Court File and Parties

COURT FILE NO.: CV-18-00607934-CP DATE: 20190509 ONTARIO SUPERIOR COURT OF JUSTICE

Between:

WILLIAM ELLIOT Plaintiff

- and -

AVIVA INSURANCE COMPANY OF CANADA, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, PHILIP HOWELL and BRIAN MILLS Defendants

And in the following 13 actions:

• Black v. Belair CV-18-607931-CP
• Brooks v. Intact CV-18-607933-CP
• Unifund CV-18-607937-CP
• Sampaio v. Certa CV-18-607939-CP
• MacLeod v. Commonwealth CV-18-608382-CP
• Bonhomme v. Co-operators CV-18-608386-CP
• Robertson v. Echelon CV-18-608390-CP
• Dorman v. Economical CV-18-608396-CP
• Cicciarelli v. Wawanesa CV-18-608399-CP
• Baron v. St. Paul CV-19-611894-CP
• Gibbons v. TD Insurance CV-19-611895-CP
• Nagle v. Gore Mutual CV-19-611899-CP
• Sura v. Cumis CV-19-611901-CP

Proceedings under the Class Proceedings Act, 1992

BEFORE: Justice Edward Belobaba

COUNSEL: Glenn Frelick, Dona Salmon and Adam Mortimer for AG Ontario (Moving Party) Paul Harte for the Plaintiffs (Responding Parties)

HEARD: May 2, 2019

Motion to dismiss 14 actions for non-compliance with the notice requirement in s. 7(1) of the Proceedings Against the Crown Act

[1] The plaintiffs have filed 15 proposed class actions against 15 different Ontario auto insurers for failing to comply with the bulletins and guidelines issued by the Financial Services Commission of Ontario (“FSCO”) relating to the inclusion of HST in the calculation of benefits under the SABS.

[2] The FSCO’s bulletins and guidelines apparently made clear that the payment of HST was the responsibility of the insurer and was not to be deducted from any caps or benefits payable under the SABS. The plaintiffs say the defendant insurers ignored these bulletins and guidelines and included HST amounts in the calculation of benefits payable under the SABS.

[3] The plaintiffs also sue the FSCO defendants in identical fashion in each of these 15 actions alleging that Messrs. Philip Howell and Brian Mills, the former and current FSCO superintendents, failed to ensure that the insurers complied with the FSCO bulletins and guidelines.

[4] Because the claim against the FSCO defendants is a proceeding against the Crown, the plaintiffs were required to provide notice under s. 7(1) of the Proceedings Against the Crown Act (“PACA”): [^1]

Subject to subsection (3), except in the case of a counterclaim or claim by way of set-off, no action for a claim shall be commenced against the Crown unless the claimant has, at least sixty days before the commencement of the action, served on the Crown a notice of the claim containing sufficient particulars to identify the occasion out of which the claim arose, and the Attorney General may require such additional particulars as in his or her opinion are necessary to enable the claim to be investigated.

[5] On July 13, 2018 one of the plaintiffs’ lawyers, Jay Ralston purported to provide the required notice. I will refer to this notice as the Ralston Notice. In a three-page letter to the Civil Division of the Crown Law Office of the Ministry of the Attorney General Mr. Ralston referenced the Mieyette action (the first of the 15 actions) and notified the Crown as follows:

(i) Ms. Mieyette intends to commence a class proceeding against the Ministry of Finance and the FSCO; (ii) The intended class members in relation to the FSCO claim (that is, the claim against former and current FSCO superintendents, Howell and Mills) are all persons who were entitled to receive SABS and whose entitlement for benefits was reduced by the amount of the HST; (iii) The defendants Howell and Mills were advised that Ontario auto insurers were in violation of the FSCO regulations and guidelines and were reducing the SABS by the amount of the HST; (iv) The defendants Howell and Mills failed to enforce said regulations and guidelines and are liable in negligence and misfeasance of public office; (v) This letter is good and sufficient notice of the intention to commence proceedings [plural] as against Her Majesty the Queen in right of Ontario.

[6] I pause here to note that it was not completely clear from the Ralston Notice whether at the time of this notice just one proposed class action would proceed (naming the FSCO defendants and the 15 insurers) or, as it turned out, 15 separate proposed class actions would proceed with the same claim being made against the FSCO defendants in each of the 15 separate actions. Both possibilities, given Mr. Ralston’s use of “proceeding” and “proceedings” were covered in the Ralston Notice.

[7] The Crown says the Ralston Notice about the FSCO defendants was sufficient for the launching of the first action, Mieyette, but not for the other 14 actions. In particular, argues the Crown, because it did not receive notice of the actual names of the other 14 claimants (i.e. the other 14 proposed representative plaintiffs), the other 14 actions are nullities.

Analysis

[8] Both sides agree that a s. 7(1) PACA notice was required; the Crown was not required to waive the notice requirement; and a failure to comply with section 7(1) rendered the action a nullity. The question is whether, as judicially interpreted, s. 7(1) has been satisfied on the facts of this case.

[9] In my view, the decision of the Court of Appeal in Mattick Estate[^2] is determinative.

[10] In Mattick Estate, the Court of Appeal concluded that the proper interpretation of s. 7(1) of PACA was less about strict compliance and more about its legislative purpose. Justice Goudge, writing for the Court, said this:

Section 7(1) requires that at least sixty days prior to the commencement of an action, the Crown must receive notice that sufficiently identifies the occasion out of which the claim arose that the Crown can investigate the claim. Investigation at this early point makes it possible to discuss the complaint and settle it before the claimant may have irrevocably fixed on litigation … the purpose of this provision is to allow the Crown to gather sufficient information to permit it to resolve the complaint to the mutual satisfaction of itself and the complainant in advance of any litigation, and failing that, to allow the Crown to properly prepare a defence to the litigation which may result.

The language of s. 7(1) requires only that the notice contain sufficient facts to identify the occasion at issue in order that the Crown can investigate.

Setting the language of s. 7(1) against the backdrop of its legislative purpose, I do not think that any particular formula of words must be used to give notice.

Rather, I think that s. 7(1) requires that a claimant must serve a notice that communicates a complaint which, if not satisfied, could reasonably be anticipated to result in litigation against the Crown. When coupled with particulars that sufficiently identify the occasion in question to permit the Crown to investigate, such a notice fulfils the legislative purpose. It allows the Crown to gather sufficient information to permit resolution of the complaint in advance of legal action or, if that fails, to prepare to defend the litigation which the notice makes it reasonable to anticipate. [^3]

[11] Tracking the language in Mattick Estate, it is obvious to me that the plaintiffs in this proposed class action served a notice that communicated a complaint which, if not satisfied, could reasonably be anticipated to result in litigation against the Crown. The Ralston Notice provided particulars that sufficiently identified the occasion in question to permit the Crown to investigate.

[12] The Ralston Notice, in essence, notified the Crown that the FSCO defendants (namely Messrs. Howell and Mills) would be sued in one or more class actions and set out the reasons why they would be sued. In my view, the defendant Crown had all the information it needed from the Ralston Notice as to why the FSCO defendants were being sued. And if the Crown needed more particulars, it could have pressed for them as provided for in the last two lines of s. 7(1).

[13] In short, I have no difficulty concluding that the Ralston Notice satisfied the legislative purpose of s. 7(1) as set out by the Court of Appeal in Mattick Estate.

[14] The fact that the Ralston Notice did not make clear if the proposed class action would be a single proceeding or 15 separate proceedings and did not explicitly name the “other 14” proposed representative plaintiffs was really of no concern to the Crown. Whether the proposed class action continued as one proceeding or fifteen is something that class counsel would have to decide in the months ahead. The important point is that the FSCO defendants were being sued regardless; the claims against the FSCO defendants would remain the same, unaltered and identical; and the Crown was sufficiently notified of these claims in the Ralston Notice.

[15] It is interesting to note that in Mattick Estate, which involved an allegation that the province’s medical attendants failed to properly perform CPR and defibrillate Jim Mattick causing his death, an action was brought against the Crown by Mr. Mattick’s estate, his wife and family. The notice letter, which the Court of Appeal accepted as sufficient notice under PACA, and which was written by the deceased’s wife Lauren, did not make any obvious “claim”, did not identify any specific “claimant”, and did not mention or refer to the plaintiffs named in the subsequent legal proceeding. For example, it did not name family members Lindsay Christine Mattick or James Alexander Mattick or even the Estate of James Mattick.

[16] The Court of Appeal, in approving the somewhat fuzzy “notice letter” as sufficient under the “legislative purpose” approach, did not require that every plaintiff be named in the notice letter or that every plaintiff that materialized in a subsequent action provide a separate PACA notice. It was enough that the core legislative purpose of s. 7(1) was satisfied.

[17] The first part of the Mattick test asks whether there was a notice that communicated a complaint which, if not satisfied, could reasonably be anticipated to result in litigation. The Ralston Notice set out a specific grievance and threatened litigation. The Crown does not dispute this.

[18] The second part of the Mattick test requires particulars sufficient to identify the occasion in question to permit the Crown to investigate. The Ralston Notice set out a precise description of the Crown defendants that would be sued, the conduct complained about, and the class members impacted by the impugned conduct. The Crown did not file any evidence to the effect that it was unable on the basis of the Ralston Notice to undertake an adequate investigation into a possible resolution of the complaint or to prepare to defend against the threatened litigation. The Crown did not request further particulars.

[19] In this case, there is no evidence that the failure to identify each and every possible representative plaintiff was in fact an impediment to the resolution of the claim against the FSCO. Had the Crown wished to resolve the claim against the FSCO defendants as set out in the Ralston Notice, they could have done so, with Ms. Mieyette as the proposed representative plaintiff in the context of a settlement of the proposed class action against the Crown.

[20] The identification and suitability of the representative plaintiff is a procedural issue that is best dealt with as part of the certification process. The identification of every proposed representative plaintiff months before certification is impracticable and would serve no useful purpose when considering the “legislative purpose” of s. 7(1) of PACA.

[21] In any event, as I have already noted, the decision of the Court of Appeal in Mattick Estate is determinative on the facts herein, and it is determinative in favour of the plaintiffs.

Disposition

[22] The motion is dismissed. The “other 14 actions” are not nullities and may proceed.

[23] I asked counsel at the hearing of the motion to provide me with their costs request if their side were successful. The defendants would have requested $5000; the plaintiffs would have requested $4000. The plaintiffs have prevailed on this motion. Costs are fixed at $4000, payable forthwith by the defendants to the plaintiffs.

[24] Order to go accordingly.

Justice Edward Belobaba Date: May 9, 2019

[^1]: Proceedings Against the Crown Act, R.S.O. 1990, c. P.27. [^2]: Mattick Estate v. Ontario (Minister of Health), [2001] O.J. No. 21. [^3]: Ibid. at paras. 15-18.