COURT FILE NO.: CV-16-00548448-0000

MOTION HEARD: 20210709

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: VERON GRANVILLE, Plaintiff

AND:

BLUE CROSS LIFE INSURANCE COMPANY OF CANADA, Defendant

BEFORE: ASSOCIATE JUSTICE ROBERT FRANK

COUNSEL: Joshua Gautreau, Consel for the Plaintiff / Moving Party

Andrez Belloso, Counsel for the Defendant / Responding Party

HEARD: 9 July 2021

REASONS FOR DECISION

[1] This is a motion by the Plaintiff seeking leave to transfer this action from the Superior Court of Justice to the Small Claims Court, or alternatively to continue the action under Rule 76, Simplified Procedure. For the reasons that follow, the motion is dismissed.

OVERVIEW

[2] The Plaintiff’s action arises out of a dispute with respect to the denial of the Plaintiff’s claim to long term disability benefits. The Plaintiff seeks a declaration that he is entitled to long term disability benefits and judgment for the amount due for such benefits. He also seeks damages in the amount of $1,000,000 for breach of duty to act in good faith, punitive and exemplary damages in the amount of $2,000,000.00, and aggravated damages in the amount of $1,000,000.00.

[3] A brief chronology of the history of this proceeding is as follows:

a) The Statement of Claim was issued on March 10, 2016. A Notice of Intent to Defendant was served in March 2016. On July 28, 2016, Master McAfee signed an Order granting leave to the Plaintiff to amend the Statement of Claim by substituting Blue Cross Life Insurance Company of Canada for Ontario Blue Cross and Medavie Blue Cross as a Defendant. The Statement of Claim was amended on July 12, 2017.

b) The Plaintiff was examined for discovery on April 24, 2018.

c) On April 26, 2018, the Plaintiff was served with the Statement of Defence and jury notice.

d) On February 21, 2019, the Plaintiff was served with the Defendant’s draft affidavit of documents.

e) In April 2019, the Plaintiff contacted the Defendant with a suggestion to move the action to Small Claims Court. The Defendant indicated a willingness to have the action transferred on condition that the Plaintiff paid the Defendant’s costs in the amount of $7,500. The Plaintiff was not prepared to pay that amount of costs to the Defendant.

f) On December 12, 2019, the Defendant was examined for discovery. On the same day, the Defendant served its sworn affidavit of documents.

g) On December 30, 2019, the Defendant provided the Plaintiff with a draft Amended Statement of Defence.

h) On February 6, 2020 and February 24, 2020, the Plaintiff sent requests to admit to the Defendant. The Defendant responded to the requests to admit on February 28, 2020.

i) There was further correspondence between the parties in April and June 2020 and again in April 2021 about transferring the action to Small Claims Court. In considering the Plaintiff’s request, the Defendant continued to insist on payment of its costs thrown away as a precondition to a transfer. The parties never reached an agreement on a transfer of the action to Small Claims Court and the Plaintiff ultimately brought this motion.

[4] I note that the Plaintiff’s factum contains numerous references to Rule 49 offers to settle. I find that such references are improper and contrary to Rule 49.06. All such references have been disregarded for the purposes of this motion.

POSITIONS OF THE PARTIES

[5] The Plaintiff’s primary position in its factum was that the action should be transferred to the Small Claims Court and, alternatively, that the action should be continued under Rule 76. At the hearing of the motion, the Plaintiff asserted as its primary position that the action should be continued action under Rule 76 and, alternatively, that it should be transferred to the Small Claims Court.

[6] The Plaintiff submits that at the time the Statement of Claim was issued on March 10, 2016, it was not unreasonable to have started and continued this action in the Superior Court. The Plaintiff asserts that he believed his claim was worth more than the Rule 76 monetary limits. In support of his position that he acted reasonably in commencing the action in this Court, the Plaintiff submits as follows:

a) The Defendant did not deliver its Statement of Defence until after the completion of the examination for discovery of the Plaintiff on April 24, 2018, and did not serve its affidavit of documents until December 12, 2019, after requests by the Plaintiff on April 25, 2018 and October 19, 2019.

b) Consequently, the Plaintiff did not have the benefit of knowing the Defendant’s position and did not know that the viability of his claims for damages changed and that his claim would be best heard in Small Claims Court until he had received the Statement of Defence in April 2018 and the affidavit of documents in December 2019.

[7] The Plaintiff’s position is that a continuation of the action under Rule 76, or alternatively a transfer to the Small Claims Court, would allow for the most just, expeditious and least expensive determination of the action.

[8] The Defendant’s position is that the Plaintiff has long had the necessary information to determine the proper venue for the claim. First, the Defendant points to the evidence that Blue Cross sent a copy of the claims file to the Plaintiff on June 9, 2015, before the action was commenced. Further, although its sworn affidavit of documents was only delivered to the Plaintiff at the Defendant’s examination for discovery on December 12, 2019, the Defendant’s unsworn affidavit of documents was provided to the Plaintiff on April 26, 2018.

[9] The Defendant’s position is that a transfer to the Simplified Procedure or Small Claims Court will not result in a more expeditious process, given the numerous steps that have already been completed. The Defendant also says that such a transfer will be prejudicial in that the trial will be without a jury, and if the matter is transferred to Small Claims Court the recoverable costs will be significantly limited.

LAW AND ANALYSIS

(i) Should the action be continued under Rule 76?

[10] The applicable procedure for amending the claim in this this action into Rule 76 is outlined in Rule 76.02(7). The Rule provides that an action that is not commenced under Rule 76 can be continued under Rule76 if:

(a) the consent of all the parties is filed;

(b) no consent is filed but,

(i) the Plaintiff's pleading is amended under Rule 26 to comply with subrule (1), and

(ii) all other claims, counterclaims, crossclaims and third party claims comply with this Rule; or

(c) a jury notice delivered in accordance with subrule 76.02.1(2) is struck out.

[11] In this case, the Defendant does not consent to the continuation of the action under Rule 76. In addition to other reasons, the Defendant takes the position that no declaratory relief is available under the Rule 76. Although no draft amended pleading has been served on the Defendant and none is before the Court, Plaintiff’s counsel advised at the hearing of the motion that the Plaintiff would amend the Statement of Claim to meet the requirements of Rule 76, including a decreased damages claim below the $200,000 monetary threshold and the removal of any claim for declaratory relief.

[12] Putting aside the technical issue that the Plaintiff has yet to provide a proposed draft pleading that complies with Rule 76, there is a more fundamental impediment to the relief sought on this motion to continue the action under Rule 76. As noted above, the Defendant has served a jury notice. Although the amended Rule 76 no longer allows for a jury trial, there are transitional provisions applicable to actions commenced before January 1, 2020 that create an exception for actions wherein a jury notice has been served. Therefore, it is necessary to consider how the pre‑2020 jury notice in this action impacts the assessment of whether it is appropriate to continue the action under Rule 76.

[13] In Lightfoot v. Hodgins, 2021 ONSC 1950, the Court reviewed the relevant principles for determining whether an action should be continued under Rule 76. With respect to pre-2020 jury notices, Justice Muszynski agreed with the reasoning of Master Sugunasiri (as she then was) in Joseph v. Budgell, 2020 ONSC 6526 that the most harmonious interpretation of amended Rule 76, the prohibition in amended section 108 of the Courts of Justice Act, and the applicable exemption clauses regarding jury notices, is that a party that opted for a jury trial prior to January 1, 2020 preserves its right to a jury but must proceed under the ordinary procedure rules; see Lightfoot, paras. 39 and 43. As a result, where an action pre-dates January 1, 2020 and a jury notice has been served, in deciding whether to grant leave to amend an action to continue it under the Rule 76, the Court must also determine whether the jury notice should be struck. In other words, in granting leave to amend a pleading and continue an action under Rule 76, the action cannot proceed with a jury notice because a “natural consequence of the Plaintiff's success on the amendment motion is that the Defendants’ jury notice must be struck”; see Lightfoot, para. 51.

[14] In Lightfoot, Justice Muszynski also considered whether, pursuant to Rule 47.02(2), it was appropriate to strike the jury notice as part of an order continuing an action under Rule 76. Justice Muszynski held that, in the circumstances of that case, it was appropriate to do so. On the present motion, the Plaintiff also seeks an order continuing the action under Rule 76 and an order striking the jury notice pursuant to Rule 47.02(2). However, Rule 47.02(2) provides that a motion to strike a jury notice as inappropriate must be made to a judge. As a result, pursuant to Rule 37.02(2)(a), I do not have the jurisdiction to strike a jury notice. It therefore follows that the relief sought by the Plaintiff is not available on this motion because I cannot make an order to continue this action under Rule 76 in a manner that will necessarily require the striking of a jury notice.

[15] Further, and in any event, I would decline to exercise my discretion to order a continuation of this action under Rule 76 for many of the same reasons set out below with respect to my decision to deny the Plaintiff’s request to transfer the action to Small Claims Court.

(ii) Should the action be transferred to Small Claims Court?

[16] In Ali v. Schrauwen, 2011 ONSC 2158, Master MacLeod (as he then was) observed that cases that are within the jurisdiction of the Small Claims Court are ordinarily to be moved to that branch of the court unless there is prejudice to the other party that cannot be easily remedied. In this case, I decline to transfer a claim to Small Claims Court over the objection of the opposing party for the following reasons.

[17] First, as in Lamarche v ING Insurance Company of Canada, 2012 ONSC 411, numerous steps have already been taken in the litigation which would not have been necessary under the Small Claims Court rules. The Plaintiff submits that the circumstances of this action are distinguishable from Lamarche because only two steps have been taken which would not have been necessary had the action been initiated in Small Claims Court: (1) the exchange of the affidavits of documents; and (2) the examinations for discovery. The Plaintiff submits that both of these steps have provided a benefit to the Defendant which will have some use at trial and that the costs involved were not completely wasted because each party received valuable information about the cases they will have to meet.

[18] I disagree. As in Lamarche, the Plaintiff advised the Defendant some time ago about his intention to reduce the claim and seek an order transferring it to Small Claims Court, but he was advised that the Defendant would not consent to the transfer absent payment of costs thrown away. The Plaintiff refused to pay such costs. Rather than bringing a transfer motion at that time, the Plaintiff continued to push forward with the litigation, including requiring the Defendant to serve its affidavit of documents, complete the examinations for discovery, and respond to requests to admit. The Defendant also prepared a proposed Amended Statement of Defence. The Plaintiff only brought this motion after all of these steps were undertaken.

[19] Relying on Mehrabi v Colangelo, 2019 ONSC 7208, the Plaintiff submits that the Court should not consider it necessary to award any costs to the Defendant prior to a transfer of this action to the Small Claims Court because the Plaintiff’s initial decision to commence and continue this action in the Superior Court was reasonable at the time. The Plaintiff argues that he only realized that the viability of his claims for damages changed and that his claim would be best heard in Small Claims Court following the completion of his examination for discovery, receipt of the Statement of Defence, and review of the Defendant’s affidavit of documents. I do not accept this submission and am not satisfied that there has been a material change in circumstances subsequent to the issuance of the Statement of Claim that would justify the transfer; see May v Hutchinson, 2013 ONSC 7712, para. 13. Further, I accept the Defendant’s submission that the Court should not order a transfer where the Plaintiff consciously started an action claiming $4,000,000 for damages and a declaration of entitlement to benefits and then seeks to substantially reduce the amount of damages without demonstrating that he had inadvertently chosen the wrong court. The Plaintiff’s position is inconsistent with circumstances where he proceeded through the exchange of pleadings, production of documents, and examinations for discovery, and thereby forced the Defendant to incur considerable legal costs to defend the action; see Lamarche, para. 2.

[20] As Master MacLeod (as he then was) noted in Lamarche, a plaintiff seeking to transfer a matter to Small Claims Court is not enamoured of the idea of paying a defendant’s costs incurred to defend the action in the Superior Court of Justice, and such costs can only be awarded prior to the transfer to the Small Claims Court and as a term of the transfer order; see Lamarch, para. 2 and Morain v Metropolitan Toronto Convention Centre Corporation, 2017 ONSC 4774, paras. 15 and 16. In my view, a costs order would be appropriate in the circumstances of this case, and such an order would largely eliminate the benefits of transferring the action to Small Claims Court.

[21] I also accept the Defendant’s submission that a transfer of this action to the Small Claims Court would deprive the Defendant of its substantive right to have the action tried by jury. The Defendant would be prejudiced because it has conducted its defence and based its litigation strategy on the action being tried in the Superior Court by a jury, particularly in light of its stated intention to rely on surveillance evidence that it asserts will contradict the Plaintiff’s allegations about his ability to work.

[22] I adopt the following reasoning from May v Hutchinson, at paras. 14 and 15:

I accept that, in the exercise of a discretion on whether to transfer an action to the Small Claims Court, the court should consider the overall goal expressed in rule 1.04 of securing the just, most expeditious and least expensive determination of every civil proceeding on its merits, and the principle of proportionality. The inclusion of the adjective "just" in Rule 1.04 carries with it a requirement that the process adopted, and the exercise of discretion by the court, must be fair to both sides. It was the Plaintiff who chose to claim the amount of damages that she did and to commence her action in the Superior Court and the Defendant was entitled, and indeed required, to marshal resources and to adopt a litigation strategy commensurate with the claim and the forum chosen by the Plaintiff. In the circumstances of this case, it would be unfair to the Defendant to effect a transfer to the Small Claims Court simply because the Plaintiff has now come to the realization that her true claim for damages is within the jurisdiction of the Small Claims Court and wishes to mitigate her exposure to a possible adverse award of costs in the Superior Court.

Moreover, I am not satisfied that a transfer to the Small Claims Court would result in an appreciably more expeditious process, given that virtually all of the required pre-trial steps have been completed and the action is ready to be set down for trial and pre-tried in the Superior Court

[23] In summary, I find that this motion has come far too late and is an attempt by the Plaintiff to shield himself from a possible adverse cost award in the Superior Court. I am not satisfied on the evidence that a transfer at this late stage would allow for the most just, expeditious and least expensive determination of the action.

CONCLUSION

[24] The Plaintiff’s motion is dismissed. If the parties cannot agree on costs of this motion, they may provide the Court with written submissions of no more than 3 pages in length by October 29, 2021.

Associate Justice Robert Frank

DATE: October 8, 2021