Court File and Parties

Court File No.: CV-22-2009-00 Date: 2023 03 29

Superior Court of Justice – Ontario 7755 Hurontario Street, Brampton ON L6W 4T6

Re: Sarah Mullay, et al, plaintiff And: Junsoon Shaba, defendant

Before: Justice J. K. Trimble

Counsel: S. Ayub, for the plaintiff meghaa@affinitylawyers.ca

Heard: March 29, 2023, Heard in Writing

Endorsement

[1] This action arises out of an automobile collision which occurred on 19 July 2020.

[2] In this ex parte motion, the plaintiff seeks an order for substituted service of the Statement of Claim on the defendant driver by serving his automobile liability insurer. The insurer takes no position on the motion.

[3] As a habit, lawyers seek substituted service on the defendant’s motor vehicle liability insurer, automatically, when service cannot be effected at the address listed for the defendant on the police report. This is incorrect.

[4] In these reasons I wish to clarify when and how an automobile liability insurer should be involved in an order for substituted service on a defendant driver or owner of an automobile involved in an accident, or an order dispensing with service.

[5] This motion is dismissed, with leave to bring it back on, after proper efforts have been made to locate the named defendant, and an order is provided in compliance with these reasons.

[6] There are two reasons for dismissing the motion; a failure of the plaintiff to take reasonable steps to locate the party to be served, and the insurer is not the insured’s agent for service.

Reasonable Steps to Locate the Person to be Served

[7] The law requires that before an order for substituted service can be made, the plaintiff must take reasonable steps to locate the party to be served (see: Laframboise v Woodward (2002), 59 O.R. (3d) 338 (SCJ), para. 10).

[8] In this case, the plaintiff attempted to serve the defendant at the address listed on the motor vehicle accident report. She was unsuccessful. She then asked the insurer if it could assist by obtaining the cooperation of the insured. The insurer attempted to contact the insured defendant by telephone but was unsuccessful. There is no indication in the affidavit whether the insurer confirmed that the address that it had for the insured defendant was current and accurate. There is no indication that the defendant’s automobile insurer agreed to accept service on behalf of its insured.

[9] Looking at the motor vehicle accident report and asking the named defendant’s insurer if it has an address for the insured, does not constitute reasonable efforts to find the person to be served. Indeed, it is in abrogation of that responsibility.

[10] The plaintiff must do more. She could have searched social media sites, or done a Canada 411 search. She could have retained a skip tracer for a modest amount of money.

[11] None of this was done.

Serving the Defendant’s Automobile Liability Insurer

[12] Substituted service is to be granted in a manner or to a place which is likely to bring the matter to the attention of the person being served (see: Babineau v. Babineau (1983), 32 CPC 299 (Ont. Master)).

[13] There is no foundation for an order for substituted service on the defendant’s automobile insurer, by default, as if the insurer is the alter ego of the insured.

[14] There is no provision in the Insurance Act, the Highway Traffic Act, under any regulation passed pursuant to either of those statutes, nor is there any provision in Standard Automobile Owners Policy that makes the insurer the agent for service of its insureds (see: Box v. Ergen (1978), 20 O.R. (2d) 635, 88 D.L.R. (3d) 408 (H.C.J.), p. 641). Cases permitting service on the insurer usually do not provide a reason for it (see: Laframboise, para 21). The exception to this is Saraceni v. Rechenberg, [1971] 2 O.R. 735 (Co. Ct), p. 737, where Henry J. said that the insurer was the agent of the insured.

[15] Substituted service of an insured person by service on his or her insurer is an anomaly. It should not be allowed, as a rule, as it places the onus of finding the insured on the insurer. If a defendant cannot be found and there is no way to bring home to him or her knowledge of the proceedings, service should not be effected by sending a copy of the Statement of Claim to his or her insurer. It should be dispensed with. Notwithstanding this, it appears that a practice has grown up around allowing substituted service on the insurer (Laframboise, para 21).

[16] An automobile liability insurer, under s. 252(1)(c) of the Insurance Act is the insured’s irrevocable attorney for the purposes of appearing and defending an action against the insured arising out of the ownership, use, or operation of the automobile, even if the insured fails or does not wish to respond. The insurer, however, is the statutory agent for only that limited purpose. The insurer is not the insured's agent for service of an originating process (see: Chambers v. Muslim (2007), 87 OR (3d) 784).

[17] A court may only make an order that substituted service be effected on the defendant’s insurer where a) the insurer agrees to accept service on behalf of its insured, b) there is evidence that the insurer has a current address for its insured and that by serving the insurer the insurer is likely to become aware of the claim against him or her, or c) the plaintiff undertakes not to strike out the defence if the insurer cannot produce its insured person at Examinations for Discovery (see: Laframboise, supra).

[18] In this case, the Plaintiff offered no evidence that the insurer agreed to accept service, that by serving the insurer the claim would likely come to the notice of the insured, and the Plaintiff did not provide the undertaking to not move against the Defence if the insured did not attend at Examinations for Discovery.

[19] What, then, is the proper way to effect service on a defendant driver’s insurer where the driver cannot be located with reasonable efforts?

[20] If the insurer is to be served on behalf of the insured, substitutionally, it must be in addition to another method of service such as mailing it to the defendant's last address on record with the Ministry of Transportation (under the Highway Traffic Act every person holding a valid driver’s license is required to maintain a current address with the Ministry of Transportation) or by publication in two editions of a newspaper in the locality where the defendant is known to reside or in a nationally circulated newspaper if there is evidence the defendant resides in Canada.

[21] If the defendant's whereabouts are totally unknown, the appropriate disposition is to dispense with service of the statement of claim (see: Chambers, supra, para. 27).

What is the Proper Way to involve automobile liability insurer in an order dispensing with service, or for substituted service?

[22] If the Court decides to name the automobile liability insurer in an order for substituted service, based on the foregoing, the order must provide that service be made on the insured person, by mail or delivery to the last known address of the named defendant, or at the address on file with the Ministry of Transportation. The order for substituted service should specify that once service is affected on the insured as directed, the plaintiff must provide to the defendant’s automobile liability insurer a copy of the documents that were served, the order permitting substitute service, and the affidavit of service under the terms of the order permitting substituted service. Proceeding this way will put the liability insurer on notice of the claim.

[23] Where the Court dispenses with service on the defendant, the order for dispensing with service should specify that the insurer must be served with a copy of the documents to be served and the order dispensing with service.

[24] The insurer, of course, must be served with the motion record.

Trimble, J.