COURT FILE NO.: CV-19-3545
DATE: 20210112
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Joel Deonanan and Pramila Deonanan, Plaintiffs
AND:
Lap Kwan, 2388538 Ontario Incorporated o/a Zhong Wei Company, Keara Shepherd, Alexander LaBelle and Allstate Insurance Company of Canada, Defendants
BEFORE: The Honourable Justice Chown
COUNSEL: Dana Yoon for the proposed statutory third party, Economical Insurance Co.
Andrew Chau for the Defendant Allstate Insurance Company of Canada
HEARD: January 8, 2020 (Via Zoom)
E N D O R S E M E N T
[1] This is a motion by Economical Insurance Company to have itself added as a statutory third party under s. 258(14) of the Insurance Act. Economical is entitled to this order. “The only condition precedent to the insurer being added as a third party under s. 258(14) is that the insurer deny liability under the policy.” Gordon v Pendleton (2007), 2007 CanLII 39886 (ON SC), 87 OR (3d) 706.
[2] Along with that, Economical seeks an order amending the style of cause and an order setting a timeline for delivery of Economical’s statement of defence and the plaintiff’s reply, if any. These orders are granted.
[3] However, Economical also asks for:
An Order that Economical Insurance Company shall be bound by the Judgment in this action between the Plaintiffs and the Defendants and the question of the rights of the said Defendants against Economical Insurance Company should not be disposed of at trial but after trial in such a manner that may be directed by the trial Judge or following such direction as directed by a Judge in Chambers;
[4] The case law largely supports the position that the question of the rights of the defendants against Economical should not be determined in this action, but rather in a separate proceeding: Gordon, supra, at para 18; Roach v Policandriotis, [2008] CarswellOnt 411 (ONSC); Frandsen v Dalrymple, 2010 ONSC 707 at para 33; Azad v Dekran, 2012 ONSC 4257 at para 3; Kapileshwar v Sivarajah, 2008 CanLII 58154 at para 17; Ahmed v Maharaj, 2010 ONSC 5281 at para 19 to 21; Antony v Kumarasamy, 2017 ONSC 4943.
[5] However, the case law is not fully resolved: McInnis v Personal Insurance, 2009 CanLII 59676 (ONSC); Lica v Dhaliwal, 2015 ONSC 3888; Prentzas v Rivera, 2015 ONSC 5867.
[6] As can be seen from a review of the cases, it often occurs that the insurer that adds itself as a statutory third party is the only party with detailed information as to the strength of its coverage defence. The other parties seek information on the coverage question to help them to assess their risk. If I make the requested order, I will be giving the upper hand to Economical in the event this circumstance arises in this matter. I do not wish to make an order which would decide a potential issue in the lawsuit before the close of pleadings. I do not wish to pre-judge the issue or give any party the upper hand, when it is not necessary to do so at this stage.
[7] I also note that the pleadings played a role in the decisions in McInnis, Lica and Prentzas. Here, the pleadings remain open. It is premature to make the requested order.
[8] I note further that under the requested order, the coverage issue must be dealt with after the liability trial. I see no basis for making such an order. It may make more sense to resolve the coverage issue first.
[9] Further, I am being asked to order that the trial judge will give directions on how to deal with the coverage issue. I do not know the basis for the denial of coverage. On some facts, it may make sense for coverage to be determined by the trial judge or for the trial judge to give directions on how the coverage issue should be resolved. On other facts, it may not. In my view it would be wrong for me to predict the landscape at trial at such an early stage and, in effect, tell the trial judge what should happen at trial. I appreciate that the requested order would still give the trial judge discretion to order otherwise, but I do not think it is appropriate for me even to give “advice” to the trial judge. Given the lack of information and evidence I have about the matter at this stage, such advice would be uninformed.
[10] In addition, a repeated comment in the cases is that if the defendant brings a third party claim seeking coverage from the statutory third party insurer, the court may decide the coverage along with the main action. The requested order would interfere with that possibility.
[11] Economical also seeks:
An Order stating that the fact that Economical Insurance Company is a party to this action shall not be disclosed to the Jury.
[12] Again, I am not prepared to grant an order at this stage telling the trial judge what should happen at trial, even with the caveat that the order is subject to the discretion of the trial judge. By the time of trial, there may be cogent reasons why the jury should be told that Economical is a party. I am not in a position at this stage to weigh the considerations at play to make such an order. The trial judge will be in a better position to determine the issue. I see no benefit to deciding the issue now.
[13] I therefore decline to grant the order requested in paragraph 4 and 5 of the notice of motion. I have deleted those paragraphs and have signed the order.
Signed: Justice R. Chown.
DATE: January 12, 2021
COURT FILE NO.: CV-19-3545
DATE: 20210112
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Joel Deonanan and Pramila Deonanan, Plaintiffs
AND
Lap Kwan, 2388538 Ontario Incorporated o/a Zhong Wei Company, Keara Shepherd, Alexander LaBelle and Allstate Insurance Company of Canada, Defendants
BEFORE: The Honourable Justice Chown
COUNSEL: Joshua Himmel, for the Plaintffs
Dana Yoon for the proposed statutory third party, Economical Insurance Co.
Andrew Chau for the Defendant Allstate Insurance Company of Canada
ENDORSEMENT
Chown J.
DATE: January 12, 2021