Court File and Parties

COURT FILE NO.: CV-18-77027 DATE: March 18, 2020

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

LUDOVIC LEDOUX, Plaintiff

• Tijana Potkonjak for Plaintiff

- and -

BYEONGHEON LEE, Defendant

• Self-represented

- and -

UBER TECHNOLOGIES INC., Third Party

• Mirel Giugaru for Third Party Uber Technologies Inc. and the proposed defendant Uber Canada Inc.
• Jennifer Therrien for proposed third party The Co-Operators General Insurance Company

HEARD: March 13, 2020

Endorsement

JUSTICE SALLY GOMERY

[1] On March 13, 2020, I heard two motions in this action. After hearing submissions, I advised the parties that I was granting both motions, with written reasons to follow. These are those reasons.

[2] In the lawsuit, Ludovic Ledoux seeks damages for injuries he sustained in a motor vehicle accident on July 5, 2016, when his motorcycle collided with a car driven by the defendant Byeongehon Lee. Mr. Lee’s car was insured through an owner’s policy issued to him by The Co-Operators General Insurance Company (“Co-Operators”). He was apparently using his car to work as an Uber driver at the time of the accident.

Co-Operators’ Motion

[3] Co-Operators has denied liability under the policy issued to Mr. Lee, on the basis that he failed to disclose to his insurer that he began working as an Uber driver about nine months before the July 5, 2016 accident. In its motion, Co-Operator sought to be added as a third party to the action pursuant to s. 258(14) of the Insurance Act, RSO 1990, c. I.8.

[4] Section 258(14) provides that, if an insurer denies liability under an automobile insurance policy, it may apply to the court to be made a third party in any action in which a claim is made against the insured for damages that might trigger the insurer’s obligation to indemnify the insured under the policy.

[5] The only party opposing Co-Operators’ motion was Mr. Lee. He took the position that his insurer should not be granted any procedural rights in the action because of its coverage position. He also expressed concern that Co-Operators and the other parties to the action would work together to shift liability to him.

[6] As I explained to Mr. Lee at the hearing, if an insurer can show that the conditions giving rise to an application under s. 258(14) are met, the court has no discretion to deny its demand to be added as a third party. There is no basis in this case on which I can deny the motion.

[7] I therefore granted Co-Operators’ motion and ordered the it be added as a third party, with the rights conferred on it under s. 258(15) of the Act. I declined to order that Co-Operators’ role not be disclosed to the jury, if this matter is tried before a jury, since this is an issue that is subject to the discretion of the trial judge. I awarded Co-Operators costs of $1500 payable by Mr. Lee when this action is resolved either by way of final judgment or otherwise.

Plaintiff’s Motion

[8] The defendant has already made a third party claim against Uber Technologies Inc. although, according to its counsel, he should have named Uber Canada Inc. (“Uber”). In his motion, Mr. Ledoux sought to amend its statement of claim to increase his claim for loss of income, and to add Uber as a defendant to the main action. In the proposed amended statement of claim, he alleges that Mr. Lee was acting as an agent for Uber at all times relevant to the claim and, as such, Uber is liable for the negligent acts and omissions by Mr. Lee that caused the July 2016 accident.

[9] Uber and Mr. Lee each contested the plaintiff’s motion. Uber opposed it on the ground that Mr. Ledoux did not take reasonable steps to discover his claim against it prior to July 2018, when it was served with Mr. Lee’s third-party claim. It argued that, as a result, the plaintiff’s action against it is time-barred. The basis for Mr. Lee’s objection to adding Uber as a defendant was unclear.

[10] After reviewing the evidence on the motion and the parties’ written arguments, and hearing oral submissions on behalf of the plaintiff, Uber Canada and Mr. Lee, I concluded that Mr. Ledoux should be granted leave to amend his statement of claim.

Legal principles governing Mr. Ledoux’s motion

[11] Rule 26.01 of the Rules of Civil Procedure requires a court to grant leave to amend a pleading “on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment”. Rule 5.04(2) provides that a court may add a party to a proceeding unless the same sort of prejudice would result.

[12] The Limitations Act, 2002, SO 2002, c 24, Sch. B, qualifies the rule at r. 5.04(2) in an important way. A proceeding must be brought within two years of the day on which the claim was discovered, pursuant to s. 4 of the Act. Section 5(1) sets out the test for when a claim is discoverable: the two-year delay runs from the day on which the person with the claim first knew, or reasonably ought to have known, among other things, the identity of the person whose act or omission caused him to suffer an injury, loss or damage. Further to s. 5(2), a claimant is presumed to know the identity of that person on the date of the event giving rise to his claim, unless he proves otherwise. Finally, s. 21(1) states that, 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.

[13] In Arcari v. Dawson, 2016 ONCA 715, 134 O.R. (3d) 36, the Court of Appeal explained how s. 21(1) of the Act applies in the context of a motion a statement of claim to add a defendant who argues that the claim is time-barred. It noted, at para. 7, that “the clear expiration of a limitation period is an absolute bar to the addition of a party to an already existing action” (emphasis added). The Court therefore directed at para. 10 that:

When a plaintiff’s motion to add a defendant is opposed on the basis that her claim is statute-barred, the motion judge is entitled to assess the record to determine whether, as a question of fact, there is a reasonable explanation on proper evidence as to why she could not have discovered the claim through the exercise of reasonable diligence.

[14] In Morrison v. Barzo, 2018 ONCA 979, 144 O.R. (3d) 600, at para. 29, the Court clarified what the court must assess:

Where there is a question as to whether claims covered by the basic two-year limitation period are statute-barred, such that parties cannot be added pursuant to s. 21(1) of the Limitations Act, the court must make a finding as to when the plaintiff first knew the elements of the claim listed in s. 5(1)(a). If the date of actual discovery, as determined by the court, would bring the claim within the limitation period, and the proposed defendant relies on “reasonable discoverability” to contend the claim was brought outside the prescription period, the court must go on to determine under s. 5(1)(b) when “a reasonable person with the abilities and in the circumstances of [the plaintiff] first ought to have known of the matters referred to in clause (a)”.

[15] The Court emphasized at para. 30 of Morrison that a motion judge should not deny a motion to add a new party unless the evidence on the motion shows that the plaintiff ought reasonably to have discovered the claim against that person at an earlier, specific date:

The court must be satisfied that a reasonable person in the plaintiff’s circumstances ought to have discovered the claim, and the date of such reasonable discovery must be determined. It is not sufficient for the court to say that the claim was discoverable “before the expiry of the limitation period”, without explaining why. It may be that the date of reasonable discovery can only be determined at a later stage in the proceedings, at trial or on a summary judgment motion. In such a case, the motion to add the defendant should be granted, with leave for the defendant to plead a limitation defence… .”

[16] On his motion to add Uber, Mr. Ledoux was therefore required to prove two things. He had to prove that he only discovered that Mr. Lee worked for Uber on a date less than two years before he brought this motion, and he had to prove that he made reasonably diligent efforts to discover the claim prior to this date.

When did Mr. Ledoux discover his claim against Uber?

[17] Mr. Ledoux filed two affidavits sworn by Isabelle Corbeil, a lawyer at Vincent Dagenais LLP, in support of his motion to amend. At paragraphs 10 and 13 of her first affidavit, Ms. Corbeil stated that Mr. Ledoux was not aware that Mr. Lee was working for Uber at the time of the accident and did not become aware of this until he was served with Mr. Lee’s statement of defence and third party claim on July 23, 2018.

[18] At the hearing of the motion, counsel for Uber argued that these statements should be struck from the affidavit or should be given no weight, because Ms. Corbeil did not state the source of her information and belief about Mr. Ledoux’s knowledge, and she refused to answer some questions at her cross-examination based on solicitor-client privilege.

[19] I agree with Mr. Giugaru that, in her affidavit, Ms. Corbeil should have more clearly identified the basis for her assertions about Mr. Ledoux’s state of knowledge. Rule 39.01(4) provides that an affidavit for use on a motion may contain statements of the affiant’s information and belief, “if the source of the information and the fact of the belief are specified in the affidavit”. At paragraph 1 of her first affidavit, Ms. Corbeil says that she is an associate lawyer of the firm acting for Mr. Ledoux and, as such, has knowledge of the matters contained in the affidavit. She did not say how precisely she knew that Mr. Ledoux and Mr. Lee were strangers at the time of the accident, or the basis for her belief that her client did not acquire any knowledge of Mr. Lee’s work for Uber prior to service of the statement of defence.

[20] On the other hand, I do not agree that Ms. Corbeil refused to answer questions about the source of the statements at paragraphs 10 and 13 of her first affidavit during her cross-examination. She was in fact not asked any direct questions about these statements. Mr. Giugaru asked Ms. Corbeil, in general, what steps were taken by her firm to identify the defendant driver. Mr. Ledoux’s counsel refused to permit Ms. Corbeil to answer this broad question, on the grounds that this information was protected by solicitor-client privilege. Notwithstanding this refusal, the plaintiff’s counsel subsequently provided Uber’s counsel with information and documents in response to specific questions about its efforts to obtain the police report, its correspondence with Co-Operators, and its communications with Co-Operator’s counsel.

[21] Mr. Giugaru did not ask Ms. Corbeil about the basis on which she believed that Mr. Ledoux had no knowledge of Mr. Lee’s connection with Uber prior to July 2018. It is impossible to be sure how Mr. Ledoux’s counsel would have responded to such questions if asked but, based on its willingness to waive solicitor-client privilege to answer other questions, I infer that some information may have been provided.

[22] Uber filed a responding affidavit by Bronwyn Martin, one of Uber’s lawyers. Ms. Martin focused on what she characterized as a lack of due diligence by the plaintiff in failing to send a formal notice to Co-Operators advising of his potential claim against Mr. Lee. She did not challenge the assertion, in the notice of motion and in Ms. Corbeil’s affidavit, that Mr. Ledoux was unaware of any connection between Mr. Lee and Uber prior to July 2018. She accepted that he was unaware but took the position that this ignorance was unreasonable in the circumstances.

[23] Ms. Martin produced, as an exhibit to her affidavit, a letter dated July 18, 2016 from Co-Operators to Mr. Lee, stating that it was denying coverage for the accident based on his failure to disclosure that he was operating his vehicle as an Uber. She did not assert that Mr. Ledoux was provided with a copy of this letter prior to July 2018, nor is there any evidence that Mr. Ledoux knew about it.

[24] In its written argument on the motion, Uber gave no indication that it intended to argue that Mr. Ledoux knew prior to July 2018 that Mr. Lee was using his car for ride-sharing, or that it intended to attack Ms. Corbeil’s affidavit for non-compliance with r. 39.01(4). These arguments seem to have been developed at the eleventh hour.

[25] In these circumstances, although Ms. Corbeil’s assertions about Mr. Ledoux’s knowledge carry less weight than they would if she had identified the specific source of her information and belief on this subject, I was not prepared to strike them or give them no weight at all.

[26] There is no evidence that contradicts Ms. Corbeil’s affidavit evidence or suggests that Mr. Ledoux and Mr. Lee knew each other prior to the accident or interacted either at the time of the accident or afterwards. They gave the police different residential addresses. They have different surnames. They were driving in opposite directions when Mr. Lee allegedly turned left into the path of Mr. Ledoux’s motorcycle. Mr. Giugaru suggested in oral argument that, in the aftermath of the collision, Mr. Ledoux might have seen a sticker on Mr. Lee’s car showing that it was an Uber. There is no evidence that Mr Lee’s car bore such a sticker, or that Mr. Ledoux was in a condition, prior to being transported to the hospital, to talk to Mr. Lee or his passenger or to observe anything about his car.

[27] There is also no evidence nor was a credible theory advanced by Uber as to how that Mr. Ledoux or his lawyers would have acquired any direct information, in the two years after the accident, about Mr. Lee’s activities as an Uber driver. In fact, Uber’s position right up until the hearing date was that Mr. Ledoux did not know about Mr. Lee’s connection to Uber before July 2018 but that he should have.

[28] On this evidence as a whole, I concluded that the plaintiff did not have actual knowledge of the relationship between Mr. Lee and Uber until he was served with the third party claim on or about July 23, 2018.

Did Mr. Ledoux offer a reasonable explanation for not discovering the claim earlier?

[29] To meet his burden on this issue, Mr. Ledoux had to explain why the claim could not have been discovered through the exercise of reasonable diligence. As noted by the Court of Appeal, the evidentiary threshold for showing the exercise of reasonable diligence is low, and the plaintiff’s explanation should be given a generous reading and considered in the context of the claim; Morrison, at para. 32.

[30] The kind of explanation that a plaintiff must provide in the context of a motor vehicle claim was explored in the Court of Appeal’s decision in Lingard v. Milne-McIsaac, 2015 ONCA 213.

[31] Lingard was involved in a motor vehicle accident. He sued the owner of the vehicle that rear-ended his car as well as its driver. He believed that the defendants’ car was insured by Security National Insurance Company, because that is what was stated in the police report on the accident. Two and a half years after the accident, Lingard received an email from the vehicle’s owner disclosing that his policy with Security National had been cancelled prior to the accident. Lindgard then sought to add his own insurer, Wawanesa, as a defendant to the action.

[32] The judge who heard Lingard’s motion to amend the statement of claim found that he had failed to act with due diligence to discover his potential right of action against Wawanesa. In the motion judge’s view, after getting the police report, the plaintiff should have inquired directly with Security National to confirm that there were no coverage issues.

[33] The Court of Appeal granted Lingard’s appeal and allowed him to amend the statement of claim to name Wawanesa as a defendant. The Court held that it was reasonable for a plaintiff to rely on the information in a police report, and that the obligation to investigate the claim with due diligence did not require him to take further steps to confirm that coverage was in place. It concluded that there was no reason for Lindgard to treat insurance coverage as a live issue until he was advised of the policy cancellation by the defendant.

[34] In my view, Mr. Ledoux had even less reason to question coverage in this case than the plaintiff in Lindgard. In August 2017, his lawyer obtained a report from the Ottawa police stating that Mr. Lee was the driver of the car that collided with Mr. Ledoux’s motorcycle, and that Co-Operators was his insurer. The record shows that, between September 2017 and May 2018, Mr. Ledoux’s counsel provided Co-Operators with copies of the police report and hospital records. There is no evidence that Co-Operators gave Mr. Ledoux or his lawyer any reason to think that it might deny coverage during this period. The very first indication that there might be any issue was when it refused to accept service of Mr. Ledoux’s statement of claim on July 5, 2018.

[35] Counsel for Uber relied on other cases where courts have concluded that plaintiffs failed to exercise due diligence in discovering potential claims. In my view, all of these cases are factually distinguishable from this case.

[36] In some of these cases, the plaintiffs did not produce any evidence of due diligence; see, for example, Laurent-Hippoloyte v. Blasse, 2018 ONSC 940, 2018 CarswellOnt 1903, at para. 29; Arcari, at para. 14; and Dawes v. Landsborough Auctions Ltd., 2019 ONSC 2454, 2019 CarswellOnt 7389, at paras. 47 to 51.

[37] Mr. Ledoux provided evidence, through Ms. Corbeil’s affidavits and her answers to undertakings, of steps taken to explore their client’s claim. They obtained the police report and hospital records and corresponded with Mr. Lee’s insurer. It is true that Ms. Corbeil’s affidavits do not list the steps taken by her firm to explore potential claims. As observed by Master Sugunasiri in Laurent-Hippolyte, at para. 18, however, such a listing is not required. The plaintiff is only required to raise a triable issue on the question of when he reasonably should have discovered a potential claim. Mr. Ledoux did so.

[38] In other cases relied on by Uber, the circumstances were such that plaintiffs reasonably should have realized that they might have claims against other defendants. For example, in Laurent-Hippolyte, the court refused to grant leave to the plaintiff in a motor vehicle claim to add a snow removal contractor as a defendant. The master found that, given the road conditions noted in the police report, the plaintiff’s counsel would be expected to inquire with the municipality or provincial government about snow removal arrangements. The same reasoning applied in Dawes, a slip and fall case.

[39] There were no similar triggers for additional inquiries in this case. There was nothing about the circumstances of the accident that would have signalled to Mr. Ledoux or his counsel that inquiries should be made to ascertain the identity of another defendant. In argument, Mr. Giugaru suggested that the plaintiff’s counsel should have investigated whether Mr. Lee might possibly be working for a company such as Uber. He did not indicate how, practically speaking, this might have been done, given the proliferation of delivery and ride-sharing services. In any event, I do not find that a reasonable person in Mr. Ledoux’s shoes would have any reason to think that Mr. Lee was in an agency, contractor or employee relationship when the collision occurred.

[40] Uber also argued that Mr. Ledoux’s lawyer should have served Co-operators with a formal notice of his claim against Mr. Lee after getting the police report. Mr. Giugaru contended that this is a standard practice because it allows a plaintiff to claim pre-judgement interest from the date of the notice. Had Mr. Ledoux’s counsel put Co-Operators on formal notice of a potential claim, he argued, the insurer might have advised the plaintiff of the coverage issue and disclosed Mr. Lee’s activity as an Uber driver.

[41] This argument is speculative. I could not conclude, on the evidence before me, that it is standard practice for plaintiff’s counsel in MVA claims to formally notify the defendant motorist’s insurer of a potential claim. Even if I had been able to, I could not infer that a formal notice letter to Co-Operators would have yielded information about its position on coverage. Mr. Ledoux’s lawyers were in communication with Co-Operators from September 2017 forward, providing it with a copy of the police report and Mr. Ledoux’s hospital record. There is no evidence that, in the course of this correspondence, the adjuster ever so much as hinted that it might deny coverage or disclosed that Mr. Lee was participating in the gig economy, even though it notified the insured of its denial of coverage on this basis two weeks after the accident.

[42] I concluded that Mr. Ledoux had, through an appropriate explanation supported by evidence, shown that he took reasonable steps to discover the potential claim against Uber prior to July 2018. This does not foreclose the possibility that Uber may, in a summary judgment motion or at trial, raise a defence based on the Limitations Act, 2002.

Conclusion on the plaintiff’s motion

[43] I allowed the plaintiff’s motion, with costs payable by Uber on a partial indemnity basis of $6500 inclusive of fees, disbursements and HST.

[44] I have signed an order based on the draft submitted by the plaintiff but have reserved Uber’s right to raise a limitations defence, clarified the costs order and made some editorial changes.

Justice Sally Gomery Released: March 18, 2020

COURT FILE NO.: CV-18-77027 DATE: March 18, 2020 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: LUDOVIC LEDOUX, Plaintiff - and - BYEONGHEON LEE, Defendant - and - UBER TECHNOLOGIES INC., Third Party

ENDORSEMENT Justice S. Gomery Released: March 18, 2020