Osborne Report on Civil Justice Reform Released

Posted on November 23, 2007 by Stephen Cavanagh

Former Associate Chief Justice Coulter Osborne has released his Civil Justice Reform Project. He is scheduled to address the Montebello Civil Litigation Conference tomorrow and the Attorney-General is to speak at the conference today.

The report can be viewed here.

Some of the key proposals:

increasing Small Claims Court jurisdiction from $10,000 to $25,000;
increasing Simplified Rules jurisdiction from $50,000 to $100,000;
a right to have up to two hours of discovery in simplified rules cases;
a call for the appointment of more Superior Court judges, particularly in certain regions of the province;
amend rule 20 to permit judges hearing summary judgment motions to weigh evidence and evaluate credibility;
amend rule 20 to permit judges to order “mini-trials”;
study needs generated by self-represented litigants;
no juries in Simplified Rules cases without a court order;
replace the “semblance of relevance” test for discovery with one of simple relevance;
limit discovery of an adverse party to seven hours. More time could be obtained on consent or by court order;
encourage parties to meet to agree on various discovery issues;
measures to encourage objectivity on the part of expert witnesses and agreement, where possible, among experts;
take steps to ensure an adequate complement of case management masters in Ottawa;
allow pre-trial judges to preside at trial, where the parties consent;
only orders finally disposing of an action would be appealable to the Court of Appeal, with all other orders being appealed to the Divisional Court;
enforce time limits at trials more strictly;
zero tolerance of incivility;
introduction of “proportionality” as an overarching principle governing costs;
a requirement that counsel prepare a litigation budget and review it with the client prior to commencing or defending a proceeding.

Posted in Practice and Procedure | Comments Off

Another Defendant Receives Substantial Indemnity Costs

Posted on November 21, 2007 by Stephen Cavanagh

In Davies v. The Corporation of the Municipality of Clarington, Madam Justice J.E. Ferguson of the Ontario Superior Court was fixing costs in an action in which one of the defendants, “Blue Circle”, had been successful in having the claim against it dismissed at trial. Although she did not refer to the recent decision of Mr. Justice Robert Smith in Dunstan v. Flying J Travel Plaza, Her Honour came to a similar decision as had been made in Dunstan: she awarded costs to the defendant on a substantial indemnity basis because it had offered to consent to a dismissal without costs.

In this case, there had originally been a number of other parties. After the evidence had been called at a trial which, in total, lasted over ten weeks, some of the defendants settled with the plaintiff. The only question that Ferguson J. ultimately had to decide (apparently at the instance of the settling defendants) was whether Blue Circle had any liability. She concluded that it did not. As a result, Blue Circle’s costs were sought from the settling defendants, not from the plaintiffs.

Blue Circle had offered to consent to a dismissal without costs in 2002, but that offer had remained open for only 30 days. It made a second offer to settle on a without costs basis on February 1, 2005 and that offer was open until trial. It was the second offer that gave rise to the order for substantial indemnity costs.

As Justice Smith had done in Dunstan v. Flying J, Justice Ferguson considered the Court of Appeal’s 1990 decision in S & A Strasser Ltd. v. Richmond Hill (Town), where the Court held that “the discretion to award substantial indemnity costs to a successful defendant was found in the general language of 57.01(1) which defined the principles for the award of costs”.

The settling defendants argued that S & A Strasser Ltd. could be distinguished because it had not dealt with costs of a crossclaim, as was the case here. Her Honour rejected this argument, saying, “I see no reason why I should not exercise my discretion and award costs on a substantial indemnity basis from the date of the offer and forward.”

She also awarded partial indemnity costs prior to the date of the offer.

The decision is also of some interest because Justice Ferguson dealt with a number of types of disbursements and ruled on whether or not each was recoverable. These included couriers, transportation, meals, agent’s fees, etc.

Posted in Costs | Comments Off

C.A. Dismisses Appeal in 9/11 Defamation Case But Recognizes “Public Interest Responsible Journalism” Defence

Posted on November 13, 2007 by Stephen Cavanagh

The Court of Appeal today released its ruling in Cusson v. Quan, Ottawa Citizen et al. The case is an important one in the law of defamation and, in particular, to defences available to the media. The court dismissed an appeal from the decision of the jury at trial.

The plaintiff, Danno Cusson (above), was an OPP officer working in the Kanata detachment. On September 11, 2001, he was on patrol when he heard about the attacks on the World Trade Centre in New York City. At trial, he testified that because he had family members there, whom he had been unable to reach, he decided to drive to New York at the end of his shift to check on them. He packed his police uniform as well as some military clothing, a bullet-proof vest and his service revolver. Accompanied by his dog, “Ranger”, he set out for New York City.

Upon his arrival, he confirmed that his family was fine. He then offered his assistance (and that of Ranger) in searching for victims at “Ground Zero”.

The Ottawa Citizen published three stories about the plaintiff’s initiative, in September and October, 2001. It reported that Mr. Cusson had falsely represented himself to officials in New York as an RCMP officer and that he had claimed that Ranger was a trained search-and-rescue dog. It quoted the New York state police K-9 co-ordinator as having said that Mr. Cusson may have hindered, rather than helped, the rescue efforts.

Mr. Cusson returned to Ottawa on September 17, 2001, at which time he asked for a leave of absence from the OPP, to permit him to continue his rescue work in New York. When his request was refused, he offered his resignation from the OPP and went back to New York to resume his efforts at Ground Zero.

The OPP later conducted an internal investigation relating to his having taken his service revolver and his uniform out of the province without permission and the Citizen also reported on this.

Mr. Cusson sued the Ottawa Citizen and other defendants (including a reporter and Mr. Cusson’s former supervisor at the OPP) for defamation. His claim for damages was:

$1,813,639.00 for past and future income
$350,000.00 for general damages
$700,000.00 for punitive damages, and
$100,000.00 for exemplary damages.

The trial took six weeks before a jury and Mr. Justice Robert Maranger in Ottawa. After five days of deliberation, the jury awarded $125,000 in general damages. Of that sum, the Ottawa Citizen was held to be responsible for $100,000 and the OPP supervisor for $25,000. The jury found that there had been no actual malice on the part of the defendants and did not award any special, aggravated or punitive damages.

Following the trial, counsel for Mr. Cusson sought costs totalling $665,265.66, but Maranger J. fixed the costs at $246,512.66.

On appeal, the Citizen argued that the trial judge had erred in not applying the defence of qualified privilege. It also claimed to have been entitled to invoke what is referred to as the “public interest responsible journalism defence”, which has been accepted in other jurisdictions. The Court of Appeal found that that defence should also be available in Ontario but concluded that it did not apply on the facts of this case. The defence is available to media defendants where they can show that they “met the standards of responsible journalism when reporting on matters of public interest”.

(The “public interest responsible journalism defence” had not been raised at trial. It was partly on this basis that the Court rejected it in the present case, saying that it would not be appropriate to “give the appellants another ‘bite at the cherry’.”)

The Court of Appeal, made up of Justices Robert Sharpe (who wrote the decision), Karen Weiler and Robert Blair (who concurred), undertook a detailed review of media defences in defamation actions, both in Canada and other countries. It noted that the Canadian caselaw has been “in a state of flux and evolution” as to whether newspapers and other media organs are to be treated differently from other defamation defendants. The Court concluded that they should be (although it held that the facts did not warrant the application of the special defences in this case).

The Court acknowledged that the law of defamation seeks to balance freedom of expression with an person’s interest in protecting his or her reputation. However, it elected to liberalize the law in Ontario by finding that “the inhibiting effect of traditional defamation law is incompatible with the climate of free and robust debate to which a democratic society aspires”.

The test to be applied in the “public interest responsible journalism” defence is this: “a media defendant must show that it took reasonable steps in the circumstances to ensure that the story was fair and its contents were true and accurate.”

Even though it did accept the validity (in principle) of the “public interest responsible journalism” defence, the Court of Appeal rejected the Citizen’s argument, that the defence of “qualified privilege” should be extended to all media reports on matters of public interest.

Today’s decision will undoubtedly come as good news to the media. Even though this particular appeal was lost, the ground-breaking decision of the Court of Appeal will benefit media defendants in future cases.

Posted in Defamation | Comments Off

Rule 53.03 Doesn’t Apply to Expert Witnesses Not Retained for Purposes of the Litigation

Posted on November 9, 2007 by Stephen Cavanagh

Subrule 53.03(1) of the Rules of Civil Procedure provides that, “[a] party who intends to call an expert witness at trial shall, not less than 90 days before the commencement of the trial, serve on every other party to the action a report, signed by the expert, setting out his or her name, address and qualifications and the substance of his or her proposed testimony.”

In Hall v. Karwartha Karpet & Tile, Mr. Justice Donald S. Ferguson had to consider the scope of that provision. As he characterized it, the issue in this case was “whether or not Rule 53.03 applies to a person with expertise who was involved in the history of the subject matter of the action or applies only to persons retained as experts by a party for the purpose of assisting in the litigation.”

The lawsuit arose out of a fire. The plaintiffs wished to call as a witness at trial an assistant fire chief who had investigated the fire and prepared a one-page occurrence report. As Ferguson J. observed, that report would not meet the requirements of Rule 53.03 because it did not set out the substance of, or basis for, the chief’s conclusions. Could the plaintiffs nevertheless call him as a witness? Justice Ferguson held that they could.

This decision will have broad implications for the conduct of civil litigation in this province, given the increasingly important role of expert witnesses.

In summary, Ferguson J. held:

Rule 53.08 [sic; His Honour refers repeatedly to this Rule, but it appears that he intended to refer to Rule 53.03] was intended to apply to persons with special expertise who are retained by a party to assist in litigation. Thus, subrule 53.03 does not even apply to this situation.
Section 12 of the Evidence Act, which provides that a party cannot call more than three expert witnesses without leave, does not apply to persons who were involved in the history of the matter. His Honour gave as examples the defendant in a professional negligence case against an engineer or a physician who had treated a personal injury plaintiff “in the normal course”.
A witness who has been involved in the history of the matter might not be qualified to testify as an expert, because of lack of independence. His Honour said that “a number of cases have now established that an expert has a duty to the court and must provide ‘independent’ opinion rather than just a ‘hired gun’ opinion for the purpose of assisting the party who retained him or her.”
Rule 53.03 was not intended to apply to witnesses where a party could not be expected or even be able to comply with the requirements set out above. This case was an example of that situation; the expert in question was fulfilling a duty by investigating the fire and preparing an occurrence report. The parties to the litigation would have no way of compelling him to prepare a report that satisfied the requirements of Rule 53.03.

This decision will have interesting consequences. It excepts from Rule 53.03 those experts who have become involved with a case other than through being directly hired for purposes of the litigation. How far does Justice Ferguson’s decision extend? For example, would a plaintiff be entitled to call as a witness his or her family doctor, with no notice to the defendant as to what that doctor will say in evidence, apart from what is contained in the doctor’s office chart?

It is likely that the number of experts called by parties will swell as a result Justice Ferguson’s decision that the Evidence Act‘s three-witness limit does not apply to many of them.

Finally, the ruling will probably mean that quite a few experts will be testifying at trial without at least one party (and possibly both!) knowing what they are going to say until they are in the box.

Posted in Evidence, Practice and Procedure, Trial Procedure | Comments Off

Soft Tissue Injury Found to Meet Bill 59 Threshold

Posted on November 9, 2007 by Stephen Cavanagh

Podleszanski v. Medley was a personal injury action arising out of a motor vehicle accident. Mr. Justice Alan W. Bryant ruled on a threshold motion brought by the defence while the jury was deliberating at trial. Holding that the plaintiff had a “particular vulnerability”, he ruled that the plaintiff’s injuries met the Bill 59 threshold.

The plaintiff’s vehicle had been rear-ended and the plaintiff suffered soft tissue injuries in various parts of his body, including his neck, back and shoulders.

At trial, the jury awarded $25,000 for non-pecuniary damages, $95,000 for loss of income and nothing for future income loss. (It is unclear whether this was before or after the statutory deductible.)

The plaintiff was a Polish immigrant who, at the time of the accident, worked as a shovelman on an asphalt crew. There was evidence that he had been a hard and reliable worker.

Medical evidence called by the defence at trial was to the effect that as a result of the accident, the plaintiff might have had a soft tissue injury to his neck and bruising of the sacrum, but that these injuries had long since healed. Even a doctor who examined the plaintiff at the request of his own counsel said that he could find no physical abnormalities and that the plaintiff “was an individual who has pain-focused behaviour and chronic pain syndrome”. However, that physician felt that the chronic pain syndrome prevented the plaintiff from performing the duties of his employment.

The plaintiff had been referred for psychological treatment as a result of his injuries, as he had experienced anxiety, depression and insomnia. The defence attempted to have a psychiatric assessment done but the plaintiff apparently believed that he was being mistreated by the examining psychiatrist. Justice Bryant said that “the length and type of psychiatric examination conducted by Dr. Notkin of a person of Mr. Podleszanski’s intellect and cultural background rendered Dr. Notkin’s assessment to be of little value to the court”.

The defence had surveillance videos of the plaintiff on the roof of his house, helping to lay sod in his yard and shovelling snow. The trial judge also found that the plaintiff had “provided incomplete medical histories and background information to some of the doctors which undermined his credibility”.

Justice Bryant said that the plaintiff “did not present well as a witness”. However, he went on to say that “the fact that the plaintiff’s soft tissue injuries are not objectively confirmed does not preclude recovery.”

Applying the threshold test in Meyer v. Bright, Justice Bryant found that the plaintiff met it:

The court finds that the plaintiff suffered soft tissue injuries as a result of the accident which he continued to suffer at the time of the trial. The plaintiff’s psychological condition (major depression and general anxiety disorder) was the result of the automobile accident and his particular vulnerability. The physical pain and psychological condition impair the plaintiff’s ability to return to his previous position or a similar type position. The plaintiff is capable of minimum wage employment that does not require heavy lifting (or where his employer accommodates his disability, as is the case with his present employer). The physical and psychological impairment interfered with the plaintiff’s ability to continue with his regular employment at Pave-All or at a similar physically demanding job and will continue for the foreseeable future.

Posted in Auto, Insurance News, Threshold | Comments Off

Master’s Decision Reviews Factors Influencing Changing Place of Trial Selected by Plaintiff

Posted on November 7, 2007 by Stephen Cavanagh

In Rushnell v. Corporation of the City of Belleville, the plaintiff had been struck by a bus owned by the City of Belleville. The accident had taken place there.

The plaintiff’s solicitors had named Toronto (where their office was located) as the place of trial. That was the only connection with Toronto.

The defendant moved to have the action transferred to Belleville. The plaintiff’s solicitor opposed the motion, arguing, among other things, the trial would be heard earlier in Toronto.

Master R. Dash noted that historically, courts would only rarely interfere with the plaintiff’s choice of the place of trial. However, in 2004, the Rules of Civil Procedure were changed to permit courts to consider balance of convenience as well as “the availability of court resources, the relative backlog of civil cases and the effect on other litigants of the allowing the case to remain at the venue named by the plaintiff”.

Subrule 13.1.02(2) sets out a number of criteria that are now to be taken into account and the Master reviewed each one, in the context of this case. He found that “the balance tips substantially in favour of Belleville” and that “[t]here is absolutely no connection between this action and Toronto other than the place where the plaintiffs’ lawyer carries on his practice and where he has chosen to retain non-treating experts.” He added that unless the delay is substantial, the opportunity of having an earlier trial date in Toronto should not outweigh the balance of convenience.

This issue arises fairly often, particularly where the plaintiff’s lawyer is in Toronto. Today’s decision is helpful as an indication of how the courts will now analyze the problem, in light of the changes to the Rules.

Posted in Practice and Procedure | Comments Off

Court Dismisses Uninsured Claim on Basis of Waiver of Subrogation Clause in Lease

Posted on November 2, 2007 by Stephen Cavanagh

Continue reading →

Posted in Contract, Insurance News, Subrogation | Comments Off

Court Applies Derksen to Order Defence by Both CGL and Auto Policies

Posted on November 1, 2007 by Stephen Cavanagh

In Derksen v. 539938 Ontario Limited, the Supreme Court of Canada ordered both an auto and a CGL insurer to defend a personal injury action. It determined that there had been concurrent causes of the injuries, one covered by the auto policy and the other by the CGL policy.

That decision was applied in Aviva Insurance Company of Canada Limited v. Pizza Pizza Limited by Madam Justice Beth A. Allen.

The plaintiff in the underlying action was struck by a Pizza Pizza delivery truck. In her statement of claim, she not only made the usual allegations of negligence relating to the operation of the vehicle. She also alleged that Pizza Pizza’s “30 minutes or free” policy encouraged its drivers to drive too quickly.

Pizza Pizza had a CGL policy with Aviva Insurance. That policy had an exclusion for “‘bodily injury’ or ‘property damage’ arising out of the ownership, use or operation by or on behalf of any insured of: … Any ‘automobile'”.

Pizza Pizza also had non-owned automobile coverage through ING Insurance. So, the dispute was which policy was triggered by this claim. Justice Allen held that both policies had to respond.

Her Honour held that the claim, as pleaded, might not fall within Aviva’s exclusion: “the pleadings do give rise to the possibility that the Plaintiff’s injuries were caused by Pizza Pizza’s delivery policy and failure to screen drivers’ driving records. I find that claim is independent of the claim that involves the use or operation of an automobile, and for that reason, falls outside the scope of the exclusion in Aviva’s CGL policy.” This finding engaged Aviva’s coverage.

ING argued that the allegations of negligent driving should be responded to by the driver, not by Pizza Pizza. However, the statement of claim alleged that Pizza Pizza was vicariously liable for the driver’s action (even though he was not an employee, but an independent contractor). On that basis, Justice Allen concluded that there was a possibility that ING’s policy would be triggered.

So, Aviva was ordered to defend Pizza Pizza on the non-auto related claims and ING was ordered to defend the automobile related claims.

Posted in Auto, CGL, Duty to Defend, Insurance News | Comments Off

Defendant’s Offer to Consent to Dismissal Without Costs Entitles It to Substantial Indemnity Costs

Posted on October 31, 2007 by Stephen Cavanagh

At the trial of Dunstan v. Flying J. Travel Plaza, a slip and fall case, the jury found that the defendant was not liable to the plaintiff. Accordingly, the action was dismissed. The trial judge’s disposition of the costs issue is of interest.

Prior to the trial, the defendant had offered to settle by dismissal of the action without costs. Following the trial, counsel for the defendant submitted that his client should receive costs on a partial indemnity basis to the date of its offer and on a substantial indemnity basis thereafter. Mr. Justice Robert J. Smith agreed.

Citing the Court of Appeal’s decision in S & A Strasser Ltd. v. Town of Richmond Hill et al., he reasoned that the costs consequences of Rule 49.10(2) only apply “when a defendant exceeds its offer to settle and where the plaintiff has recovered a judgment of some value”. Since the plaintiff in this case did not recover a judgment of any value, the Rule did not apply.

However, because Rule 57.01(1) provides that “the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing…”, His Honour concluded that “the court in exercising its discretion under Rule 57.01(1) may find it appropriate to award costs on a substantial indemnity basis from the date of the defendant’s offer to settle and the plaintiff did not recover a judgment of any value after trial”.

However, counsel for the defendant sought substantial indemnity costs based on an hourly rate of $525, even though the actual rate charged to the defendant was $400 or $450. (Both figures appear in the reasons, although it appears that $450 is the correct one, as Justice Smith fixed costs based on a substantial indemnity rate of $425, which is about 94.5 percent of $450 but would exceed $400.)

Counsel for the plaintiff argued that the defendant should receive only $14,667 for fees; the defendant sought fees of $123,433. Using what Smith J. described as “colourful language”, the plaintiff’s submissions said that “the court should not be ‘rubber stamping a bill of costs that itself, resembles a cash register slip, by a shopper who has gone on a spree and the losing party should not be treated as ‘a money tree to be plucked willy nilly by the winner of contest.'”

Although Justice Smith said that he agreed with both of those statements, he pointed out that the defendant had been forced to defend itself against a claim for approximately $1,000,000 that had been reduced to about $100,000 shortly before trial. The defence had had to retain engineering and medical experts. His Honour said the following:

[29] I find that the amount of costs awarded must bear some relationship to the amount of the claim made by a plaintiff in action as has been held by several other cases, however it is more difficult to take this approach when the defendant is required to defend a complex claim for a substantial amount of money. A defendant is required to expend reasonable amounts of time to properly defend the claim which is made against it. I find that where a plaintiff proceeds with a lengthy, complex proceeding in an attempt to recover a modest amount and the defendant is required to take reasonable steps to adequately and properly defend the case, then I find that it is reasonably foreseeable to the losing plaintiff to expect to pay a substantial amount of costs, commensurate with the time and disbursements that the defendant has been reasonably required to expend.

[30] The plaintiff cannot argue that nominal costs should be awarded because of the total absence of any recovery, by the plaintiff and where the defendant was completely successful, or argue that the amount involved was such that should the defendant should not have properly prepared the defence of the case. I find that the defendant was entitled to take reasonable steps to defend a claim and to introduce appropriate expert evidence and costs awarded must be reasonable and based on all of the circumstances, one of which is the amount of the claim.

In the result, Justice Smith awarded fees of $70,000 to the successful defendant.

Posted in Costs | Comments Off

CGL Exclusions Held Not to Apply

Posted on October 29, 2007 by Stephen Cavanagh

AXA Insurance (Canada) v. Ani-Wall Concrete Forming Inc. involved the familiar “your work”, “your product” and “rip and tear” exclusions in a CGL policy. A concrete forming contractor, Ani-Wall Concrete Forming, was alleged to have used defective concrete in constructing some foundations which then failed. Ani-Wall was sued. It sought coverage from its liability insurer, AXA Insurance. AXA denied the claim, relying on the above exclusions in the policy.

In this application to the court, AXA sought a declaration from Mr. Justice Paul Perell, that liability coverage under its CGL policy was excluded by any or all of the three provisions referred to above.

Ordinarily, in such circumstances, the court would be prepared to decide whether or not the insurer owes a duty to defend. That finding can be made on the basis of the pleadings, since the insured only has to show that there is a possibility that the claim will be within the coverage.

But deciding whether or not a particular exclusion applies is a different story. Usually, this can only be determined after a trial, because it depends on facts that are proved in evidence.

In this case though, Justice Perell took the somewhat unusual step of deciding on an application that none of the three exclusions upon which AXA relied was applicable to the claim. Accordingly, he dismissed AXA’s application. He said, “the case at bar is one of those cases where the coverage issue can be determined before trial. There is no appreciable controversy about the factual nexus, and I am told it would be helpful for the prospects of negotiating a settlement if the genuine dispute (which is to say, the not hypothetical dispute) about the three exclusions were resolved now.”

(Ironically, Ani-Wall and other parties involved in the underlying lawsuit had argued that it would be premature for the court to rule on the applicability of the exclusions prior to trial. Undoubtedly, they are now grateful that Justice Perell rejected their submissions.)

“Your work” exclusion

Justice Perell made short work of this exclusion. He referred to two well-known cases that have dealt with this exclusion: Alie v. Bertrand & Frère Construction Co. and Bridgewood Building Corp. v. Lombard General Insurance Co. His Honour noted that the AXA policy contained an exception to the exclusion, which provided that “this exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor”. On the facts of this case, Ani-Wall’s work had been performed by a subcontractor (Dominion Concrete), so the exception applied, thereby negating the effect of the “your work” exclusion.

Continue reading →

Posted in CGL, Exclusions, Insurance News | Comments Off

Cavillations