled to a further independent medical examination of the plaintiff, if requested;

(3) The plaintiff shall pay to the defendants their costs of items (1) and (2), their costs thrown away before the May 1993 trial date, and their costs thrown away between the date of the order of the motions court judge and today’s date for any matters arising out of that order. All these costs shall be on a solicitor-and-client basis;

(4) The plaintiff shall not be entitled to pre-judgment interest for an eight month period of any amount(sic) awarded over $200,000; and

(5) The plaintiff shall pay to the defendants their costs of the motion before the motions court judge.

13These terms are very similar to the terms imposed by the motion judge in this case. In Haikola the court noted that these terms were intended to compensate for the prejudice caused by the amendment. The court did not characterize them as punitive or as a response to finding blame on the part of the plaintiffs for any delay caused by the amendment.

14While the subject decision may conflict with Hales, the decision of the Ontario Court of Appeal in Haikola is binding on this court. Haikola is authority for the proposition that the imposition of terms such as those imposed by the motion judge here is a fit and appropriate means to compensate the defendants for a late amendment which exposes a defendant to significant award for damages. On that question, it is a binding authority, notwithstanding that the decision in Hales came two months after Haikola was released. The plaintiffs’ argument fails to show that there are conflicting decisions on this point.

The Issue of the Pre-judgment Interest

15The plaintiffs argue that the Court has very limited discretion to vary the interest rate and can only do so if the plaintiffs have delayed the proceeding. As part of this argument the plaintiffs submit that the motion judge erred in accepting the respondent’s characterization of the duty of the insurer to the insured. The issue of duty as between the insurer and the insured factors into an allocation of blame or fault for the delay caused by the amendment.

16I am not persuaded that this argument is determinative one way or the other. In Hales, without any allocation of blame or fault, the Court imposed terms, including an adjustment to the interest provisions. The focus in Hales was on the prejudice to the defendants where there was a late amendment which caused them to be exposed personally to damages. There was no examination of fault. There was no allocation of fault. There was not even a “mention of fault”.

17In Somers v. Fournier, 2002 CanLII 45001 (ON CA), [2002] O.J. No. 2543 (ONCA) the court examined the question of entitlement to pre-judgment interest in the context of a venue dispute between jurisdictions where pre-judgment interest eligibility was treated in two very different ways. Cronk JJ.A. writing for the court in Somers concluded, at para. 30, by stating:

Section 128(1) of the statute (Court of Justice Act) confers a substantive right to claim pre-judgment interest on a person who is entitled to an order for the payment of interest. That right may be displaced, varied or reduced, in the discretion of the court, where the conduct of the claimant has adversely affected the speedy progress of the litigation.

18There is no need as the plaintiffs argue here to specifically find that the plaintiffs delayed the proceeding. One way or another, this amendment which was sought and obtained by the plaintiffs after the matter had been set down for trial adversely affects the speedy progress of the litigation. That is obvious.

19It would appear from a reading of Hales that the court accepted that a late amendment creating an over limits, uninsured damage claim prejudiced the defendants by, among other things, adversely affecting the progress of the litigation. The length of this litigation process is directly proportionate to the total amount of pre-judgment interest that will ultimately be awarded. There is no need to delve into when and how counsel for the insurer might have had an earlier opportunity to bring the issue to the attention of the defendants.

20The brief endorsement of the motion judge simply notes that he agrees that the defendants should not be prejudiced where the litigation strategies for over ten years have been conducted on the basis that this claim was under limits. In consequence, the motion judge ordered that interest not be payable on the increased amount until the date of the amendment. I disagree with the plaintiffs when they argue that the motion judge was influenced by incorrect submissions of the law. The reasons for the decision do not support this proposition. Nor do any of the listed examples in the transcript. Regrettably, this issue was forcefully argued by the plaintiffs on this motion for leave, when it was not germane to the issue.

Whether there is reason to doubt the correctness of the decision

21Further, I find that the motion judge imposed terms which mirrored the terms imposed in Haikola. As the court followed the single appellate decision which was put before that court or before me on the leave motion, I find there is no reason to doubt its correctness.

22Additionally, the terms imposed are consistent with the underlying philosophy and the general principle of the rules. Rule 1.04(1) requires the court to liberally construe the rules to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. Rule 26.01 requires the court to grant leave for an amendment at any stage of the proceeding on such terms as are just, unless prejudice would result that cannot be compensated for by costs or an adjournment.

23I read these rules in combination with the decision in Haikola to mandate the court to grant the adjournment and to use its discretion to fashion a remedy that fairly compensates the defendants and achieves the goals of Rule 1.04. The motion judge had broad discretion that could be exercised in a manner consistent with the general principle expressed in the rule including making such orders that are proportionate to the importance and complexity of the issues and the amount involved.

24There is no doubt that the amendment which for the first time exposed the defendants personally to damages of over $1 million was of great importance and complexity to them. As a result of the amendment, they were now facing a significant portion of the lawsuit without the benefit of the insurer counsel acting on their sole behalf and vulnerable to decisions, strategies and disclosure made by insurer counsel. The lawsuit had not been conducted on the basis of this exposure up until this point.

25I am satisfied that the motion judge’s exercise of discretion does not raise any reason to doubt the correctness of the decision.

26The leave for appeal is dismissed.

27Costs to the respondents. If counsel cannot agree on costs of this motion, counsel for the respondents may make very brief written submissions to me within 14 days and counsel for the appellants 28 days from the date of this decision.

The Honourable Madam Justice Patricia C. Hennessy