COURT FILE NO.: CV-17-567018
MOTION HEARD: 20171213
REASONS RELEASED: 20180605
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
MARIETTA TASCON
Plaintiff
- and-
XINGYU WANG, WITH CAR RENTAL ULC and
CERTAS DIRECT INSURANCE COMPANY
Defendants
BEFORE: MASTER D. E. SHORT
COUNSEL: Albert Wong Fax: 416-223-7003
-counsel for the Moving Party, plaintiff
Debbie Orth Fax: 613-749-4703
-counsel for the Responding Proposed defendant
Kevin Eng Fax: 416-408-4806
-counsel for defendant WTH Car Rental ULC
REASONS RELEASED: June 5, 2018
Reasons for Judgment
I. Background
[1] On or about January 2, 2015, the Plaintiff was involved in a motor vehicle accident. Within days of the accident, on or about January 20, 2015, the Plaintiff retained her present counsel to act on her accident claims.
[2] Counsel’s overview outlines that the vehicle driven by the existing defendant, Xingyu Wang (“Wang”) was a rental vehicle owned by the company commonly known as Avis, which was rented in Mississauga. That vehicle, at all material times, had been rented for employment purposes. The car rental agreement was in the name of Tin Sung Kwok ("Kwok") the party whom the Plaintiff seeks to add to this action.
[3] Now, more than two years after the accident, plaintiff’s counsel brings this motion for a range of items. In particular, the plaintiff seeks:
An Order to add Tin Sung Kwok as a Defendant to the action herein;
An Order to amend the Statement of Claim;
An Order for service of the Amended Statement of Claim by regular mail to the Defendant Wang's last known address in JiangSu, China;
An Order for substituted service of the Amended Statement of Claim upon Wang's insurer, TD Meloche Monnex,
An Order extending the time for service of the Amended Statement of Claim to the Defendants and the proposed Defendant.
[4] This is a somewhat unusual case, in as much as both the driver and the owner of the defendant vehicle are already parties. The individual who rented the vehicle for a one-month period was not in the car at the time of the accident. However, perhaps because of the flow of liability amongst insurers, the question of whether or not the “renter”, in addition to the driver, can be added as a defendant at this stage was contested.
II. Post-Accident Investigation
[5] The factum filed on behalf of the plaintiff notes that a Motor Vehicle Collision Report from Peel Regional Police was obtained which listed the Defendant Xingyu Wang as one of the drivers in the Accident, and indicated the plate number of his vehicle to be "BVPC063" and that the owner of his vehicle to be Aviscar Rental ( a.k.a. the Defendant, WTH Car Rental ULC).
[6] However, it was subsequently discovered that a separate Self Reporting Collision Report of the same accident listed the Defendant Xingyu Wang as one of the drivers in the Accident and the plate number of his vehicle as "BVCP063". (my emphasis added)
[7] Shortly after the accident, on March 11, 2015, the Plaintiff lawyers' office sent a letter to Aviscar Rental (requesting identification of the renter's information of the Defendant Xingyu Wang's vehicle.
[8] The plaintiff’s factum asserts:
“12. Based on the information from the Motor Vehicle Collision Report, a motor vehicle & VIN search was carried out on Ontario license plate number BVPC063 on or about November 9, 2016 under the reasonable presumption that the Motor Vehicle Collision Report was more reliable than the Self-Reporting Collision Report as the Motor Vehicle Collision Report was completed by a police officer upon investigation.
A Motor Vehicle & VIN Search Report indicated that at all material times, the registered owner of Ontario license plate number BVPC063 is Sharon Anne Wade.
Given the information we received, a Statement of Claim was issued on December 22, 2016 (CV-16-566583) against the Defendants Xingyu Wang, Sharon Anne Wade, Aviscar Inc. and Certas Direct Insurance Company.”
[9] That claim, which was issued just before the second anniversary of the January 2, 2015 accident, resulted in the plaintiff’s counsel being advised by a Claims advisor from State Farm, on or about January 3, 2017, that Sharon Anne Wade was not involved in the subject motor vehicle accident.
[10] The Plaintiff’s factum then asserts:
“16. Given this new information, further investigation confirmed that there was a discrepancy of the plate number of the Defendant Xingyu Wang's vehicle as listed in the Motor Vehicle Collision Report and in the Self-Reporting Collision Report. Both reports did not contain information of the proposed Defendant Tin Sung Kwok as the renter of the Defendant Xingyu Wang's vehicle.
- Subsequently, a second Statement of Claim was issued on January 3, 2017 (CV-17- 567018) to include the Defendant WTH Car Rental ULC.” (my emphasis)
[11] I note in passing that January 1st fell on a Sunday in 2017 and the court offices were thus closed on Monday, January 2, 2017, the second anniversary of the Accident.
[12] Apparently, almost 2 years after the initial request, on or about March 1, 2017, counsel for the Defendant WTH Car Rental ULC provided the rental agreement details to the Plaintiff lawyers' office. Details of the rental agreement revealed that Tin Sung Kwok was the renter of the Defendant Xingyu Wang's vehicle.
[13] Counsel asserts that the Plaintiff moved to add Tin Sung Kwok to this action as soon as the identity of that party became available.
III. Insurance Liability Issues
[14] By way of a brief sidebar. I wish to set out in nature of the interrelation between the various insurers of the driver, the renter, and the vehicle owner.
[15] Justice Firestone had occasion to address these issues in his 2014 decision in Elias v. Koochek, 2014 ONSC 5003, 122 O.R. (3d) 360; 2014 ONSC 5003.
[16] In that case, the plaintiffs were suing owner and driver of at-fault rental car but not suing “renter”. The owner brought a third party claim against renter for contribution and indemnity.
[17] His honor held that the vehicle owner’s insurer was required to respond first to plaintiff's claim. In particular, the headnote comments:
Legislative intent to make renter's policy first to respond subverted by interpretation of s. 277(1.1) of Insurance Act which makes "availability" of renter's policy dependent on whether plaintiff names renter as defendant.
The plaintiffs were injured in a motor vehicle accident which occurred while they were passengers in a rented car. They sued the owner and driver of the car, but did not add the renter as a defendant. The owner brought a third party claim against the renter for contribution and indemnity. The renter's insurer took the position that the renter's policy was only "available" as that term is used in s. 277(1.1) of the Insurance Act when the plaintiff has sued the renter directly for damages. The owner's insurer brought a motion to determine which insurer was required to respond first to the plaintiff's claim.
[18] The headnote( with my emphasis) continues:
Held, the motion should be granted in favour of the owner's insurer.
The renter's insurer was required to respond first. The amendments to the OAP 1, the Highway Traffic Act, R.S.O. 1990, c. H.8, and the Insurance Act in 2006 and 2007 were intended to make renters liable for damages sustained by reason of negligence in the operation of a rented vehicle and to relieve the insurer of the owner of the rented vehicle from being the first-loss insurer where other insurance is available to the renter or the driver of the rented vehicle. The legislative intent to make the renter's policy the first to respond would be subverted by an interpretation of s. 277(1.1) of the Insurance Act which makes the "availability" of a renter's policy dependent on whether the plaintiff has named the renter as a defendant.
Enterprise Rent-a-Car Canada Ltd. v. Meloche Monnex Financial Services Inc. (2010), 102 O.R. (3d) 87, [2010] O.J. No. 1498, 2010 ONCA 277, 93 M.V.R. (5th) 15, 261 O.A.C. 7, [2010] I.L.R. I-4971, 319 D.L.R. (4th) 176, apld
IV. Due Diligence and Discoverability
[19] Section 4 of the Limitations Act, 2002 provides:
Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
[20] The discoverability principle provides that a cause of action arises, for the purpose of a limitation period, when the material facts on which it is based have been discovered, or ought to have been discovered, by the exercise of due diligence. This includes the identity of the tortfeasor as well as the acts or omissions identifying him as such.
[21] Relying upon Wong v. Adler, 2004 8228 (ON SC), [2004] O.J. No. 1575 (Ont. Master), aff'd 2004 73251 (ON SCDC), [2005] O.J. No. 1400 (Div. Ct.), para. 45 and Barker v. Kennedy Bingo, [2011] O.J. No. 3826 (S.C.J.), para. 13, plaintiff’s counsel asserts:
Where a Plaintiff wishes to plead that the limitation period has not yet expired because she did not know of and could not with due diligence have discovered the existence of the defendant, the motions court must examine the evidentiary records before it determines if there is an issue of fact or credibility on the discoverability allegation.
If the court determines that there is such an issue, the defendant should be added with leave to plead a limitations defence. (my emphasis)
[22] In particular, it is argued that if the Plaintiff puts in evidence to demonstrate that steps have been taken to ascertain the identity of the tortfeasors and gives a reasonable explanation as to why such information was not obtainable with due diligence:
“…the motions court will end its inquiry and typically add the defendant with leave to plead a limitation defence. This is not a high threshold.
Wakelin v. Gourley, 2005 23123 (ON SC), [2005] O.J. No. 2746 (Ont. Master) aff'd [2006] O.J. No. 1442 (Div. Ct.), paras. 14-15 ”
[23] The Plaintiff submits that she has met this threshold as her counsel had taken multiple steps in an attempt to identify , the proposed defendant, Kwok. They assert that the existence and identity of a proposed defendant “renter” was not previously obtainable with “due diligence”.
[24] The Limitations Act, 2002 provides with regard to discoverability:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). (my emphasis)
[25] How a “renter”, who was not present at the time of the accident, falls within these criteria of acts or omissions is somewhat unclear to me. The application of the remaining provisions of this section provide limited further guidance
Presumption
(2) A person with a claim shall be presumed to have known of the matters ref erred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. Adding party
21 (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.
V. Degree of Diligence?
[26] Plaintiff’s counsel asserts that their office forwarded correspondence on three occasions to Avis Car Rental and received no response “until the presumptive statute of limitations had already elapsed.”
[27] I am satisfied that the guidance of the Court of Appeal is clear that there is no availability to this court to extend time periods on the basis of “Special Circumstances”.
[28] Prior to the enactment of the Act in 2002, the common law doctrine of special circumstances gave a court the discretion to extend the limitation period under certain circumstances. In 2008, the Ontario Court of Appeal, in the companion cases of Joseph v Paramount Canada's Wonderland [2008 ONCA 469] and Meady v Greyhound Canada Transportation Corp. [2008 ONCA 468], ruled that the doctrine of special circumstances is no longer applicable, and the court does not have discretion to extend a limitation period and allow the addition of a party to a claim after the expiry of the limitation period.
[29] Thus the Legislature has enacted relatively firm deadlines for the commencement of civil actions. It is only where information was not available on a timely basis that the courts have some discretion to extend the time for commencing an action beyond the statutory two-year period.
[30] I am satisfied that the Plaintiff lawyers' office contacted Aviscar Rental (a.k.a. the Defendant WTH Car Rental ULC) on at least two occasions, prior to the expiration of the limitation period asking them to turnover the renter's information of the Wang's vehicle without success.
[31] I realize that further attempts might have enabled the plaintiff to identify the renter of Defendant Xingyu Wang's vehicle before limitation expired. However, there was no clear evidence that in fact, the renter was different than the driver as the rental company were not responding to requests to clarify the situation .
[32] The weighing of the reasonableness of the efforts made ought not to result in a denial of the plaintiffs claim. I believe this is particularly the case, or would seem to be no prejudice to the “renter” with respect to available evidence, or knowledge regarding the accident,as he was not there
VI. Proposed Defendant’s Position
[33] The existing individual defendant Wang’s counsel did not take part motion. Counsel appearing for the proposed defendant argued that it was inappropriate for him to be added at this stage. In particular, the counsel for the proposed defendant examined the issue of whether Plaintiff established that due diligence was done in order to reasonably discover the potential parties to the claim within the requisite limitation period.
[34] The proposed defendant’s factum asserts the following with respect to the efforts made by the plaintiff’s counsel:
“6. A letter dated March 11, 2015 was sent by Plaintiff counsel to Wang putting him on notice of the claim and requested that he advise whether the vehicle was rented and to whom the vehicle was rented.
A letter dated March 11, 2015 was sent by Plaintiff counsel to Avis requesting information relating to the parties involved, including a specific request to identify the name on the rental agreement.
A copy of the rental agreement appears to have been printed on March 11, 2015 which reflects the particulars of who rented the car and the specific plate number.
[35] However, there was no evidence before me that the rental agreement was ever sent anywhere, at any material time.
[36] The factum notes:
“25. On December 19, 2016, the Plaintiff sent another letter to Avis Car Rental requesting information regarding the rental agreement and/ or rental details.
- On January 3, 2017, the day the limitation period expired, the Plaintiff sent another letter to Avis Car Rental Company requesting Avis Car Rental to "confirm policy coverage" and advising that BVPC063 was the incorrect License Plate Number and, in fact, the correct License Plate Number was BVCP063.”
“11. On January 3, 2017, the two-year anniversary of the Accident, the Plaintiff commenced an action in Toronto against Wang, and Avis and does not name the renter either as John/Jane Doe nor his specific name.
- By way of a Notice of Motion filed on May 5, 2017, the Plaintiff seeks to add Defendant Kwok as a party to the claim.”
The Respondent/Proposed Defendant, Kwok was at the time of the accident and continues to date, to be a resident of Richmond, British Columbia, and was the person whose name was on the rental agreement for the Avis rental car which was involved in the Accident.”
[37] As well it is asserted:
At the time of the Accident, the driver of the rental vehicle, Defendant Wang had a valid motor vehicle insurance policy with TD Insurance. The insurer has confirmed that there are no coverage issues with respect to this loss.
[38] Further submissions are made with respect to the nature of the search of the license plate number, undertook by plaintiff’s counsel.
Twenty months after the first letter to Avis Car Rental and less than two months before the limitation period expired, on November 9, 2016, the Plaintiff Firm conducted a motor vehicle and VIN search using the incorrect License Plate Number BVPC063, which was contained on Motor Vehicle Accident Report. The search indicated that the registered owner of the vehicle bearing this license plate was Sharon Anne Wade.
The Plaintiff provided no evidence of any steps taken in the intervening twenty months.
The Plaintiff provides no evidence that a motor vehicle and VIN search was conducted for the correct License Plate Number, BVCP063.
[39] Counsel for the resisting proposed defendant provides these further elements of activity following the expiry the initial two year period :
On January 13, 2017, counsel for Avis Car Rental, Mr. Michael Lax ("Avis's Counsel"), wrote a letter to the Plaintiff Firm advising of his retainer requesting copies of all communications between Plaintiff Firm and Avis Car Rental.
On March 1, 2017, Avis' Counsel wrote to Plaintiff Firm referring to a telephone conversation between them on the same date, Avis' Counsel confirmed that the only error in regards to the confusion of the license plates is "contained in the Motor Vehicle Accident Report". Further, that the correct License Plate Number is BVCP063, which is "consistent with your earlier assumption". The letter was received on March 2, 2017.
Avis' Counsel's March 1 letter to Plaintiff Firm enclosed the Rental Agreement between Avis Car Rental and the Proposed Defendant confirming that Mr. Kwok was listed as the renter for the Defendant Vehicle bearing License Plate Number BVCP063 from December 1, 2014 to January 3, 2015.
Counsel wrote to the Proposed Defendant advising him notifying Mr. Kwok that he will "shortly be added to the action" and urging him to contact his insurer. Avis' counsel also wrote to the Proposed Defendant's insurer, Insurance Corporation of British Columbia ("ICBC") on the same date, advising them of the Accident and Plaintiff's claim.
On March 1, 2017, Avis's Counsel sent a letter to ICBC advising that he is counsel for Avis and enclosing the Statement of Claim
Prior to receipt of Avis' counsel's letter, ICBC had no knowledge of the Accident or this Action.
On April 27, 2017, Plaintiff Firm sent a letter to ICBC advising of their intention to add Mr. Kwok to the Action. This was the first communication received by ICBC from the Plaintiff Firm
The Notice of Motion to add the Proposed Defendant was filed May 5, 2017, four months after the limitation period expired.
VII. Caselaw
[40] My former colleague Master Dash addressed similar issues regarding due diligence in his decision in Wakelin v Gourley, 2005 23123 (ON SC), 2005 Carswell Ont 2808, aff'd, 2006 Carswell Ont 286 (Div Court). There he provided guidance on weighing the evidence of the Plaintiff and Proposed Defendant:
“If the Plaintiff puts in evidence of steps taken but the proposed defendant also provides evidence of reasonable steps the plaintiff could have taken to ascertain the information within the limitation period then the court will have to consider whether the plaintiffs explanation clearly does not amount to due diligence.”
[41] Master Dash concluded that, on the facts of that case that the Plaintiff failed to meet even the requisite low threshold. Particularly, waiting 7.5 months after the initial interview and 3.5 months before the limitation period expired to first request a police report “cannot come close to due diligence”. The limitation period was found to be expired.
[42] His decisionemphasizes that a court “cannot act as little more than a rubber stamp rectifying solicitor's negligence or inadvertence under the guise of discoverability”
[43] In the present case, resisting counsel asserts
A reasonable person would have, at minimum, done the following:
a. Conduct a motor vehicle search and VIN search using both License Plate Numbers;
b. Write to Avis with reference to both License Plate Numbers and followed up with a telephone call, if necessary to obtain the information regarding the identity of the renter;
c. Taken steps to obtain the requisite information within a month or so of obtaining the Motor Vehicle Accident Reports;
d. Not failed to take any steps for a period of 21 months;
e. Would have recognized the inconsistencies regarding ownership upon receiving the results of the search and taken steps to clarify;
f. Provide notice of the accident and potential litigation to all involved parties in compliance with the Insurance Act, R.S.O. c. I.8 as amended; and
g. Would have preserved the plaintiffs right of action against the renter by pleading his or her as Jane or John Doe and making the necessary allegations within the pleading.
[44] Subsequent the Master Dash’s decision, I considered similar issues, in Mercurio v. Smith, [2011] O.J. No. 5040;2011 ONSC 3904. In Mercurio, there were two differing police reports with respect to the same multi-car accident. Counsel was not aware of the existence of the second report until after the limitation period has expired.
[45] In my reasons I referred to the decision of the Court of Appeal in Velasco v. North York Chevrolet Oldsmobile Ltd.; 2011 ONCA 522, [2011] O.J. No. 3314; 2011 ONCA 522; 106 O.R. (3d) 332:
65 Velasco was an appeal by the plaintiff from an order granting summary judgment, 2011 ONSC 85, [2011] O.J. No. 120, dismissing the action as statute-barred. The appellant commenced an action in 2006 for injuries suffered in a motor vehicle accident when her vehicle was struck by two other vehicles (that may have been racing) driven by D and C in 2005. D's insurer pleaded that D was the owner of the vehicle driven by. In 2007, the appellant's counsel received a 732 page Crown brief which revealed that the respondent defendants, not D, were the owners of the D vehicle. The law clerk reviewing the brief did not notice the ownership of the D vehicle. The true ownership of the vehicle did not come to counsel's attention until 2009 when the appellant issued a new statement of claim against the respondents on the basis of their ownership of the D vehicle. The motion judge held that the appellant's counsel should not have closed their minds to the issue of ownership of the D vehicle based on the police report and the admission from D's insurer and should have reviewed the Crown brief promptly upon its receipt with a view to determining the ownership issue.
66 In allowing the appeal Justices D.H. Doherty, J.I. Laskin and J.M. Simmons JJ.A., held it was unreasonable for the motion judge to conclude that the appellant's counsel should have treated the ownership issue as a live issue upon receiving the Crown brief. They held that counsel for the appellant acted with reasonable diligence in continuing to rely on that information until contrary information actually came to their attention.
67 The reasons of the Court, in particular, observe:
5 On a motion for summary judgment to dismiss the action against the respondents because of the expiry of the relevant limitation period, the motion judge said he could not conclude that counsel failed to exercise reasonable diligence in this case prior to receipt of the Crown brief given the combined information in the police report and the Royal and Sun Alliance pleading. However, the motion judge went on to hold that appellants' counsel should not have closed their minds to the issue of ownership of the Denyer vehicle based on that information and should have reviewed the Crown brief promptly upon its receipt with a view to determining the ownership issue.
6 It is not disputed that appellants' counsel did not actually know that the respondents were the owners of the Denyer vehicle until January 2009.
7 However under s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, a limitation period begins to run on the date a claim is discovered. And under s.s. 5(1) of the Act, a claim “is discovered on the earlier of, (a) the day the person with the claim discovers [among other things, that the act or omission that caused injury, loss or damage was that of the person against whom the claim is made], and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim ought to have known of the matters referred to in clause [5(1)a]”.
8 Accordingly, the issue for the motion judge was whether the solicitors for the appellants “ought to have known” that the respondents were the owners of the Denyer vehicle shortly after they received the Crown brief.
9 In our view, having regard to the combination of information appellant's counsel had indicating that Denyer was the owner of the Denyer vehicle, it was unreasonable for the motion judge to conclude that appellants' counsel should have treated the ownership issue as a live issue upon receiving the Crown brief. That combination of information led the motion judge to conclude that appellants' counsel acted with reasonable diligence prior to receiving the Crown brief. In our opinion, counsel for the appellants acted with reasonable diligence in continuing to rely on that information until contrary information actually came to their attention. [my emphasis]
[46] There, as here, the matter before me was not a motion for summary judgment but the consequences of my refusal to add these defendants will have the same effect for the plaintiff's claims.
[47] Here I come to the same conclusion as I reached in Mercurio:
69 Here I believe counsel acted with reasonable diligence in continuing to rely on the first police report until contrary information in the form of the Second Report actually came to their attention
70 In my opinion, while it might have been possible to ascertain the identity of the proposed defendants to do so would have required extraordinary diligence, beyond what I would regard as "due " diligence in these circumstances.
[48] While it is a close call, I am satisfied that counsel acted with reasonable diligence in the circumstances, particularly as they were not responsible for the failure of the rental company to produce the requested information, which would have, then enable them to include all the appropriate parties within the limitation period.
VIII. Service Issues
[49] At the time of the argument, the motion, counsel asserted that “Kwok was, at the time of the Accident and continues to be, a resident of British Columbia.”
[50] If he does, in fact, “reside” in Canada the issues with regard to foreign service of the statement of claim and the impact of rule 17.05 relating to service, falling under the Hague Convention will become moot.
[51] I am therefore extending the time for service upon all defendants until 30 days following the issuance of an amended statement of claim
IX. Disposition
[52] Leave is therefore granted to amend the Statement of Claim to add as defendant Tin Sung Kwok at this time. This order is made without prejudice to any limitation defences available to him.
[53] In order to expedite matters, I am authorizing service upon him may be made by service on counsel appearing before me on his behalf.
[54] The parties added shall deliver their defences within 30 days of being served with the Amended Statement of Claim.
[55] While costs usually follow the event, the plaintiff is clearly seeking an indulgence and I do not think that it is unreasonable to put the party seeking to add a defendant, to the proof of the extent of the diligence undertaken.
[56] In the result, there will be no order as to costs in favour of any party.
Master D. E. Short
Released: June 5, 2018
DS/ R225