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It’s All About Storage

 Apr 26, 2018 9:00 AM
by Neil Colville-Reeves

Issues relating to storage fees and insurers rights under the Repair and Storage Liens Act were the subject of a recent Court of Appeal decision.

In 2237466 Ontario v. Intact, the insured and insurer agreed that the insured’s vehicle which was damaged in an incident would be cashed out on an ACV basis. The car had been stored and there was a dispute about the amount owing by Intact for the storage. Intact obtained a s. 24 certificate under the RSLA which required the release the vehicle. 2237466 Ontario brought an application to have the certificate declared null and void because Intact had not paid the insured and was not the ‘owner or other person lawfully entitled to the vehicle’, a precondition for the party obtaining the section 24 certificate. The court found that because Intact had assumed liability for the vehicle by agreeing to pay out on an ACV basis they were subrogated to the rights of the insured.

The Court of Appeal noted that the position advanced by 2237466 Ontario would defeat the purpose of the RSLA which provides an expeditious way to address disputes dealing with storage costs. Although the amount in issue was likely modest (the case does not address quantum) the implications of an adverse decision could have been significant to insurers.

Read the decision here: 2237466 Ontario v. Intact


Neil Colville-Reeves

Neil is a Partner of Samis+Company. Neil focuses exclusively on insurance-related litigation. He has handled a broad range of matters before the Ontario Superior Court of Justice and the Financial Services Commission of Ontario, as well as advocating on behalf of his clients in private arbitrations.

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Discovery Motions - Hoist by Her Own Petard: Hamlet 2.0

 Apr 11, 2018 9:00 AM
by Kevin Mitchell

In this Shakespeareanesque drama respecting three related motor vehicle tort actions, Aviva, as third party, successfully motioned under Rule 31.10, at what appears to be the outset of the trials, to discover three “non-parties”. All three plaintiffs were in the same vehicle and represented by the same lawyer but each (more likely their lawyer) elected to sue the defendant, Backs, in three different actions. Despite an earlier order to be tried together or one after the other, the actions remained separate proceedings.

The non-parties to be discovered were actually the three plaintiffs; each a technical stranger to the others’ cases. Aviva wanted testimony from the two ‘strangers’ in each case as to the effects of the accident upon each plaintiff going both to credibility and damages. The questions were refused in discoveries about two years prior as not being relevant to the action in which they were being asked.

Mr. Justice de Sa in his April 4, 2018 reasons held that use of the Rule was an exception but not meant as a means to limit access to a witness with relevant evidence. Technically, considering the order for trial together there was a right to ask the impugned questions which were clearly relevant and not collateral. The decision to sue in three actions and take a narrow view of relevance was felt to frustrate the discovery process. The plaintiffs’ positions added costs and delay to the proceedings and contravened various principles, not the least of which was their determination on the merits. Some might say that concept has suffered for some time now.

The motion was granted for discovery of each of the non-parties. Aviva was awarded $7,000.00 in costs. Rosencrantz and Guildenstern should have been so lucky. Creative use of the Rules, yes. Ultimately in the best interest of the plaintiffs, no. See Kissoon v. Aviva 2018 ONSC 2167.

http://www.canlii.org/en/on/onsc/doc/2018/2018onsc2167/2018onsc2167.html

Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters. 

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Disclosing Litigation Agreements

 Apr 6, 2018 11:00 AM
by Neil Colville-Reeves

The Court of Appeal issued reasons on March 29, 2018 detailing the obligations of parties when entering into litigation agreements. The decision in Handley Estate v. DTE Industries is both a reminder and cautionary tale that provides a nice roadmap of things to do and not to do when entering into these kinds of agreements as part of a litigation strategy. The decision is a must read for those involved in litigation where Pierringer, Mary Carter or other litigation agreements are employed. 

In Handley, the plaintiff was a subrogating insurer in an oil spill claim. They failed to name one of the oil tank vendors in the supply chain. Because the limitation period had passed by the time it became apparent that the vendor was a necessary party, the plaintiff entered into a funding agreement with one of three defendants which required that defendant to issue a third party claim against the ‘missed’ vendor. In return the plaintiff would fund a finite portion of the cost of the third party action. The agreement was not disclosed to the other defendants. The plaintiff and the same defendant entered into a second agreement several years later which effectively saw the subrogating insurer step into the shoes of that defendant by way of an assignment of that defendant’s rights in the third party action.  The existence of the second agreement was subsequently disclosed but not immediately.  The plaintiff was eventually compelled to disclose the fact and details of the first agreement as well.

One of the other defendants who was not a party to the agreement brought a motion to stay the action on the basis that the plaintiff had failed to disclose the initial agreement and failed to disclose the subsequent agreement in a timely manner. The Court Of Appeal agreed, noting that agreements which ‘change entirely the landscape of the litigation’ must be disclosed immediately and that a failure to do so amounts to an abuse of process. There are sound policy reasons for this rule. The rules of our litigation process do not provide for trial by ambush or other ‘gotcha’ litigation strategies but rather embrace transparency and full disclosure. Procedural fairness requires that parties adhere to those principles. As the court noted, any agreement that has the effect of ‘changing the adversarial position of the parties set out in their pleadings into a cooperative one’ must be disclosed immediately to the other parties.

If there is any doubt about which side of the line to fall on when faced with disclosing litigation agreements the outcome in this case (which to some might appear Draconian) should make that decision an easy one.

Handley Estate v. DTE Industries


Neil Colville-Reeves

Neil is a Partner of Samis+Company. Neil focuses exclusively on insurance-related litigation. He has handled a broad range of matters before the Ontario Superior Court of Justice and the Financial Services Commission of Ontario, as well as advocating on behalf of his clients in private arbitrations.

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