Silverio Pereira v. Richard Lucas Severino
COURT FILE NO.: CV-17-575149
RELEASED: 2021/05/13
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Silverio Pereira v. Richard Lucas Severino
BEFORE: Master Graham
HEARD: May 13, 2021
COUNSEL: Silverio Pereira, plaintiff in person Teresa-Anne Martin for the defendant
ENDORSEMENT
(Re: defendant’s motion to dismiss action under rule 15.04(9) and plaintiff’s cross-motion to remove defendant’s lawyer of record)
[1] The plaintiff Mr. Pereira claims damages arising from injuries sustained in a motor vehicle accident that occurred on May 30, 2015. The statement of claim was issued on May 12, 2017 and defendant’s counsel served their statement of defence on August 11, 2017. Although not in evidence, defendant’s counsel advised that examinations for discovery were conducted in 2018.
[2] On September 29, 2020, the plaintiff’s former counsel obtained an order from Master Abrams removing themselves as Mr. Pereira’s lawyers of record. This order was served on Mr. Pereira and filed. This order contains the usual terms, as required by rule 15.04(4), setting out the provisions in rules 15.04(8) and (9) as follows:
Within 30 days of service of the order on the plaintiff, he was required either to appoint a new lawyer by serving a Notice of Appointment of Lawyer or to serve a Notice of Intention to Act in Person (rule 15.04(8)).
If the plaintiff failed to comply with either of these first terms, “this Honourable Court may dismiss the action.” (rule 15.04(9)).
[3] The defendant now moves to dismiss the plaintiff’s action based on his failure to comply with these terms of Master Abrams’ order, and for costs of the motion and the action. It is not disputed that Mr. Pereira has neither retained counsel to serve a Notice of Appointment of Lawyer, nor served a Notice of Intention to Act in Person.
[4] It is significant that at the time of the accident, both Mr. Pereira and the defendant Mr. Severino had automobile insurance coverage with Aviva Insurance. Counsel defending Mr. Severino in this pending tort action is one of Aviva’s in-house counsel. Mr. Pereira has an ongoing claim for first party accident benefits against Aviva, which is being defended by an “outside” law firm retained by Aviva.
[5] The defendant’s motion to dismiss Mr. Pereira’s action first came before me as a motion in writing on March 23, 2021. As I was not satisfied that Mr. Pereira would have been able to respond to a motion in writing, and because the defendant was seeking costs, I ordered that the motion proceed by telephone conference, which I heard on May 13, 2021. The defendant served Mr. Pereira with notice of the May 13, 2021 hearing.
[6] Mr. Pereira subsequently served a cross motion, including a motion record and a factum, returnable on the same date. Mr. Pereira’s motion is for the following relief:
An Order to remove or deny Teresa-Anne Martin [defendant’s counsel] from representing the Defendant due to conflict of interest;
An Order granting leave to discontinue the action in accordance with rule 23.01(b) of the Rules of Civil Procedure;
An Order that the Defendant’s Motion dated March 3, 2021 be dismissed in its entirety per Rule 2.1.02 of the Rules of Civil Procedure [on the basis that the motion is frivolous or vexatious or otherwise an abuse of process of the court];
The costs of this motion, with the court exercising its discretion under rule 57.07 [to award the costs against the defendant’s lawyer personally] if it deems it just.
[7] During the first few minutes of submissions, Mr. Pereira stated that he was taking medication that could affect his concentration and he also had difficultly breathing. I enquired as to whether he felt well enough to proceed today and he said that he was prepared to proceed.
Plaintiff’s motion to remove defendant’s counsel of record
[8] As Mr. Pereira’s motion essentially raises a preliminary objection to the defendant’s motion on the basis that defendant’s counsel has a conflict of interest, I will address it first.
[9] Mr. Pereira submits that, as he is insured with Aviva, he is a “client” of Aviva and Aviva is therefore precluded from retaining its employee, in-house counsel Ms. Martin, to act against one of her employer’s own clients by defending Aviva’s other insured Mr. Severino. He contends that, as an employee of his insurer, Ms. Martin is also his lawyer, thus creating a conflict of interest in the mind of a reasonable, properly-informed member of the public. Mr. Pereira concludes that in acting against him, Ms. Martin is in breach of rule 3.4-1 of the Rules of Professional Conduct which precludes a lawyer form acting for a client where there is a conflict of interest.
[10] The problem arises because both Mr. Pereira and Mr. Severino are insured with Aviva. There is no issue that Mr. Severino’s insurance policy with Aviva creates a contractual responsibility on Aviva to defend him in Mr. Pereira’s action. The issue is whether Aviva’s retainer of Ms. Martin, one of their in-house counsel, to defend Mr. Severino, creates a conflict of interest on the part of Ms. Martin.
[11] Ms. Martin acknowledges that she is an employee of Aviva. However, the fact that Mr. Pereira is insured with Aviva does not make him a client of Aviva and does not create a lawyer-client relationship with Aviva’s in-house counsel. Every Aviva in-house lawyer is not automatically a lawyer for every person insured by Aviva. Ms. Martin’s clients are the parties to litigation whom she is assigned to defend by Aviva; these clients would typically be people insured by Aviva, like Mr. Severino, but could also be Aviva itself, in the event that Aviva was a named party in an action. However, Ms. Martin was never retained by Aviva to act for Mr. Pereira so she never had a lawyer-client relationship with him that could preclude her from acting for the defendant Severino.
[12] During argument, I suggested to Mr. Pereira that his submission that Ms. Martin could not act for Aviva’s insured Mr. Severino because she was paid by Mr. Pereira’s insurer would mean that Mr. Severino could not be defended by anyone because whether the lawyer retained by Aviva was in-house or outside counsel, they would still be paid by Aviva. Mr. Pereira submitted that Mr. Severino could be defended by outside counsel retained by Aviva, in the same way that Aviva has retained outside counsel to defend it in Mr. Pereira’s accident benefits claim that is currently before the Licence Appeal Tribunal (“LAT”). This is a distinction without a difference. Aviva’s in-house counsel and outside counsel are still both paid by Aviva.
[13] Mr. Pereira also argued that Ms. Martin should not be defending Mr. Severino in his tort action because his accident benefits claim is still in issue by way of the LAT proceeding. It is true that Aviva, as Mr. Pereira’s first party insurer, is prohibited from disclosing information that it obtains from Mr. Pereira in his accident benefits claim, absent Mr. Pereira’s authorization or a court order. However, there is no evidence of any unauthorized communication of information from Aviva’s accident benefits department or accident benefits lawyer to Ms. Martin as counsel for Aviva’s insured Mr. Severino in this tort action.
[14] To summarize, Ms. Martin has never been retained as Mr. Pereira’s lawyer and the fact that she is an employee of Mr. Pereira’s insurer Aviva does not create a lawyer-client relationship with Mr. Pereira. Ms. Martin’s only involvement in respect of Mr. Pereira’s claims arising out of the May 30, 2015 motor vehicle accident has been as counsel for the defendant Mr. Severino, pursuant to Aviva’s duty to defend Mr. Severino under his insurance policy with Aviva. The fact that Ms. Martin receives remuneration from Aviva, which also happens to be Mr. Pereira’s insurer, does not preclude her from acting for Mr. Severino because Aviva’s accident benefits file for Mr. Pereira’s first party claim, and Aviva’s tort file for the defence of Mr. Severino, are completely separate files. I conclude that Ms. Martin does not have a conflict of interest and the motion to remove her as counsel for Mr. Severino is hereby dismissed.
[15] The relief in item 2 of Mr. Pereira’s motion is for leave to discontinue his action. This relief relates to the outcome of the defendant’s motion and I will consider this position when ruling on that motion.
[16] The relief in item 3 of Mr. Pereira’s motion is to dismiss the defendant’s motion as frivolous or vexatious or an abuse of process. I will address this relief in my ruling on the defendant’s motion.
[17] The relief in item 4 of Mr. Pereira’s motion is for the costs of this motion to remove Ms. Martin as counsel. As this motion is dismissed, there shall be no costs. However, even if Mr. Pereira had been successful, I would not have awarded costs against Ms. Martin personally because there has been no conduct on her part in relation to this action that would warrant such an extraordinary order.
Defendant’s motion to dismiss the plaintiff’s action under rule 15.04(8) and (9)
[18] The defendant’s motion is to dismiss Mr. Pereira’s action based on his failure to either have new counsel serve a Notice of Appointment of Lawyer or to serve a Notice of Intention to Act in Person, as required by the order of Master Abrams dated September 29, 2020 removing his lawyer of record. Mr. Pereira does not dispute that he has taken neither of these steps.
[19] On his motion, Mr. Pereira sought leave to discontinue the action. The defendant seeks a dismissal order. Mr. Pereira will only agree to a notice of discontinuance under rule 23.01(b) and submits, based on Simancic v. Ross, 2004 CanLII 66337 (ON SC) that “a discontinuance without terms is not an unreasonable termination of a lawsuit, particularly where the prospect of the eventual passing of a limitation period will afford the defendant additional security.”
[20] The problem with a discontinuance from the defendant’s standpoint is that rule 23.04(1) states:
23.04(1) The discontinuance of all or part of an action is not a defence to a subsequent action, unless the order giving leave to discontinue or a consent filed by the parties provides otherwise.
[21] Under rule 23.04(1), a discontinuance is not in itself a bar to a further action for the same relief claimed in the discontinued action. Accordingly, the defendant should not be required to accept a notice of discontinuance in resolution of this motion. This is particularly the case where, as indicated below, Mr. Pereira has stated that he wants to keep his options open with respect to pursuing the action, at least until the fifth anniversary of the issuance of the statement of claim.
[22] The relief sought by Mr. Pereira in his motion also included a dismissal of the defendant’s motion under rule 2.1.02 on the basis that the motion is frivolous or vexatious or an abuse of process of the court. Based on Mr. Pereira’s admitted non-compliance with Master Abrams’ order of September 29, 2020, the defendants are fully within their rights to bring a motion to dismiss his action. I accept that the court has discretion with respect to how to resolve the motion, but there is nothing frivolous, vexatious or abusive about the motion.
[23] Mr. Pereira relies on the language in rule 15.04(9) and paragraph 3 of Master Abrams’ order that “if the plaintiff fails to comply with paragraph 2 above [requiring service of a Notice of Appointment of Lawyer or Notice of Intention to Act in Person within 30 days of being served with the Order], a. This Honourable Court may dismiss the action.” He submits that the word “may” confers a discretion on the court and that the court should allow the action to continue so that he can decide in the future whether or not to pursue the tort claims advanced in the action. Finally, he submits that allowing the action to continue will not leave it unresolved indefinitely because it will be administratively dismissed by the registrar following the fifth anniversary of the issuing of the statement of claim (rule 48.14(1)1.).
[24] Mr. Pereira’s action was commenced four years ago and arises from a motor vehicle accident that occurred six years ago (as of May 30, 2021). He has had more than seven months to comply with Master Abrams’ order and has yet to do so. The defendant is entitled either to the finality of a dismissal order or the knowledge that the action will continue to move forward to a resolution at trial. The defendant should not have to wait, as the plaintiff has suggested, for the action to be dismissed by the Registrar following the fifth anniversary of the issuing of the statement of claim.
[25] Accordingly, I order as follows:
Mr. Pereira shall serve and file either a Notice of Intention to Act in Person or retain a lawyer to serve and file a Notice of Appointment of Lawyer by June 30, 2021. The serving and filing of a Notice of Intention to Act in Person in no way precludes Mr. Pereira from retaining counsel in the future should he choose to do so. It is also still open to Mr. Pereira to consent to a dismissal order.
Pending Mr. Pereira’s compliance with this order, the defendant’s motion to dismiss the action is adjourned sine die (i.e without a fixed return date). If Mr. Pereira fails to comply with the order, the defendant may renew their motion to dismiss the action, which may include a renewal of their claim for costs of the motion and the action. The only issue on any renewed motion will be whether Mr. Pereira can reasonably explain any non-compliance with the above order extending the deadline in Master Abrams’ order. I am seized of the motion.
This order is effective without further formality.
MASTER GRAHAM
May 13, 2021