Court File and Parties
MOTION HEARD: 20170202 ONTARIO SUPERIOR COURT OF JUSTICE
EDWARD HORSEFIELD, and EDWARD HORSEFIELD, ESTATE TRUSTEE OF THE ESTATE OF THE LATE CYNTHIA HORSEFIELD, DECEASED Plaintiffs
- and - ECONOMICAL MUTUAL INSURANCE COMPANY Defendant
Counsel: Andrew Ottaway, for the Plaintiffs Tessa Warmelink, for the Defendant
Heard: February 2, 2017
Reasons for Decision
[1] Ian Horsefield was a tenant in a property owned by his parents in Prescott, Ontario.
[2] He had a Tenant’s Policy issued by Economical.
[3] In 2007 while performing maintenance and mechanical work on his automobile, including its brake lines, he removed the car’s gas tank from the vehicle in order to gain access to other components.
[4] The gas tank “fell or was dropped” and gasoline was spilled, causing the fire which damaged the landlords’ premises.
[5] The landlords’ insurer paid the damage claim and sought indemnity from the Tenant’s insurer Economical.
[6] The Tenant’s policy provided that there was no coverage for claims arising from “the ownership, use or operation of any motorized vehicle.”
[7] The insurer takes the position that this fire fell within that exception.
[8] Plaintiff’s counsel points to Whiten v. Pilot, 2002 SCC 18 at para 161 to note that at the outset Economical had a duty:
“the insurer must compensate in a timely manner. It has the right, even the duty to investigate claims, but must do so fairly and diligently”.
[9] I accept counsel for the Plaintiff’s submission that it is reasonable to assume that a full investigation was undertaken prior to the denial of coverage to Ian Horsefield of coverage under his Tenant’s Policy.
The Subsequent Action
[10] Since coverage was denied and apparently no “non waiver” based defence was undertaken Ian defended the claim of the landlords. The Statement of Claim was amended in a manner which it is suggested supported the factual framework desirable for this claim. Regardless, a judgment was obtained against Ian and an attempt to recover any portion from him by the Plaintiff was unproductive.
[11] The landlord’s insurer now seeks to enforce the judgment against Economical on the basis of section 132 of the Insurance Act which addressed the right of a claimant to recover from an insurer where the judgment against the insured is unsatisfied.
[12] The portion of the Act reads as follows:
Right of claimant against insurer where execution against insured returned unsatisfied
132.(1) Where a person incurs a liability for injury or damage to the person or property of another, and is insured against such liability, and fails to satisfy a judgment awarding damages against the person in respect of the person’s liability, and an execution against the person in respect thereof is returned unsatisfied, the person entitled to the damages may recover by action against the insurer the amount of the judgment up to the face value of the policy, but subject to the same equities as the insurer would have if the judgment had been satisfied.
Judgment Status
[13] What is the impact of a court judgment obtained on consent and not appealed upon such an insurer.
[14] I accept the argument of the Plaintiffs’ counsel that the decision is in effect “Res Judicata” and not open to collateral attack at this stage.
[15] Tab 3 paragraphs 34 to 36 describe a similar situation:
, 1961 CarswellOnt 69 Supreme Court of Canada Global General Insurance Co. v. Finlay , 1961 CarswellOnt 69, [1961] S.C.R. 539, [1961] I.L.R. 1-036, 28 D.L.R. (2d) 654 Global General Insurance Company (Defendant), Appellant and Harold Finlay (Plaintiff), Respondent Global General Insurance Company (Defendant), Appellant and Ivan Layng (Plaintiff), Respondent Kerwin C.J. and Taschereau, Cartwright, Judson and Ritchie JJ. Judgment: May 8, 1961 Judgment: May 9, 1961 Judgment: June 12, 1961 Proceedings: On appeal from the Court of Appeal for Ontario
In the case at bar no attempt was made either in the appellant's pleadings or in the evidence to impeach any of the findings made in the action of Finlay et al. v. Layng and Campbell except the finding that at the time of the accident the insured automobile was owned by Margaret Jean Campbell in her capacity as executrix. It has already been pointed out that the learned trial judge heard evidence on that point and decided it adversely to the appellant and that this finding is not now questioned. This, in my opinion, is sufficient to dispose of the ground of appeal with which I am now dealing.
However, I wish to rest my judgment on this point also on the view that the learned trial judge was right in his conclusion that in the circumstances of this case the fact that at the time of the accident the insured automobile was owned by Margaret Jean Campbell in her capacity of executrix was sufficiently established by proof of the judgment of Stewart J., the record in the action of Finlay et al. v. Layng and Campbell and the reasons of Stewart J. and that it was unnecessary for counsel for the plaintiffs to call the further evidence which, as a matter of precaution, they did call.
So long as the judgment of Stewart J. stood (and it was proved that no appeal was taken from it and that the time for appealing had expired) it, read in the light of the pleadings, furnished the best evidence of the nature of the claim asserted against Margaret Jean Campbell in her capacity as executrix for which the judgment had been recovered; and the question whether or not that claim, which had become merged in the judgment, was covered became simply a question of the construction of the terms of the policy. I have already expressed my agreement with the view of the Court of Appeal that on the true construction of the policy the claim was covered.
[16] The appellate courts seem to conclude that in a case such as is now before me the only meaningful issue is the “construction of the Terms of the Policy”.
[17] I find it is too late for an insurer that chose to be totally uninvolved for what is approaching 10 years from the fire, to now seek further information that might have had a bearing on the factual matrix.
[18] They made their bed and now must take it as it stands, at least for the purposes of productions.
[19] A motion for summary judgment was brought before Justice McEwen in March of 2016. It was adjourned to a master to deal with these productions issues. Yet it wasn’t until December 2, 2016 that the original Notice of Motion was brought shortly after Justice Firestone again adjourned a case conference scheduled for Nov 15.
[20] The CPC case conference is now scheduled for February 28, 2017 for the purposes of scheduling the summary judgment motion. I am delivering these oral reason so as to not compromise that date.
[21] Applying proportionality and considering the delays and clear earlier decision of the defendant not to become involved, I am not granting the request for further production and I am not convinced that the tests of Rule 31.10 are satisfied. This otherwise will be what in circumstances amounts to unduly delaying the summary trial of this long outstanding insurance claim.
[22] In coming to this decision, notwithstanding the able argument of counsel for the Defendant, in part based upon what I regard as a shifting approach to the more economical and timely resolution of cases such as this.
[23] I adopt these portions of my recent decision in a very different case:
[62] Clearly Justice Perell confirmed his view that the intent of the rule changes was “to ‘improve access to justice by reducing the inequities, cost, delay, and complexity of civil litigation.” Similarly in Abrams v. Abrams, 2010 ONSC 2703, Justice D.M. Brown, observed: ‘Proportionality signals that the old ways of litigating must give way to new ways which better achieve the general principle of securing the ‘just, most expeditious and least expensive determination of every proceeding on its merits.
[63] In Hryniak v. Mauldin, 2014 SCC 7, Justice Karakatsanis was discussing the test for summary judgment, but what she had to say is thematically applicable to the development and settling of a discovery plan. At paragraphs 27 and 28 of her judgment for the Supreme Court of Canada, she stated:
There is growing support for alternative adjudication of disputes and a developing consensus that the traditional balance struck by extensive pretrial process and the conventional trial no longer reflects the modern reality and needs to be re-adjusted. A proper balance requires simplified and proportionate procedures for adjudication, and impacts the role of counsel and judges. This balance must recognize that a process can be fair and just, without the expense and delay of a trial, and that alternative models of adjudication are no less legitimate than the conventional trial.
This requires a shift in culture. The principal goal remains the same: a fair process that results in a just adjudication of disputes. A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible – proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure.
[24] Master Sandler helped establish the law in this area as referred to in RCP Inc.
RCP Inc. v. Wilding, 2002 CarswellOnt 2275 2002 CarswellOnt 2275, [2002] O.J. No. 2752, 115 A.C.W.S. (3d) 33
9 Bow Helicopters v. Textron Canada Ltd. (1981), 23 C.P.C. 212 (Ont. Master) is often cited for the proposition that it is inappropriate to make an order for a further and better affidavit of documents based on evidence of documents which should or must exist. That is the result in Bow Helicopters and in the case the usual practice of proceeding to discovery and asking the question about the existence of documents before bringing such a motion was endorsed. Bow Helicopters was decided under the “old rules” but was cited with approval by Henry J. in Greymac Trust Co. v. Burnett (1987), 59 O.R. (2d) 50 (Ont. H.C.) Read carefully, however, those cases really stand for the proposition that there must be evidence that documents have been withheld before an order under Rule 30.06 is appropriate and “speculation, intuition or guesswork are insufficient”. They do not stand for the proposition that the only appropriate procedure in every case is to commence discovery and then to move for further production after obtaining admissions.
[25] I conclude that there is too much uncertainty and/or delay as to the value of the documents requested.
[26] Obviously all my decisions are subject to the guidance of the Justice hearing the summary judgment motion.
[27] I did not address the relief sought with respect to an examination for discovery of a plaintiff which was sought as the Notice of Motion was unclear as to the type of examination and the specific party sought to be examined. However it seems likely that there will be cross examinations as part of the lead-up to the summary judgment motion and I assess the parties can work out a basis for those transcripts at least being part of, or taking the place of, examinations for discovery should the matter not be resolved at the summary judgment motion.
Disposition:
- The motion for further and better affidavit of documents is dismissed.
- The discovery motion is adjourned to the Motion judge if necessary.
- Costs were sought. The moving party was largely unsuccessful. Costs payable forthwith by the Defendant to the Plaintiffs in the amount of $4,250, all in.
[Note: The original handwritten reasons included extracts “cut out” and inserted at various points. The format of these typed reasons reflects that process.]
DS/ R.176 Master Donald E. Short
Schedule “B” Legislation
Right of claimant against insurer where execution against insured returned unsatisfied
(1) Where a person incurs a liability for injury or damage to the person or property of another, and is insured against such liability, and fails to satisfy a judgment awarding damages against the person in respect of the person’s liability, and an execution against the person in respect thereof is returned unsatisfied, the person entitled to the damages may recover by action against the insurer the amount of the judgment up to the face value of the policy, but subject to the same equities as the insurer would have if the judgment had been satisfied.
Rules of Civil Procedure, RRO 1990, Reg 194, R.R.O. 1990, Reg. 194, r. 31.10.
DISCOVERY OF NON-PARTIES WITH LEAVE
General
31.10 (1) The court may grant leave, on such terms respecting costs and other matters as are just, to examine for discovery any person who there is reason to believe has information relevant to a material issue in the action, other than an expert engaged by or on behalf of a party in preparation for contemplated or pending litigation. R.R.O. 1990, Reg. 194, r. 31.10 (1).
Test for Granting Leave
(2) An order under subrule (1) shall not be made unless the court is satisfied that,
(a) the moving party has been unable to obtain the information from other persons whom the moving party is entitled to examine for discovery, or from the person the party seeks to examine;
(b) it would be unfair to require the moving party to proceed to trial without having the opportunity of examining the person; and
(c) the examination will not,
(i) unduly delay the commencement of the trial of the action,
(ii) entail unreasonable expense for other parties, or
(iii) result in unfairness to the person the moving party seeks to examine. R.R.O. 1990, Reg. 194, r. 31.10 (2).