C.A. Rules Definitively On Limitation Period for Claim Under Underinsured Endorsement

Posted on May 27, 2012 by Stephen Cavanagh

In Roque v. Pilot Insurance Company, 2012 ONCA 311 (CanLII), the Court of Appeal dispelled any doubt about when the limitation period commences to run for a claim against an insurer that provides underinsured motorist coverage. It agreed with Master Ronald Dash’s conclusion, in McCook v. Subramaniam, 2008 CanLII 59323 (ON SC): “[t]he plaintiff’s case runs from when he has a body of evidence accumulated that would give him a ‘reasonable chance’ of persuading a judge that his claims would exceed $200,000.”

The limitation period in the underinsured motorist endorsement (OPCF-44) reads as follows:

Every action or proceeding against the insurer for recovery under this change form shall be commenced within 12 months of the date that the eligible claimant or his or her representative knew or ought to have known that the quantum of claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred, but this requirement is not a bar to an action which is commenced within 2 years of the date of the accident.

It rejected the argument that the limitation period only starts to run when the plaintiff’s damages have been quantified by settlement or judgment. It also rejected an alternative submission, that “the limitation period does not begin to run until the plaintiff knows that the quantum of the claim is greater than the tortfeasor’s insurance coverage”.

This is a problematic ruling for plaintiffs’ lawyers. The commencement date found by the Court of Appeal to apply is so subjective (and therefore uncertain) that most actions against underinsured insurers will probably be routinely commenced at the same time as the proceeding against the at-fault party.

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FLA Plaintiff Can Be Added After Limitation Period If Main Action Commenced In Time

Posted on May 27, 2012 by Stephen Cavanagh

In Wilson v. Arseneau, 2012 ONSC 2879 (CanLII), Mr. Justice John McDermot held that a statement of claim can be amended to add a claimant under the Family Law Act more than two years after the accident giving rise to the claim, provided that an action has been commenced within the limitation period by the person from whose injury or death the FLA claim is derived. His conclusion appears in the following passage: “It therefore appears to me that a derivative action under the Family Law Act may be added to the main action outside of the limitation period by way of amendment so long as the main action is properly constituted.”

Justice McDermot does not appear to have cited any authority in support of this proposition, but there is at least one decision that came to the opposite conclusion.

In Tikhanova v. Covelli et al., 2004 CanLII 27026 (ON SC), Master Hawkins refused to allow an amendment to add an FLA claimant to an existing action after the limitation period had expired.

Justice McDermot also based his decision on the discoverability principle. The facts of this case were quite unusual. The principal plaintiff, who had originally been injured in a motor vehicle accident, killed herself after an action had been commenced on her behalf. In her suicide note, she said, “that the “insurance company killed me” and that “[t]he car accident pushed me over the top, caused me to drown”. His Honour concluded that the suicide was a “triggering event”, such that the FLA claim only became discoverable at that point.

This raises an interesting point: who would be the appropriate defendant in an action for damages based on the suicide? Could it really be said that the plaintiff’s suicide was an event reasonably foreseeable to the motorist who was involved in the collision giving rise to her original claim? Or should the claim arising out of the suicide properly (if there is any “proper” claim) be brought against the insurer that conducted the defence of her claim?

Finally, Justice McDermot also cited the Supreme Court of Canada’s decision in Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549 for the proposition that the FLA claim might only have become discoverable once the damages increased beyond the Insurance Act deductible upon the plaintiff’s suicide. This again raises the issue of who is the proper defendant to this claim.

All in all, lots of questions, most arising out of the very unusual facts. But the first ground for Justice McDermot’s decision, that an FLA claim can be brought outside the limitation period if the main plaintiff sues in time, has broad application and deserves appellate attention.

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Insurance Provisions in Lease Held Not To Preclude Action by Lessor Against Lessee

Posted on May 27, 2012 by Stephen Cavanagh

UPDATE: At the end of 2012, the Court of Appeal allowed (in part) an appeal from this decision. The brief reasons are here. The Court said that “the applicable jurisprudence is unsettled”. It went on to conclude the following:

Based on the record before us and the state of the jurisprudence, it is not plain and obvious whether the lease contained a covenant to insure for the loss claimed by the respondent. Accordingly, paragraph 1 of the judgment, which addresses this issue, is set aside without prejudice to the parties to advance their respective positions at trial.

It reversed Justice Métivier’s finding, that the lease did not contain an express or implied covenant to insure. However, it agreed that the action should be permitted to proceed.

This is a disappointing and unhelpful decision. Isn’t the clarification of unsettled jurisprudence one of the important functions of the Court of Appeal? And what additional information is likely to emerge at trial that will shed light on the meaning of the lease between the parties in this case?

My original post follows.

In Cain v. 1150320 Ontario Inc. (The Antique Shoppe), 2012 ONSC 3018 (CanLII), Madam Justice Monique Métivier dealt with the recurring question of whether insurance provisions in a lease preclude suit by the landlord against the tenant for damage to the landlord’s property.

Here, an above-ground oil tank belonging to the tenant leaked and the landlord sued for damages. The tenant moved under Rule 21 for dismissal of the action on the basis that the insurance provisions in the lease resulted in the landlord having waived the right to sue.

Justice Métivier summarized the requirements in such cases as follows:

To escape liability, the tenant must show either:

(1) clear wording in the lease of a covenant on the part of the landlord to insure against the specific peril; or;

(2) that the tenant is responsible for the payment of the insurance premiums for coverage for the specific peril, and is therefore entitled to the benefit of the insurance for which it paid.

Here, Her Honour held that the tenant had failed to establish either of the two.

With respect to the former, Justice Métivier elaborated:

[19] That principle is grounded in the fact that the covenant to insure by the landlord is a contractual benefit for the tenant. It is an assumption of risk by the landlord of the risk of loss or damage caused by the peril to be insured against. This is so no matter how the peril is caused, even if by negligence.

[20] In the absence of facts where specific losses are set out in the covenant to insure, ordinarily a tenant is responsible for damages caused by its own negligence. [Emphasis in original]

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A New Approach To Bifurcation?

Posted on May 27, 2012 by Stephen Cavanagh

Mr. Justice Robert Smith of the Superior Court released a decision last week that might signal a new approach to the bifurcation of trials. In Wang v. Byford-Harvey et al., His Honour ordered the bifurcation of a personal injury trial, such that the liability issue will be tried first and damages at a later date. In reaching his conclusion, Justice Smith laid fairly heavy emphasis on the potential saving of judicial resources and the resulting benefit to the public.

(Full disclosure: I represent one of the defendants in the action, but this motion was argued principally between the plaintiffs on one side and the co-defendants on the other.)

I don’t know if my experience is unique, but I went through most of my career without ever having a trial bifurcated. Suddenly, within the last couple of years, bifurcation orders have been made in several actions in which I have been involved and bifurcation has been proposed in a number of others.

This action arose out of a motor vehicle accident in which the main plaintiff had been rendered a paraplegic. The trial had been scheduled for January, 2013 and was expected to last six weeks. Some of the defendants, who argued that the plaintiffs’ case against them was tenuous, sought an order that the issue of liability be tried first. The plaintiffs opposed the motion.

As a result of Justice Smith’s order, liability will be tried this fall with the damages trial, if one is required, to be held in January, 2013.

There is actually a Rule that came into effect in 2008, that specifically provides for bifurcation, but only on consent of the parties. Rule 6.02 provides as follows:

With the consent of the parties, the court may order a separate hearing on one or more issues in a proceeding, including separate hearings on the issues of liability and damages.

Justice Smith’s reasons make no reference to this rule (the order was certainly not on consent) and it was not argued on behalf of the plaintiffs, that Rule 6.02 had “occupied the field” and that the court has no power to make a bifurcation order in the absence of consent.  Continue reading →

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A Time To Every Purpose Under Heaven

Posted on May 27, 2012 by Stephen Cavanagh

The calculation of periods of time specified in statutes, rules and contracts is a continuing source of anxiety for lawyers. Filing a document one day late can have dire consequences. But figuring out just what is one day late is not always that easy to do.

In Barzo v. Lanari, 2012 ONSC 2327 (CanLII), RSJ Hackland had to interpret statutory condition 11, prescribed for automobile insurance policies by s. 234 of the Insurance Act. I initially wrote a post in which I said that I disagreed with  Justice Hackland’s calculation of the notice provisions set out in that section. However, since writing that post, I was contacted by Allison Klymyshyn, one of the lawyers for the insurer. Allison has persuaded me that I was wrong and that RSJ Hackland (as well as Mitch Kitagawa and Allison Klymyshyn) were correct in their interpretation.

Statutory condition 11 deals with the termination of a contract of insurance by the insurer for the reason of non-payment of the whole or any part of the premium. The relevant part of statutory condition 11 reads as follows:

(1.2) Subject to subcondition (1.7), if the insurer gives a notice of termination under subcondition (1) for the reason of non-payment of the whole or any part of the premium due under the contract or of any charge under any agreement ancillary to the contract, the notice of termination shall comply with subcondition (1.3) and shall specify a day for the termination of the contract that is no earlier than, (a) the 30th day after the insurer gives the notice, if the insurer gives the notice by registered mail.

Statutory condition 11(5) deems the effective date of notice, given under the preceding section, to be the day after the day of mailing:

(5) For the purpose of clause (a) of subconditions (1.1) and (1.2), the day on which the insurer gives the notice by registered mail shall be deemed to be the day after the day of mailing.

In this case, Perth Insurance Company had sent notice of termination, by registered mail. Non-payment of premium was the reason for termination. The date of the letter was apparently July 5, 2007 and it specified 12:01 a.m. on August 4, 2007 as the effective time of termination. (The date of the letter does not actually appear in the reasons, but I infer that it was July 5, 2007.) Continue reading →

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C.A. Says Bad Faith Action Against Auto Insurer Not Subject to Limitation Period in Policy

Posted on April 8, 2012 by Stephen Cavanagh

The Court of Appeal’s decision in Dundas v. Zurich Canada, 2012 ONCA 181, is interesting for a couple of reasons: liability of an insurer for failing to pay its policy limits into an interest-bearing account and the limitation period that applies to a bad faith claim against an auto insurer.

Here, the underlying action alleges liability on the part of an auto insurer, for having failed to pay its policy limits into an interest-bearing account, for the benefit of injured claimants who were suing its insureds. While I’ve seen this issue raised several times before and I’m aware of one case in which a judge commented on it (Drummond v. Fortune, 1994 CarswellOnt 3964 (Ont. Ct. (Gen. Div.)), I hadn’t seen a case in which the question was raised directly as a basis for liability: is there an obligation on the part of a liability insurer to pay its policy limits into an interest-bearing account, for the benefit of claimants?

That question isn’t answered by the Court of Appeal decision. Rather, the question that arose here was whether the claim against the insurer was prescribed. The Court rejected the view of the court below, that the claim was barred by a one-year limitation period found in the policy. Instead, it held that the claim against the insurer was not an “action or proceeding against the Insurer under [the insurance contract] … in respect of the loss or damage to person or property” within the meaning of statutory condition 6(3)”. Therefore, the contractual limitation period (one year from the date on which the cause of action arose) did not apply.

It also held that the cause of action against the insurer was only complete when the insurer had an obligation to indemnify its insured.

The plaintiffs in the case had obtained judgment against Zurich’s insureds, for an amount slightly in excess of $2 million. Zurich’s policy limits were $1 million.

The following facts are relevant, to be able to understand the decision:

  • The case arose out of a car accident in which the driver and three passengers died. The families of the deceased passengers sued the estate of the driver;
  • On May 27, 1992, one group of plaintiffs offered to settle the quantum of damages at $1,657,032 (exclusive of interest and costs);
  • On April 6, 1993, the independent counsel for the driver’s estate agreed with the assessment on behalf of the estate;
  • On October 12, 1993, counsel for the parties met in chambers with Kennedy J., where minutes of settlement were entered into, with damages quantified as above;
  • On December 3, 1993, the parties attended again before Justice Kennedy, to make submissions about prejudgment interest and costs. On that occasion, it was argued that Zurich had breached its duty of good faith to its insured, by not having settled the plaintiffs’ claims promptly and by having failed to pay its policy limits into an interest-bearing account and making that interest available to the claimants;
  • On December 23, 1993, Zurich paid its limits into an interest-bearing account;
  • On March 29, 1994, Zurich paid out the limits in agreed-upon proportions;
  • On November 25, 1994, Justice Kennedy issued an endorsement dealing with interest and costs (almost a year following argument, it appears) and in his ruling, made some comments critical of Zurich’s failure to pay the policy limits into an interest-bearing account earlier than it did;
  • On December 21, 1994, Justice Kennedy’s endorsement was sent to the lawyer for Zurich, who immediately sent it to the lawyer for the insured’s estate; and
  • Consent judgments were taken out on August 21, 1995.

The insureds assigned to the plaintiffs their right to sue their insurer, Zurich, in exchange for a release of claims against the estate.

The plaintiffs sued Zurich on August 19, 1996, alleging breach of a duty of good faith owed to its insured (which had assigned to the plaintiffs its right to sue Zurich).

The motions judge, Mr. Justice Terrence Patterson, had held that the action was prescribed, based on the one-year limitation found in the statutory conditions of the standard auto policy (“in respect of the loss or damage to person or property [action] shall be commenced within one year next after the cause of the action arose”). His Honour held that the insured’s estate had known, at the latest, by December 21, 1994 (when its lawyers received Justice Kennedy’s endorsement, criticizing Zurich), that it had a possible claim against the insurer. On his analysis, the limitation period would have expired not later than December 21, 1995, making the action by the assignees out of time.

However, the Court of Appeal said, first of all, that the one-year limitation period did not apply. This was, it said, not a claim under the insurance contract at all. “On the contrary, this action contains a claim for breach of the independent duty of the utmost good faith, which an insurer owes to its insured. In Whiten v. Pilot Insurance Co., 2002 SCC 18 (CanLII), [2002] 1 S.C.R. 595, at para. 79, Binnie J. described the duty as ‘independent of and in addition to the breach of contractual duty to pay the loss’.”

For that reason, the applicable limitation period was held to be six years.

However, the Court of Appeal also allowed the appeal on the basis that the motions judge (sometimes referred to in the reasons as “the trial judge”) had interpreted the statutory conditions incorrectly. It held that the cause of action against Zurich did not arise until a point “when the liability of the Reid estate had been finally ascertained by judgment after trial or by settlement between the parties with the consent of the insurer”, which “[o]n the facts… did not occur until the issues of interest and costs had been resolved by the consent judgments that were taken out on August 21, 1995. It was at this time that the Reid estate had a liability to pay the third parties and it was at this time that it was entitled to demand indemnity from Zurich.”

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Recent “additional insured” decisions continue confusing Ontario jurisprudence

Posted on April 8, 2012 by Stephen Cavanagh

In various contractual settings, one party assumes an obligation to have the other included in the former’s insurance policy as an “additional insured”. This has been a fertile source of work for lawyers practising in the insurance field because the process is often handled badly at one stage or another, resulting in litigation.

Unfortunately, the caselaw that has developed in Ontario has been somewhat inconsistent and, in a number of instances, has failed to address some key issues.

“Additional insureds” are a particular interest of mine so I will forewarn the reader that this post is considerably longer than usual.

This post was prompted by two very recent decisions. One came from the Court of Appeal: 1540039 Ontario Limited v. Farmers’ Mutual Insurance Company (Lindsay), 2012 ONCA 210 (CanLII). The other was a decision of Mr. Justice Stanley Kershman in Minto Developments Inc. v. Carlsbad Paving et al., 2012 ONSC 1574 (CanLII). I have some difficulties with both decisions.

1540039 Ontario Limited v. Farmers’ Mutual Insurance Company (C.A.)

In this case, a shopping centre tenant (“Design Depot”) had agreed, under the terms of its lease, to have its landlord named as an additional insured under a comprehensive general liability policy that it had with Farmers’ Mutual Insurance Company (Lindsay). A man was electrocuted while he was working on a pylon sign located in front of the plaza in question. His family members sued the landlord, alleging that it had been the owner and occupier of the plaza and had been negligent in its placement of the sign, had failed to warn of the danger posed by the sign and other similar allegations.

Hydro One was also sued (as owner of the hydro lines above the pylon sign), as was another person (“TRJ Signman”) who was alleged to have subcontracted to the deceased the work that led to his death.

The landlord sought to have the tenant’s insurer share in the cost of its defence. The tenant had not been sued, nor had any allegations implicating it been made in the pleadings.

However, the landlord had attempted to place before the court affidavit evidence to the effect that it had been the tenant, Design Depot, that had retained the deceased (or caused him to be retained), to place a sign advertising its business. The judge who had heard the application had refused to admit this “extrinsic evidence” because he considered that it would require him to make findings that would affect the underlying litigation. He would not have allowed the application, even if the extrinsic evidence had been admitted.

The landlord appealed to the Court of Appeal. The appeal was dismissed.

Much of the Court of Appeal’s decision had to do with the line of cases that have considered when and to what extent extrinsic evidence should be considered on a pleadings motion and, in particular, in deciding when a duty to defend has been triggered. I am not going to get into a discussion of those cases here, other than to say that I agree that the affidavit evidence tendered in this case did seem to go beyond the limits that have traditionally been established. Instead, I will focus on the aspects of the case that are relevant to the law relating to “additional insureds”.

For once, there seems to have been an actual additional insured endorsement issued by the insurer in this case. The endorsement cross-referenced the policy declaration, which provided that the landlord was an additional insured under the tenant’s policy “as landlord only”. According to the reasons of the Court of Appeal, once the cross-referenced passages were incorporated into the Endorsement, the latter would read as follows:

It is Hereby Understood and Agreed that [the appellant landlord] is added as an Additional Insured for the term of as of April 9, 2007 to January 14, 2008 but, only with respect to liability arising out of operations by or on behalf of Design Depot for interior decorating—home decor.

It is Further Understood and Agreed that the Additional Insured shall not be covered for other than “Insured Contract” as defined in the Insuring Agreements. [Emphasis added.]

(This seems a little surprising to me: the end result of the cross-referencing appears to have yielded a result that is quite a bit more restrictive than being insured “as landlord only”.)

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Master Pope Refuses To Add Insurer in OPCF-44R Claim

Posted on March 26, 2012 by Stephen Cavanagh

Vogler v. Lemieux, 2012 ONSC 1692 is an interesting case and, to me, a bit puzzling. I am hoping that one of the readers of this blog can clear things up for me.

The plaintiff was injured in a single vehicle accident in 2006. He was the owner of the car, which was insured with Allstate. After the accident, the plaintiff was found alone in the passenger seat. He claimed to have no recollection of the accident or the events leading up to it. Although the plaintiff claimed that someone else had been operating his car, he was charged with impaired driving.

The plaintiff sued Allstate under the unidentified motorist coverage. After that action was underway, an individual named Lemieux came forward and admitted to being the driver of the car at the time of the accident.

The impaired driving charges were dropped against the plaintiff. Lemieux was added as a defendant in the lawsuit, in place of Allstate. However, Allstate denied coverage to Lemieux, on the basis that his licence had been under suspension for many years, which was a breach of statutory condition 4. Allstate had itself added to the action as a statutory third party.

Apparently, counsel for the plaintiff then proceeded on the assumption that because of Lemieux’s policy breach, the most that the plaintiff could recover in the lawsuit was the statutory minimum limits of $200,000, for which Allstate would have been absolutely liable under s. 258(4) of the Insurance Act. After the pre-trial though, the plaintiff’s lawyer “determined that the plaintiff would have to access his underinsured coverage on the basis that a violation of the O.A.P. 1 Ontario Automobile Policy by Lemieux for being unlicensed would not disentitle the plaintiff access to his OPCF 44R Family Protection Coverage”. As a result, this motion was brought for leave to add Allstate as a defendant, with a claim being made against it pursuant to its underinsured coverage in the OPCF-44R endorsement.

Master Pope dismissed the motion. She concluded that in light of the definition of “inadequately insured motorist”, the claim against Allstate could not succeed. Master Pope accepted Allstate’s argument, which she summarized as follows:

Allstate submits that if it is found that Lemieux was driving the plaintiff’s vehicle, and aside from the fact that his liability coverage may be reduced to $200,000 on the basis that he had a suspended license breaching Statutory Condition 4 – Authority to Drive of the Standard Automobile Policy – OAP1, the plaintiff will be unable to prove that Lemieux meets the definition of “inadequately insured motorist” because the definition states that an inadequately insured motorist means “. . . the identified driver of an automobile for which the total motor vehicle liability insurance . . . obtained by the owner or driver is less than the limit of family protection coverage.” In other words, since the motor vehicle liability insurance obtained by the owner, here the plaintiff of $1 million, is equal to the limit of family protection coverage of $1 million, the definition of “inadequately insured motorist” as set out in s. 1.5(a) cannot be met.

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Rule 53.03 Applies Only To “Litigation Experts”

Posted on March 21, 2012 by Stephen Cavanagh

In Continental v. J.J.’s Hospitality, 2012 ONSC 1751 (CanLII), Mr. Justice Edward J. Koke has provided the latest judicial interpretation of Rule 53.03, which deals with the evidence of expert witnesses. He held that that rule only applies to “litigation experts”, i.e., those who are hired expressly for the litigation and who have no other involvement with the subject matter of the suit.

In this case, the plaintiff roofing company, Continental, contracted to do work on the defendant’s building. During the course of the work on the defendant’s roof, substantial damage resulted from a leak. The roofer sued for the contract price and the defendant counterclaimed for compensation for the damage to its building.

Both before and after Contintental began its work, the defendant had enlisted the assistance of one Bruce Caughill, an architect and engineer, to act as a consultant about the roof. He had undertaken inspections and had made recommendations with respect to repair or replacement of the roof.

Mr. Caughill had prepared a number of reports for the defendant that were served on Continental. The defendant plans to call Mr. Caughill to give opinion evidence at the trial, scheduled for August, 2012. On this motion, Continental asked for an order that the reports and the testimony of Mr. Caughill were inadmissible.

Continental argued that:

  • Mr. Caughill’s evidence was not necessary as it was not outside the experience or knowledge of the trial judge;
  • he had opined on the “ultimate issues”, thereby usurping the role of the trial judge; and
  • he was biased in favour of the plaintiff, due in part to his long business relationship with it.

Although the reasons do not address the question, it appears that the defendant had made no attempt to have the witness sign a Form 53, the acknowledgement of an expert’s duty.

Justice Koke reviewed the genesis of the 2010 reforms to Rule 53. The rule now sets out requirements governing the contents of an expert’s report and provides for the signing of the acknowledgement of an expert’s duty. Rule 4.1.01 is also new: it codifies “the duty of an expert”.

He then considered the question, “To Whom Does Rule 53.03 Apply?” This issue has received quite a bit of attention from the courts lately and Justice Koke discussed the jurisprudence, which has dealt with the testimony of treating health practitioners (Slaght v. Phillips and Burgess v. Wu), official investigators (Hall v. Kawartha Karpet & Tile Co.), and practitioners who assess claimants for accident benefits insurers (McNeill v. Filthaut). He observed that “[r]ecent cases have held that Rule 53.03 is limited in its application to witnesses who are hired as ‘litigation experts’ and have not had any involvement with the subject matter of the litigation or either of the parties.”

His Honour concluded that Rule 53.03 was not intended to apply to experts such as this one, who have not been retained as “litigation experts”:

The amendments to the rule were intended to eliminate the use of “hired guns” or “opinions for sale” in civil litigation, which resulted in potentially biased evidence being given at trial. In the case of Mr. Caughill and looking at the mischief that Rule 53.03 was intended to address, I do not find him to be a typical “hired gun” or just a “litigation expert” in the circumstances of this case.

Justice Koke held that the trial judge could deal with issues of bias. On the question of usurping the role of the trial judge on the ultimate issue, he felt that this was unavoidable but that “the trier of fact will make a decision based on the totality of the evidence”.

Thus, the expert’s testimony was allowed: “Mr. Caughill is permitted to provide opinion evidence at trial with respect to the methods and procedures used by the defendant in carrying out the roof repairs, and any failures associated therewith, and with respect to the cause of the leakage of water into the building”.

In this case, the party calling the expert had obtained and served reports from the expert. But why? If Rule 53.03 does not apply to non-litigation experts, what obliges a party to serve a report? Section 52 of the Evidence Act does impose certain requirements with respect to reports of “practitioners” under the Regulated Health Professions Act, 1991 but even that provision does not say that doctors cannot testify as experts unless they have provided a report that summarizes their testimony.

So, I’m looking forward to the next logical step in the evolution of the judicial exposition of Rule 53.03: at some point, a court will be asked to decide whether there is anything that prevents a party from calling a non-litigation expert in exactly the same manner as if the person were a fact witness (i.e., without a report, a summary of qualifications, an acknowledgment of duty and the other requirements imposed by Rule 53.03).

In a similar vein, what is one to make of the requirements of Rule 31.06(3), which deals with obtaining information about experts during examination for discovery. It says:

(3) A party may on an examination for discovery obtain disclosure of the findings, opinions and conclusions of an expert engaged by or on behalf of the party being examined that are relevant to a matter in issue in the action and of the expert’s name and address, but the party being examined need not disclose the information or the name and address of the expert where,

(a) the findings, opinions and conclusions of the expert relevant to any matter in issue in the action were made or formed in preparation for contemplated or pending litigation and for no other purpose; and

(b) the party being examined undertakes not to call the expert as a witness at the trial.

The word, “expert” is not defined in the Rules. And Rule (3) uses the term, “expert”, while Rule 53.03 speaks of “expert witness”.

Still, it seems pretty clear that the language of Rule 31.06(3), “an expert engaged by or on behalf of the party being examined”, is referring to what Justice Koke calls “a litigation expert” in the context of Rule 53.03. Does that mean that Rule 31.06(3) only applies to such experts? If you have happen to have in your file a report from an expert witness whom you did not retain for the litigation, does that mean that the other parties are not entitled to the information about that expert evidence that is set out in Rule 31.06(3)? (Of course, in this scenario, the report itself would have been produced, because it would not be privileged. But as for the other information contemplated by Rule 31.06(3), that’s a different question.)

Stay tuned!

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Clarification of Jurisdiction of Masters On Motions for Summary Judgment in Wake of C.A.’s Decision in Combined Air

Posted on March 20, 2012 by Stephen Cavanagh

I”ve just come from a motion before Master Calum MacLeod, where he provided to me and to opposing counsel a copy of his reasons in 90 George St. v. Reliance Construction, 2012 ONSC 1171 (CanLII). Upon returning to my office however, I found that they are now on CanLII, accessible through the link above.

This is an important decision, especially for those of us who bring most of our motions for summary judgment before masters. In it, Master MacLeod discusses the scope of powers that masters can exercise on such motions in light of the Court of Appeal’s decision in the Combined Air cases, which interpreted the amendments to Rule 20.

The facts of 90 George St. aren’t of much significance beyond this case, but Master MacLeod’s general observations are. I don’t think I can do much better than to quote the eleven principles distilled by the Master from the authorities:

a. The court hearing a summary judgment motion must first determine if there is a genuine issue that could be successful at trial.

b. There is no genuine issue if the law clearly shows that one of the parties cannot succeed. For example if the Supreme Court of Canada has determined that the cause of action does not exist or if a release, contract or statute allows of only one interpretation.

c. There is no genuine question of fact if the party relying on a key fact that is essential to success at trial cannot prove it. In determining that issue, the court may draw a negative inference under Rule 20.02 (1) if it is appropriate to do so. The court may reject evidence that could not persuade a trial judge such as a bald self serving affidavit, an affidavit that is illogical or internally inconsistent, or an affidavit that is demonstrably incorrect because, for example it purports to rely on wording in a document or contract which is misquoted or nonexistent.

d. In assessing the sufficiency of the evidence, the court must consider whether or not it is just to draw a negative inference and the extent to which it is reasonable to require a party to put its best foot forward at this particular point in time, whether the motion is premature, whether the responding party has been denied access to critical evidence.

e. In an appropriate case if a summary judgment motion would impose an unreasonable and disproportionate procedural burden in advance of discovery, the motion should be stayed.

f. Another factor to be considered in assessing whether the responding party has met its responsibility to put its best foot forward will be the complexity of the evidence. The genuine appreciation test should inform this analysis in my view.

g. A plaintiff moving for summary judgment must show firstly that the plaintiff can prove all elements of the case and secondly that there is no merit to the defence. A defendant moving for summary judgment could do so either on the basis that the plaintiff cannot prove its case or that there is an absolute defence or both. In addition summary judgment may be available on evidentiary grounds or on legal grounds or a combination of the two.

h. If summary judgment would have been granted under the previous rule then it is self evident that it also meets the test under the amended rule. If the evidence or the law demonstrates there is no genuine issue to be tried then summary judgment should be granted.

i. In the case of a genuine issue of law, the master may refer the matter to a judge to decide the question of law if the master is of the view that the only genuine issue is a question of law that could be determined without a trial. (Rule 20.04 (4)) Even if the sole genuine issue is a question of law, it is open to the master to dismiss the motion for summary judgment if it appears the question of law is such that it would require a trial for resolution. In making that decision, the court should now apply the full appreciation test.

j. If there is a genuine question of fact or of mixed fact and law then the master must apply the full appreciation test and may grant summary judgment if the question can be determined without a trial. This will seldom be the case for the master because the powers added to the rule in Rule 20.04 (2.1) and 20.04 (2.2) are not accessible to masters. Thus there will be a class of cases in which notwithstanding that there is a genuine issue that could be tried, a judge can decide the merits without a trial whereas a master cannot.

k. If summary judgment is refused or granted only in part then the master may have recourse to the powers of the court set out in Rule 20.05 but must heed the admonishment of the Court of Appeal in Combined Air that Rule 20.05 cannot be used to grant the very summary judgment that the court has just refused. Rule 20.05 may be used to salvage the resources that went into the summary judgment motion but it is not to be used to effectively order a trial that resembles the motion that was dismissed. [footnotes omitted]

One question that I have is, what happens if the master hearing the motion for summary judgment determines that there is an issue of fact or mixed fact and law that he or she cannot resolve because of not having the new powers conferred by the amendments to Rule 20? Say, for example, an adjudication depends on an evaluation of the credibility of a deponent. Making such an evaluation is something that judges, but not masters, can now do on motions for summary judgment, pursuant to Rule 20.04(2.1) 1. In such a situation, would a motion returnable before a master simply be dismissed or would it be adjourned to be heard by a judge? If the former is the case, bringing motions for summary judgment before masters becomes a somewhat higher-risk proposition.

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