ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-2372-00 DATE: 20190213

B E T W E E N:

HASSAN ID, Plaintiff

Vic Purewal, for the Plaintiff

• and -

HASSAN ADAN, MAHAMUD ABDIKAD AHMED and UNIFUND ASSURANCE COMPANY, Defendants

Andrew Lee, for the Defendant Unifund Assurance Company

HEARD: January 10, 2019, at Brampton

REASONS FOR JUDGMENT

F. Dawson J.

[1] On the eve of trial the defendant, Unifund Assurance Company (Unifund), brought a motion for judgment pursuant to Rule 20 for an order dismissing the plaintiff’s personal injury claim in its entirety. Unifund also moved, pursuant to Rule 21, for an order striking the statement of claim on the ground that it discloses no reasonable cause of action. Unifund’s Rule 20 motion is based on an alleged deemed admission by the plaintiff. The Rule 21 motion is based on the common law principles of res judicata, and in particular, on issue estoppel.

[2] Although the statement of claim in this case was issued on June 5, 2012 these motions were only brought at the last moment when the case was on the “blitz list” in Brampton and about to be called for trial. At the request of the parties I left the case on the trial list when I reserved on the motions. On January 21, 2019 I provided an endorsement dismissing both motions, with reasons to follow. These are my reasons.

[3] After dismissing both motions the case was called for trial the following day. I have since learned that the trial was adjourned. That development had not occurred when I reached the decision reflected in the reasons which follow.

[4] I will deal with the motions in order after setting out some of the background facts. Additional facts will be referred to in my analysis with respect to each motion.

Factual Background

[5] The statement of claim alleges that on June 21, 2010 the plaintiff was a passenger in a 2006 Dodge van which was parked in the parking lot of a shopping mall at 2009 Lawrence Avenue West in the City of Toronto. There is no doubt that the van was struck by a Honda motor vehicle being operated by an unlicensed and uninsured driver. The van was pushed over the sidewalk and into a concrete wall. The plaintiff maintains that he was seriously injured while he was a passenger in the van at the time it was struck.

[6] Unifund insured the Dodge van. The plaintiff claims damages against Unifund pursuant to the uninsured motorist coverage of the insurance policy on the parked van.

[7] The two other defendants, who are associated with the Honda motor vehicle, did not defend the action and have been noted in default.

[8] Unifund has always taken the position that the plaintiff was not in the Dodge van at the time it was struck. It is common ground that if the plaintiff was not in the van at that time he has no claim against Unifund under the uninsured motorist provision of the insurance policy.

[9] Based on its position, Unifund refused to pay statutory accident benefits to the plaintiff. As a result, after mediation failed, the plaintiff elected to proceed to arbitration before the Financial Services Commission of Ontario (FSCO). The critical determination in that arbitration, as in respect of both motions before me, was whether the plaintiff was an occupant of the Dodge van at the time it was struck. Counsel who appeared for the plaintiff on these motions also appeared for the plaintiff at the arbitration.

[10] The evidence before me indicates that five witnesses were called to give viva voce evidence at the FSCO arbitration. The evidence was conflicting. On March 24, 2014 the FSCO arbitrator released a five page decision which held that the plaintiff had failed to establish on a balance of probabilities that he was a passenger in the van at the time of the accident. That decision was appealed to the Office of the Director of Arbitrations. On December 23, 2014 the appeal was dismissed. A 12 page written decision was provided to the parties. No further appeal was taken.

The Rule 20 Motion for Judgment

[11] Pursuant to Rule 20.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 the court is to grant summary judgment if it is satisfied that there is no genuine issue requiring a trial. While the applicant has a responsibility to put forward the evidence it relies upon, so does the responding party. Each party is expected to “put their best foot forward”. There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on the motion. This will be so when the process (1) allows the judge to make the necessary findings of fact; (2) allows the judge to apply the law to the facts; and (3) is a more proportionate, more expeditious and less expensive means to achieve a just result: Hryniak v. Mauldin, 2014 SCC 7. In my view there is no need to make further reference to the much discussed approach developed in Hryniak in order to dispose of this motion.

[12] In order to succeed on this motion Unifund must, in the circumstances of this case, establish that there is evidence which is conclusive, on the civil standard of proof, that the plaintiff was not in the Dodge van at the time it was struck by the Honda. The evidence Unifund relies upon to establish that fact is a deemed admission it claims flows from the plaintiff’s failure to respond to a “request to admit” pursuant to Rule 51.02(1), which it served on the plaintiff on or about April 4, 2018. Unifund puts forward no other basis to support its contention that there is no genuine issue requiring a trial.

[13] It is common ground that a request to admit was served and that the plaintiff failed to file a response. Pursuant to Rule 51.03(2), where a party on whom a request to admit is served fails to respond, that party is deemed to admit the truth of the facts or the authenticity of the documents mentioned in the request to admit. Rule 51.03(3) provides more specific guidance on the nature of the response required to avoid a deemed admission.

[14] The responding plaintiff has not filed any affidavit material asserting that he was in the Dodge van when it was struck. However, his counsel has filed an affidavit from a law clerk which sets out factual circumstances which the plaintiff relies upon to contend that any deemed admission which flows from the request to admit is of limited assistance to the moving party in establishing that he was not in the van at the relevant time. The responding plaintiff submits that the request to admit was inexpertly drafted. He submits it diverges from the facts that must be established by the moving party in such a way that the plaintiff’s failure to respond does not give rise to a deemed admission adequate to support a conclusion that there is no genuine issue requiring a trial.

[15] I turn to the request to admit, the pleadings and to the responding affidavit from the law clerk.

[16] The request to admit, insofar as it is relevant on this motion, asks the plaintiff to admit the truth of the following facts:

1. The plaintiff was not an occupant of the 2006 Dodge Caravan motor vehicle … when it was struck by the 1995 Honda motor vehicle … in the parking lot of the shopping plaza located at 2009 Lawrence Avenue West, Toronto, Ontario ( outside of Unit #18 ) on June 21, 2010. [underlining added]

[17] I have underlined “outside Unit #18” because the responding plaintiff maintains that this factual circumstance is inaccurate. The responding affidavit of Suzy Rossario, a law clerk, asserts that the plaintiff was a passenger in a vehicle that was parked at 2009 Lawrence Avenue West, Toronto “outside of Unit #17”. The motor vehicle accident report prepared by the investigating police officer is Exhibit A to the affidavit. That report contains a diagram and a narrative, both of which show that the Dodge van was parked in front of Unit 17 and that it was pushed into the concrete wall of Unit #17. Importantly, these are also the facts which are specifically pleaded at para. 7 of the statement of claim.

[18] Counsel for the responding plaintiff advised the court that he chose not to respond to the request to admit due to this factual discrepancy between the request to admit and the plaintiff’s claim. He submits that any deemed admission that did result cannot be dispositive because it does not undermine the plaintiff’s claim.

[19] It seems to me, particularly in view of the provisions of Rule 51.03(3), that the wise thing for plaintiff’s counsel to have done would have been to file a response to the request to admit denying the truth of the assertion that the plaintiff was not in the Dodge van at the time it was struck, while also pointing out the factual discrepancy. However, given the way in which the request to admit is drafted, and taking counsel at his word as an officer of the court that he was of the view that there was no need to respond, I cannot say that I am satisfied that there is no genuine issue requiring a trial. I observe that for several years the plaintiff has steadfastly maintained that he was a passenger in the van at the relevant time. In these circumstances I am not prepared to put much weight on any resulting deemed admission.

[20] There are two possibilities that arise in these circumstances. Either plaintiff’s counsel is correct, and due to the discrepancy a deemed admission sufficient to support the success of Unifund’s motion does not result, or counsel made an error in judgment in failing to respond to the request to admit. In my respectful view, each possibility leads me to the same conclusion: in circumstances where the success of the motion rests almost entirely on the deemed admission, I am not satisfied that the moving party has discharged its burden of establishing that there is no genuine issue requiring a trial.

[21] In reaching my decision I have not overlooked that Rule 20.02(1) permits the court, “if appropriate” to draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts. The responding party has not filed an affidavit from the plaintiff asserting that he was in the vehicle.

[22] Even taking Rule 20.02(1) into account, I am unable to conclude that there is no genuine issue for trial. As I have already said, the deemed admission is of limited value having regard to the way in which it was drafted and it is essentially the only evidence the moving party relies on.

[23] Before leaving this matter I would also add that I have considered whether it would be advisable to hold a “mini trial” and hear further evidence on this issue. In rejecting that approach I note the following. Five witnesses testified before the arbitrator. I do not consider the evidence that was led there, nor the reasons of the arbitrator. I take note only of the fact that there is the potential for considerable conflicting evidence. More significantly, however, this motion was only brought returnable on the trial date. In these circumstances, I concluded there was little to be gained by hearing more evidence on the motion. I add that neither party submitted that I should do so.

[24] Unifund’s motion for judgment is dismissed.

Motion to Strike the Plaintiff’s Claim and Dismiss the Action Pursuant to Rule 21

[25] The defendant, Unifund, moves pursuant to the principles of res judicata, and more particularly issue estoppel, to dismiss the action pursuant to Rule 21.01(1)(b). Counsel for Unifund was unable to say why this particular sub-rule of Rule 21 was applicable. In my view, it is rule 21.01(3)(d) which is applicable. That sub-rule provides, inter alia, that a defendant may move to have an action dismissed where it is an abuse of process. Res judicata and/or issue estoppel are generally considered to fall under that rubric: see Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 2nd ed. (Markham: LexisNexis Canada, 2014), at pp. 99-100, 113-117.

[26] Nothing turns on Unifund having referred to Rule 21.01(1)(b) as opposed to Rule 21.01(3)(d). The arguments advanced are not dependant on which sub-rule is applicable but on the law related to issue estoppel.

[27] I should also note that counsel for the plaintiff agreed that the decision of the arbitrator was admissible in relation to determining whether issue estoppel applies.

[28] Unifund submits that as the critical issue of whether the plaintiff was an occupant of the Dodge van at the time it was struck has already been determined against the plaintiff at the FSCO arbitration, the plaintiff is estopped from relitigating that issue before the court. Unifund submits that permitting that issue to be relitigated would offend the principles of res judicata and finality, raise the prospect of inconsistent decisions and would bring the administration of justice into disrepute. As the factual issue which is essential to the plaintiff’s claim in this action has already been decided against the plaintiff, Unifund submits the action should be dismissed.

[29] In Danyluk v. Ainsworth Technologies Inc., [2001] 2 S.C.R. 460, 2001 SCC 44, Binnie J. on behalf of the court, explained the policy considerations supporting the doctrine of issue estoppel. At para. 21 he said: “An issue once decided, should not generally be relitigated to the benefit of the losing party and the harassment of the winner.” At para. 18 he indicated that, while finality is “a compelling consideration” and judicially made decisions should generally be considered conclusive unless reversed on appeal, the doctrine of issue estoppel remains subject to overriding considerations of fairness in its application. Issue estoppel will not be applied where it would be unjust to do so.

[30] At para. 25 in Danyluk, Binnie J. confirmed the court’s earlier decision in Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248, at p. 254, that there are three preconditions to the application of issue estoppel:

(1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.

At para. 22 of Danyluk, Binnie J. traced the history of the extension of the doctrine of issue estoppel to administrative agencies required to make decisions in a judicial fashion.

[31] While there are three preconditions to the application of issue estoppel, satisfaction of those conditions does not lead automatically to the application of the doctrine. As previously alluded to, the court has a residual discretion to refuse to apply the doctrine where injustice would result. The nature of this discretion and elucidation of the considerations it may be based upon were the subject of discussion in Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125.

[32] In Penner, Cromwell and Karakatsanis JJ. held, on behalf of the majority at paras. 30, that issue estoppel must not be applied mechanically to work an injustice. At para. 31 they wrote:

Issue estoppel, with its residual discretion, applies to administrative tribunal decisions. The legal framework governing the exercise of this discretion is set out in Danyluk. In our view, this framework has not been overtaken by this Court's subsequent jurisprudence. The discretion requires the courts to take into account the range and diversity of structures, mandates and procedures of administrative decision makers; however, the discretion must not be exercised so as to, in effect, sanction collateral attack, or to undermine the integrity of the administrative scheme. As highlighted in this Court's jurisprudence, particularly since Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, legislation establishing administrative tribunals reflects the policy choices of the legislators and administrative decision making must be treated with respect by the courts. However, as this Court said in Danyluk, at para. 67: "The objective is to [page143] ensure that the operation of issue estoppel promotes the orderly administration of justice but not at the cost of real injustice in the particular case."

[33] In the present case counsel for the parties focused their submissions almost entirely on whether the three preconditions for issue estoppel have been met. The moving defendant says they have all been met while the responding plaintiff submits none of them have been met. Although I referred to the residual discretion, nothing was really said by either party about whether and how the court should exercise its discretion should I find that the preconditions had been met.

[34] In my view, all three preconditions to the application of issue estoppel have been met in this case. However, I am of the view that in the circumstances I am presented with the court should exercise its discretion against the application of the doctrine. I turn to the three preconditions.

[35] First, has the same question been decided in the FSCO arbitration as will have to be decided by the court with respect to the plaintiff’s tort claim? The plaintiff submits that because the FSCO arbitrator was determining entitlement to statutory accident benefits and the court will be determining whether the plaintiff should recover damages on a much broader basis related to personal injury, the same question is not being decided in the two forums.

[36] I am unable to accept this submission in the context of the first precondition. However, I see this submission as one that has significance in the application of the court’s residual discretion, which I will elaborate upon later. For now I restrict my comments to satisfaction of the first precondition to issue estoppel.

[37] While what was being sought in the FSCO arbitration is different than what is being sought in the court proceedings, the underlying factual question was and is essential to recovery in either forum: whether the plaintiff was a passenger in the Dodge van at the time of the accident. More technically, in terms of the tort claim, the question is whether the plaintiff is a deemed insured in relation to the uninsured motorist coverage of the Unifund policy having regard to the definition of “insured person” in s. 265(2)(c)(i) of the Insurance Act, R.S.O. 1990, c. I.8. In terms of the statutory accident benefits claim, it was whether the plaintiff was an “insured person” as defined in Ontario Regulation 403/96, s. 2(1), as “a person involved in an accident involving the insured vehicle”. In the circumstances of this case the plaintiff is not entitled to recover in either forum if his claim to have been a passenger in the vehicle is not substantiated.

[38] Support for this conclusion is found in Minott v. O’Shanter Development Co. (1999), 42 O.R. (3d) 321, [1999] O.J. No. 5 (C.A.), at paras. 23-25. There the court held that issue estoppel applied to questions of fact, law or mixed fact and law. What is required is that the determination of the question must have been necessary to the result in the litigation. This applies to evidentiary findings in relation to such determinative questions. See also Danyluk, at para. 54.

[39] The second requirement is that the decision be a judicial one and that it be final. No one suggests that the FSCO arbitrator was not required to act judicially in resolving the matter before him. However, counsel for the plaintiff submits that the decision is not final because, although an internal appeal was taken within the FSCO process, there remains the possibility of seeking judicial review in the Divisional Court.

[40] The plaintiff’s position is palpably incorrect. The authorities are clear that a decision is final when an appeal, although available, has not been undertaken. The only exception is in circumstances where the deciding tribunal has the power to reconsider or vary its decision of its own motion. That does not apply here. See Minott v. O’Shanter Development Co., at paras. 33-34; Danyluk, at para. 57.

[41] The third consideration is whether the parties are the same. The plaintiff submits that they were not, on the basis that Unifund had different branches of the company deal with the statutory accident benefits claim and the tort claim. I am not able to accept this submission. It is abundantly clear that in the circumstances of this case, where the claim against Unifund is based on the uninsured motorist coverage in relation to the policy on the Dodge van, that there is only one policy of insurance and the same insurance company is responsible for statutory accident benefits and any damages arising from a substantiated tort claim.

[42] I find that all three preconditions for the application of issue estoppel are met. I turn now to the second stage of the required analysis, dealing with the application of the court’s discretion whether to apply the doctrine.

[43] In respect of the application of the court’s discretion, fairness is the focus. In Penner, at paras. 37-38, the majority acknowledged the usefulness of the factors identified in Danyluk, at paras. 68-80, when considering the exercise of discretion at the second stage of the issue estoppel analysis.

[44] At para. 39 of Penner the majority explained that unfairness may arise “in two main ways which overlap and are not mutually exclusive”. The first arises from applying issue estoppel when the prior proceeding was not fairly conducted. I see no evidence of that here. No one suggests that the FSCO arbitration was not conducted in a fair manner.

[45] The second way in which the application of issue estoppel can lead to unfairness is where, although the earlier proceedings were fairly conducted, “it may nonetheless be unfair to use the results of that process to preclude the subsequent claim”. It is this form of unfairness which is of concern to me in this case.

[46] At para. 42 of Penner the majority characterizes this as a more nuanced consideration, and said the following: “This [unfairness] may occur, for example, where there is a significant difference between the purpose, process and stakes involved in the two proceedings.” At para. 43, the majority in Penner made specific reference to the “degree of financial stakes involved” and to the intention of the legislature in creating the administrative proceedings. As in Danyluk, the majority in Penner also referred to the “reasonable expectation of the parties” in terms of the effect of the administrative proceedings on their “broader legal rights”.

[47] Finally, at para. 45 of Penner, the majority states: “Thus, where the purposes of the two proceedings diverge significantly, applying issue estoppel may be unfair even though the prior proceeding was conducted with scrupulous fairness, having regard to the legislative scheme that governs the prior proceeding.” The majority noted that where less was at stake in the prior proceeding the party may not have participated in it “with full vigor”.

[48] Here I observe that what was at stake before the FSCO arbitrator, while not insubstantial, was very different than what is at stake in the court proceedings. The purpose of the two regimes are very different. If the tort claim is not permitted to be adjudicated, something the arbitrator could not do, the plaintiff will never have had what could be the more significant part of his claim for compensation determined. My conclusion is tied in to the reasonable expectation of the parties. As indicated in Penner, the consideration is “nuanced”. I am not persuaded that the plaintiff expected that the defendant’s potential liability for his tort claim could be washed away by his choosing to pursue arbitration in relation to his statutory accident benefits claim.

[49] I also observe that a decision to the opposite effect could contribute to undermining the purpose of the statutory scheme which provides those claiming statutory accident benefits with the option of arbitration as a more expeditious means of obtaining a degree of compensation as a result of their involvement in an accident, than by deferring their claim to such benefits to the trial of a civil action. See generally on this point the comments of Weiler J.A. in Machin v. Tomlinson (2000), 51 O.R. (3d) 566, [2000] O.J. No. 4338 (C.A.). I recognize that in Machin the applicability of res judicata was decided on the basis of the three preconditions and not on the basis of the court’s discretion. It seems to me, however, that the comments at paras. 10-13 of that case are appropriately taken into account when exercising my discretion. For example, such comments are relevant when evaluating the reasonable expectations of the parties.

[50] For these reasons I have decided that, in the particular circumstances of this case, it would be unfair to apply issue estoppel, notwithstanding the general importance of the finality principles that underpin that doctrine.

[51] I also wish to add the following. This motion was not brought until what was to be the commencement of the trial. That in itself could work an unfairness and hardship on the plaintiff. In my respectful view, such motions should be brought much earlier in the court proceedings. This circumstance also weighs in favour of exercising my discretion as I have.

[52] The Rule 21 motion is also dismissed.

Costs

[53] If the parties are unable to agree on costs they should exchange brief costs submissions and file them to my attention within 30 days. Subject to the submissions I may receive, at this point it seems to me that the plaintiff’s failure to in any way respond to the request to admit and the lateness of both motions are relevant factors. I would urge the parties to try to reach an agreement on costs.

F. Dawson J.

Released: February 13, 2019