Court File and Parties

COURT FILE NO.: CV-013-475810 DATE: 20170613 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Christopher Hoang, a Minor by his Litigation Guardian, San Trieu, and San Trieu, personally Plaintiffs – and – The Personal Insurance Company of Canada Defendant

Counsel: Geoffrey Adair and Jeffrey Hernaez, for the Plaintiffs Wayne Morris and Terry Liu, for the Defendant

HEARD: April 26, 2017

E.M. Morgan, J.

I. The insurance coverage issue

[1] The Plaintiff, Christopher Hoang, was 6 years old when he was hit by a car while crossing the intersection of Yonge Street and Queens Quay. He had just been dropped off by his father, Can Hoang, who was about to drive away to find parking.

[2] Acting through his mother, San Trieu, as litigation guardian, Christopher sued Mr. Hoang for negligence. A jury awarded him $854,228.22 in damages and pre-judgment interest thereon, plus $899,750 in costs. It also awarded Ms. Trieu $20,000 under the Family Law Act. An appeal of the jury awards was dismissed by the Ontario Court of Appeal on October 5, 2016.

[3] Mr. Hoang was represented in the underlying trial by counsel appointed and instructed by his motor vehicle liability insurer, the Defendant. Although the Defendant thus acknowledged its duty to defend Mr. Hoang, it has denied coverage of his liability to Christopher and Ms. Trieu. They, in turn, have brought this action under section 258(1) of the Insurance Act directly against the Defendant to have the insurance money payable under Mr. Hoang’s motor vehicle policy applied toward satisfaction of the judgment.

[4] Christopher and Ms. Trieu bring summary judgment under Rule 20 of the Rules of Civil Procedure seeking an Order requiring the Defendant to pay the amounts the jury has awarded to each of them, plus applicable interest; or, in the alternative, an Order requiring the Defendant to pay the amount awarded to Christopher in costs regardless of whether the Defendant is liable for payment of the amounts awarded to Christopher and Ms. Trieu in damages.

[5] For its part, the Defendant has brought a simultaneous motion denying any liability to cover Mr. Hoang’s liability to Christopher and Ms. Trieu, and seeks summary judgment dismissing their claim.

II. The accident and the jury verdict

[6] On August 6, 2004, Mr. Hoang drove his Toyota with his two children, his niece and his nephew from Scarborough to downtown Toronto for a planned outing to Centre Island. Mr. Hoang’s nephew, Danny, was the eldest of the children and was 13 years old, and Christopher was the youngest. Mr. Hoang’s niece, Michelle, was 11 years old and his daughter, Danielle, was 10 years old. Mr. Hoang dropped the children off at the intersection of Yonge Street and Queens Quay and planned to go find someplace to park his car.

[7] Upon letting the children out of the car, Mr. Hoang got a stroller and a bag of extra clothes for them and told them to first cross Yonge Street and then Queens Quay, and to wait for him near the Centre Island ferry dock. He then got back into his car as the children started across Yonge Street on the pedestrian crosswalk on the north side of Queens Quay. The three older children were walking in front and Christopher was walking alone a few feet behind them. Mr. Hoang stayed in his car for a few minutes to watch them cross the street.

[8] Just as Christopher reached the approximate mid-point across Yonge Street, a gust of wind blew his cap off his head. Unfortunately, Christopher did what children will do if no one is holding them back, and ran out into the middle of the intersection to fetch his hat. He was hit by a vehicle travelling westbound in the center lane of Queens Quay Blvd. Christopher sustained numerous injuries in the accident, including a severe brain injury.

[9] The ensuing litigation concluded with a jury verdict on March 9, 2012. The jury found no negligence on the part of the driver of the car that struck Christopher. It found, however, that Mr. Hoang’s negligence caused or contributed to the collision and to Christopher’s consequent injuries. Specifically, the jury listed the particulars of Mr. Hoang’s negligence as follows:

• Unsuitable choice of unloading area
• Did not ensure proper supervision of Christopher
• Given the circumstances, should not have entrusted safety of group of children to a 12 year old
• Lack of clear safety instructions to all children, especially Danny as he was entrusted with Christopher’s safety
• Did not take sufficient measures to ensure Christopher’s safety by confirming Danny was holding Christopher by the hand when walking as Christopher was not trained in road safety or by placing Christopher in Stroller

[10] The motor vehicle liability policy purchased by Mr. Hoang insured against liability imposed upon him by law and arising out of the use or operation of his 1996 Toyota bearing Ontario license plate 247 JMN, up to the policy limit of $1,000,000. In accordance with section 239(1)(a) of the Insurance Act, the insurance policy covered Mr. Hoang against liability “arising from the ownership or directly or indirectly from the use or operation of any such automobile”.

[11] Further, in the insurance policy issued to Mr. Hoang, the Defendant, as insurer, covenanted as follows:

If someone sues you or other insured persons insured by this Section for losses suffered in an automobile incident, we will provide a defence and cover the costs of that defence, including investigation costs. We will pay all legal costs the court assesses against you and other insured persons in the lawsuit we have defended.

[12] Counsel for the Defendant submits that the jury award leaves it unclear as to whether the Mr. Hoang’s negligence arose directly or indirectly from the use or operation of his automobile. It is the Defendant’s position that the collision entailed the “mere presence” or “incidental use” of Mr. Hoang’s automobile, but that there is no direct causation between any negligence by Mr. Hoang and Christopher’s injury. The Defendant has therefore denied coverage for this claim.

III. Scope of the insurer’s liability

[13] Over the years a number of courts, including the Supreme Court of Canada, have addressed the question of whether an insured’s negligence in using or operating a motor vehicle ‘caused’ – in its recognized legal sense – the injuries sustained by the victim.

[14] In Citadel General Assurance Co. v Vytlingam, 2007 SCC 46, [2007] 3 SCR 373, at para 12, the Supreme Court indicated that one must ask whether “the chain of causation linking the claimed loss or injuries to the use and operation of the motor vehicle, which is shown to be more than simply fortuitous or ‘but for’, is unbroken.” Thus, if there is an intervening cause of the injury, such as where the chain of causation originating with the insured’s use of the automobile is severed by another person’s intervening negligence, there is no obligation of coverage: Law Union & Rock Insurance Co. v Moore’s Taxi Ltd., [1960] SCR 80, 85.

[15] Counsel for the Defendant stresses that not only was the wind blowing Christopher’s hat an intervening cause, but Mr. Hoang’s use of his automobile was merely incidental to the injury by Christopher. He submits that it is akin to cases where non-driving negligence occurs, and causes injury, after the tortfeasor was driven to the site of the incident. Citing Alchimowicz v Continental Insurance Co. (1996), 37 CCLI (2d) 284, at para 9 (Ont CA), he contends that, “…it must be remembered that this is automobile legislation.” It is not enough that by chance the parties arrived at the tort site by car.

[16] By way of illustration, in Herbison v Lumbermens Mutual Casualty Co., 2007 SCC 47, [2007] 3 SCR 393, an insured motorist thought he saw a deer, retrieved his rifle from his automobile and then negligently shot the plaintiff. Closer to the facts at hand, in Kopas v Western Assurance Co. (2009), 67 CCLI (4th) 75, at paras 19-20 (SCJ) parents dropped a young boy off in a parking lot but failed to supervise him as he walked across the lot and was hit by another motor vehicle. Corbett, J. observed that, “There was nothing negligent about the way in which the car was being unloaded… [The child] was then safely ‘landed’ from the car.” In each instance, the insured’s motor vehicle was at most a means of arriving at the scene of the injury, but was causally unconnected to the injury itself.

[17] By contrast, in Lefor v McClure, [2000] OJ No 2244, a mother parked her car at an inherently dangerous spot and got out of the car with her children. Although she supervised her children crossing the street and even held their hand, the car was running and the stop at that particular location was inherently dangerous. Sharp JA held that there was a “clear nexus” between the mother’s use of vehicle and the child’s injury while crossing the street. As the jury put it in the present case, the parent’s negligence was the “unsuitable choice of unloading area”. The injured child was never safely ‘landed’ from the car, and there was no severance of causation, as the unloading of the child was itself tortious conduct on the parent’s part.

[18] In Amos v Insurance Corporation of B.C., [1995] 3 SCR 405, the Plaintiff was shot when the insured driver stopped his car at a dangerous location. In addressing the coverage issue, the Supreme Court answered the very question posed by the Defendant’s position here: “The appellant's vehicle was not merely the situs of the shooting…. It is not important whether the shooting was accidental or deliberate while entry to the vehicle was being attempted. It is important that the shooting was not random but a shooting that arose out of the appellant's ownership, use and operation of his vehicle”: Ibid, at para 25.

[19] At this stage of the proceedings, it is not open to the Defendant to re-litigate the underlying action or to question the jury’s particularization of Mr. Hoang’s negligence. Having appealed the jury award and lost, the jury’s holdings are final and binding on the Defendant. The Ontario Court of Appeal has held that an insurance company that defended the initial action is a “privity” of that action. It cannot re-litigate what it already took to trial: Ernst & Young Inc v Chartis Insurance Co., 2014 ONCA 78, at para 26. The question here is not whether the judgment in the underlying trial was correct; rather, the judgment in the underlying trial is the best evidence in the subsequent coverage application: Global General Insurance v Finlay, [1961] SCR 539.

[20] The jury in the instant case found that Mr. Hoang was negligent and that his negligence was a cause of Christopher’s injury; and when it particularized Mr. Hoang’s negligence, it specified the unsafe unloading of Christopher at a busy intersection. In so identifying the nature of Mr. Hoang’s negligence, the jury made it clear that the fault lies with his use and operation of his motor vehicle. It was not Mr. Hoang’s poor parenting that the jury found to be the cause of Christopher’s injuries; it was his poor choice of unloading area, or, to put it another way, his poor driving that created the risk and that caused Christopher’s injuries.

IV. The trial costs

[21] Having determined that the Defendant is liable for coverage of the damages award against Mr. Hoang, it follows that the Defendant is also liable for the costs award that accompanied the jury trial. However, counsel put considerable effort into researching and advocating out their respective positions, and so I will take the opportunity to set out my own brief observations.

[22] It is obvious that the Defendant had a duty to defend Mr. Hoang, as the pleadings in the underlying action clearly alleged negligence in the use or operation of a motor vehicle: Nichols v American Home Assurance Co., [1990] 1 SCR 801. Indeed, the fact that the Defendant did in fact defend Mr. Hoang at trial indicates that this observation is uncontroversial.

[23] As indicated above, the insurance policy provides that the Defendant “will pay all legal costs the court assesses against [the insured]…in the lawsuit we have defended.” On a plain reading of these words, the Defendant has covenanted to pay the costs ordered against Mr. Hoang at trial, without qualification.

[24] As McLachlin J. observed in Reid Crowther v Simcoe & Erie General Insurance Co., [1993] 1 SCR 252, when interpreting a contract of insurance “ [t]he issue is always what the particular policy dictates.” Any interpretation that deviates from the straightforward provision of the insurance policy by removing the Defendant’s liability to cover costs would defeat its intention. I can do no better than to repeat the words of Estey J. in Consolidated-Bathurst v Mutual Boiler, [1980] 1 SCR 888, 901: “courts should be loath to support a construction which would…enable the insurer to pocket the premium without risk” – especially risk to which it has specifically contracted.

[25] Accordingly, it is apparent that the Defendant would in any case be liable for the costs award against Mr. Hoang. Its own policy says so specifically, in words that carry no ambiguity.

V. Disposition

[26] Summary judgment is granted in favour of the Plaintiffs.

[27] There shall be an Order that the Defendant pay Christopher $854,228.22 for damages and $899,750 in respect of costs in the underlying action, with applicable pre and post judgment interest on both of those amounts.

[28] There shall also be an Order that the Defendant pay Ms. Trieu $20,000 plus applicable interest on that amount.

[29] Counsel may make written submissions in respect of the costs of this motion. I would ask counsel for the Plaintiffs to provide me with their submissions within one week of this judgment, and counsel for the Defendants to provide me with their responding submissions within one week of receiving the Plaintiffs’ submissions.

Released: June 13, 2017 Morgan, J.