In Mazur v. Elias, the Court of Appeal has endorsed the notion of “co-ownership” of automobiles.
The case involves the often-seen fact pattern of a car being purchased by one person but licensed and insured in the name of another. Typically, the purchaser and principal (or exclusive) user is a young person who would face higher insurance premiums if he or she were to insure it. So, a parent is frequently asked to insure the vehicle at a lower premium. Continue reading
We are happy to report that The Canadian Legal LEXPERT Directory for 2005 lists Steve Cavanagh as a “Leading Practitioner” in “Civil Litigation—Commercial Insurance”, one of only five lawyers in eastern Ontario to be so recognized. Congratulations also to the other four Ottawa lawyers who made the LEXPERT list: David Scott, Q.C., Brian Parnega, Pat Santini and Bruce Carr-Harris. Continue reading
In finding that an insurer has a duty to defend a sexual abuse claim, a Superior Court judge took the unusual extra step of allocating defence costs: 20% payable by the insurer and the 80% by the insured.
The case is Sommerfield et al. v. Lombard Insurance Group. Sommerfield and the other plaintiffs in this action were teachers at Upper Canada College between 1986 and 1990. They and the school are being sued by a former student for sexual abuse. Continue reading
It is not uncommon these days to see parties, usually defendants, ask for a “bifurcated trial”. In most cases, this means that liability would be tried first and then damages would be assessed at a later date, in a second trial. The expectation (or hope) is that the liability trial will be relatively short and inexpensive and that once that issue has been determined, the damages can be settled. This would avoid a trial of damages, which generally takes much more time to complete.
The Divisional Court has refused the defendants’ request for a bifurcated trial in Carreiro v. Flynn. This was an MVA case arising out of a young child running into the street from between some parked cars. She was catastrophically injured. The liability trial was estimated to take three or four days but a trial on damages would occupy at least three weeks. Accordingly, the defendants moved for an order that the trial be bifurcated, with liability to be tried first.
A complicating factor in this case is that both sides had served jury notices. So, if the court had ordered bifurcation, different juries would decide liability and damages. Not surprisingly, the plaintiffs wanted the same jury to hear both aspects of the case.
The Divisional Court upheld the judge at first instance, who had refused the request to bifurcate. The Court felt that it was not appropriate to split this case (rejecting as “purely speculative” the suggestion of defence counsel, that the whole case would “likely settle” after the liability trial). But it went further and endorsed caselaw which had held that bifurcation is never available where a jury notice has been served. The Divisional Court left the door open a crack, saying that there might be cases, even jury cases, where bifurcation is appropriate, but that this was not one of them.
Regular readers of our Updates know that just when insurance defence lawyers and their clients were beginning to despair of ever winning a threshold motion, a series of decisions were handed down that favoured the defence. But a Superior Court ruling published today has interrupted the winning streak for insurers. Nevertheless, there was a silver lining for the defence in today’s case, because the jury’s award was very small and, it appears, may be reduced to zero through the combined effect of the Insurance Act deductible and the collateral benefits that the plaintiff has received.In Fasfous v. Provigo Distribution Inc. et al., Madam Justice Stewart of the Superior Court dismissed a threshold motion brought at trial, just minutes before the jury returned. In today’s ruling, she set forth her reasons for her decision on the threshold issue. Continue reading
By now, you have probably heard of last week’s decision of the B.C. Supreme Court in Laface v. McWilliams et al. This was a case in which a drunk driver drove into a group of pedestrians, causing some serious injuries. The driver had been drinking at the Steveston Hotel. The case has attracted a lot of media attention because the trial judge, Madam Justice P.A. Kirkpatrick, imposed 50% liability on the hotel. No Canadian court has ever found such a high degree of liability on a commercial host.But when the actual reasons for judgment of Justice Kirkpatrick are studied, it is clear that the case breaks no new legal ground. Rather, the judge’s findings stem from the application of well-established legal principles to a set of facts so extreme that we are unlikely to see anything like them again.The decision also suggests that the trial strategy of the hotel failed spectacularly. In her reasons, Justice Kirkpatrick spoke of the “despicable” nature of one submission made on behalf of the Steveston Hotel. Other arguments advanced by Steveston were described as “startling”, “astonishing” and “outrageous”. Speaking of the hotel’s witnesses, the judge said she had “no confidence” in their credibility. She went further and said that she “cannot rule out the possibility that they simply have chosen to lie and conceal their actual observations”.The driver, McWilliams, had a blood alcohol reading of more than twice the legal limit. When he emerged from the hotel after drinking there that night, he was staggering. What sealed the fate of the Steveston Hotel is what happened when one witness observed McWilliams lurching about in the hotel’s parking lot. A 17 year old girl named Robyn Strang encountered McWilliams, whom she knew. She said that McWilliams “kept stumbling over to me until he actually had to put his hands on my shoulder and be that far away to know who I was”. By “that far away”, she said, she meant “face to face. Like, right in front of me.”Asked what she had noticed about McWilliams, she said: “that he was really, really, really drunk”.This is where it got really, really, really bad for the Steveston Hotel.Williamson was trying to get into his car to drive away. Ms.Strang tried to prevent him from doing so. She attempted to take his keys away from him, but was unsuccessful. She then took the initiative of steering him back into the hotel. Initially, the doorman refused to let the two of them back in, because the establishment was closing, but when she said that McWilliams was drunk and that she was looking for someone to drive him, the doorman relented.Once inside the bar, Ms. Strang first tried to get one of Williamson’s friends to drive him. Again, she was unsuccessful. What followed was undoubtedly the key piece of evidence against the hotel:She said she yelled “at the top of her lungs”: “Is anyone going to help me find someone to drive his car for him?” She said that people looked at her and then looked away. No one offered to help her. She walked out of the pub.McWilliams got into his car and drove off. The accident happened within a few blocks.In finding liability against the hotel, the trial judge relied heavily on Ms. Strang’s evidence:However, the most compelling piece of evidence is the hotel’s actual, specific notice that there was an impaired patron on the premises who intended to drive. Ms. Strang was only 17 years old at the time, but she did everything that could reasonably be expected of her in notifying the pub of Mr. McWilliams’ state of inebriation. She specifically told the doorman that Mr. McWilliams was drunk and needed to find someone to drive his car for him. She shouted “at the top of her lungs” asking for assistance with the person who she knew was incapable of driving.There was other evidence that indicated that the hotel was “a good place to go if you wanted to get drunk”. As well, the credibility of the hotel’s witnesses was impeached over and over again, in ways that we won’t go into here. But it was the evidence of Robyn Strang that was key to finding the hotel 50% at fault.If a licensed establishment should ever again be unlucky enough to be faced with such extreme facts against it, a similar finding of liability should be expected.
Many people who deal with personal injury damages claims (including lawyers and judges) don’t know (or don’t know that they don’t know) how to calculate prejudgment interest. This edition of the CW Update will summarize the applicable rules.
The Courts of Justice Act
The basic statutory provisions are found in ss. 127-128 of the Courts of Justice Act. The first thing to realize is that the entitlement to prejudgment interest doesn’t arise until there is “an order for the payment of money”. Of course, claims are settled every day without there being any such order. Lawyers and adjusters simply calculate the interest that would be payable if there were an order and settle the case accordingly.
The Act sets out a basic rate of prejudgment interest for all types of damages. That rate, called (naturally) the “prejudgment interest rate” is calculated according to a formula set out in s. 127. Many people don’t realize that the rate is based, not on when the cause of action arose, but on when the proceeding was commenced. The rate is published for each quarter of each year, beginning in 1989.
So, for example, if the proceeding (that is, the lawsuit) was commenced on November 4, 2003, the prejudgment interest rate is 3.3 percent. This is because the date falls in the last quarter of 2003. The rate for the previous quarter (the third) was 3.5 percent.
The Ministry of the Attorney General publishes these rates on its website. You can view them by clicking this link. But remember that, to use the table, there must be a proceeding that has already been commenced.
Interest runs from the date the cause of action arose to the date of the order for the payment of money (s. 128(1) of the Courts of Justice Act). Generally speaking, the cause of action “arises” when all facts necessary to constitute the action have occurred.
There is an exception to the commencement date rule for claims arising of the operation of a motor vehicle. This will be discussed below. But if you are dealing, for example, with an occupier’s liability case, interest will typically run from the date of the accident that caused the injury.
Non-pecuniary General Damages in Personal Injury Actions
There is a special rate prescribed for damages for non-pecuniary loss in actions for personal injury (MVA or otherwise). That rate is 5% per annum, regardless of when the action was commenced (Rule 53.10 of the Rules of Civil Procedure).
We frequently see this same rate applied to all damages in personal injury actions, but that is incorrect. For damages other than non-pecuniary general damages, the provisions of the Courts of Justice Act apply.
Special Damages
The Courts of Justice Act contains a different provision for “special damages” or “past pecuniary loss” (both terms are used in s. 128(3) of the Courts of Justice Act). This would apply, for instance, to claims for pre-trial income loss. In these types of claims, interest is to be calculated at the end of each six-month period. The purpose of this provision is to recognize that some types of loss or expense are not incurred all at once, so it would be unfair to award interest for a period before there has been a loss.
Calculating the interest at the end of each six-month period can be cumbersome. Fortunately though, the Court of Appeal, in the 1985 case of Borland v. Muttersbach, ruled that instead of calculating interest this way, it is a permissible shorthand approach to apply a rate one-half that otherwise applicable. So, if an action was started on November 4, 2003 and the claim included one for past pecuniary loss, the rate otherwise applicable is, as we saw above, 3.3 percent. Dividing this by two gives us 1.65%, and that would be the correct rate to use for past pecuniary loss in such a case.
Now, some pecuniary losses are incurred all at once rather than over time. In those cases, a court would likely not use the “one-half” rate discussed in the last paragraph. The full rate would probably be applied.
Miscellaneous Rules
Before we turn to the specialized subject of motor vehicle cases, some other things to remember:
MVA Claims
The Insurance Act contains some special provisions that apply “in an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile” (Insurance Act, s. 258.3(8). As we have seen, under the Courts of Justice Act, interest is payable from the date on which the cause of action arose. But in BI or fatal claims arising out of automobile accidents, the Insurance Act provides that “no interest shall be awarded under s. 128 of the Courts of Justice Act for any period before the plaintiff served the notice under clause (1)(b)”. The notice referred to is “written notice of the intention to commence the action on the defendant within 120 days after the incident or within such longer period as a court in which the action may be commenced may authorize, on motion made before or after the expiry of the 120-day period”.
So, s. 258.3(8) of the Insurance Act varies the period during which prejudgment interest is recoverable. It has no effect on the rate. The latter is determined by either the Courts of Justice Act or, in personal injury cases, by Rule 53.10.
Postjudgment Interest
Once an order has been made, for the payment of money, it attracts postjudgment interest. This is an entirely different thing from prejudgment interest. It need not be claimed. It runs from the date of the order. The court will automatically apply when the judgment is signed and entered at the court office. However, a judge does have discretion to order a different rate, period, etc. than would otherwise apply. In practice though, this rarely happens.
Insurance Coverage Issues
A number of cases have held that a motor vehicle liability insurance policy’s limits include prejudgment interest. (See, for example, Allstate Insurance Co. v. Lappalainen, [1984] O.J. No. 428, Kosanovic v. Wawanesa Insurance, [2002] O.J. No. 4131.) So, by way of example, if the policy limits are $1 million and the judgment is for $900,000 plus prejudgment interest of $150,000, the policy would indemnify for the damages of $900,000 plus $100,000 of the $150,000 in prejudgment interest. At that point, the limits would be exhausted and the insurer would have no further obligation for prejudgment interest. The situation is different for postjudgment interest, as discussed below.
Therefore, for purposes of evaluating whether or not a claim potentially exceeds an insured’s liability limits, it is necessary to add up all of the claims for damages and then calculate what the interest on the various heads of damages would be, as of the estimated date of trial. In our experience, this is often overlooked. Continue reading
A just-released Superior Court decision reminds us that defendants are not automatically entitled to have a personal injury plaintiff examined by multiple medical practitioners, from various disciplines. They must establish, through evidence, why such examinations are needed. Continue reading
In the space of a week, two appellate decisions have dealt with relief from forfeiture. First, the Supreme Court of Canada issued its ruling in Marche v. Halifax Insurance (about which we sent an Update last week).
Today, the Court of Appeal has released its reasons in McEnaney v. General Accident Assurance. Continue reading
The Ontario Superior Court has ruled that TD General Insurance Company owes a duty to defend a liability claim arising out of a snowmobile accident, despite the company’s contention that it did not insure the owner of the snowmobile.