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Monday Morning Case Bites for February 10, 2020

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Amanda Kostek & Steven Graham

Wage v Canadian Direct Insurance Incorporated, 2020 ABCA 49
Auto Policy Territorial Limitation | SEF 44

St Isidore Co-Op Limited v AG Growth International Inc, 2020 ABQB 94
Pleading Amendment after Trial | Pre-Judgment Interest

Mason v. Thompson, 2020 ABQB 76
Trial Decision | Motor Vehicle Accident  Damage Awards

Wage v Canadian Direct Insurance Incorporated, 2020 ABCA 49

At issue in this appeal was whether the territorial limitation contained in the standard auto policy precluded recovery under both Section B of the Policy and the SEF 44.

The Plaintiff was struck and killed by a motor bike in the Philippines. Her vehicle was parked in Edmonton.   The Court of Appeal noted that the territorial limitation contained in the general provisions of the policy specifically stated that the “policy applies only while the automobile is being operated, used, stored or parked within Canada, the United States of America or upon a vessel plying between ports of those countries”.

The Court of Appeal concluded that the territorial limitation applied to the entire policy, including the SEF 44 Endorsement:

[22]           Put another way, the policy’s territorial limitation applies to the whole policy, of which the entire SEF 44 Endorsement forms a part. Thus applied, the territorial limitation restricts its coverage territorially, in the same manner and to the same extent as applied to the underlying policy.

The Court accepted that the low cost of the SEF 44 supported an interpretation that limited worldwide application:

[23]           Insurance Bureau of Canada, Intervenor, submits that the typical premium for coverage under the SEF 44 Endorsement (usually about $20) supports the foregoing interpretation and negates its worldwide application. We agree.

Finally, the SEF 44 could not provide broader territorial coverage than the underling policy:

[24]           Moreover, the suggestion that the SEF 44 Endorsement provides greater territorial coverage than the underlying policy, does not comport with commercial reality; it is inconsistent with the reasonable expectations of the insurer and insured, and a contrary interpretation is unrealistic. The SEF 44 Endorsement is not travellers’ insurance.

[25]           We endorse, to this extent, what was said in LaPierre v General Accident Assurance Company of Canada, 2007 NSSC 9 at para 44:

It would be a surprising and unanticipated result if the territorial limitation were held to apply to all of the Policy except the Endorsement. It is not logical that in these circumstances the Endorsement, an addendum to the policy’s primary cover, could afford unlimited territorial coverage. The characterization by courts of SEF 44 coverage as ‘last ditch’ or ‘safety net’ coverage, as noted by Saunders J.A. at paragraphs 55 and 56 in MacIsaac v Deveaux, 2004 NSCA 87, supports this conclusion.

[26]           To conclude, the SEF 44 Endorsement specifically provides that it is subject to the provisions in the underlying policy, of which one is the territorial limitation provision. In our view, applying the unambiguous language of the policy and the SEF 44 Endorsement to the undisputed facts of this case, compels the conclusion that the respondents are not entitled to coverage under the SEF 44 Endorsement where the only vehicle involved in the death of Ms Wage was not “being operated, used, stored or parked within Canada, the United States of America, or upon a vessel plying between the ports of those countries”.

The Court of Appeal also concluded that Section B incorporated the territorial restrictions contained in the general provisions of the policy:

[30]           At the end of Section B, in bold print, it states: “See also general provisions, definitions, exclusions, and statutory conditions of this policy”. As the territorial limitation provision is set out in the General Provisions of the policy, it is expressly incorporated into Section B.

[31]           In our view, Section B is correctly interpreted by having regard to the specific circumstances that define whether a claimant is an “insured person”. When determining coverage under Section B, therefore, the territorial limitation provision restricts “insured person” to one injured by an “automobile. . . being operated, used, stored or parked within Canada, the United States of America, or upon a vessel plying between the ports of those countries” (emphasis added).

As a result, coverage was not available to the Plaintiff in these circumstances.

St Isidore Co-Op Limited v AG Growth International Inc, 2020 ABQB 94

Following a liability Trial there was a dispute over whether pre-judgment interest was payable where it was not expressly plead in the claim. The Court concluded that it was necessary to claim pre-judgment interest, but was not prepared to say a Court could never award it if it was not plead:

[22]           I will begin by dealing with the question of whether it is necessary for a party to include a request for prejudgment interest in its pleadings. I find that it is. The Alberta Court of Appeal in Plaza Deli and Gift Shop v Imbrook Properties Ltd, 1992 ABCA 106 (Plaza Deli) adopted and applied the ratio from Stoner on the necessity of pleading prejudgment interest and I am bound by that decision.

[23]           Furthermore, although the Judgment Interest Act provides that the Court “shall award interest in accordance with [Part 1 of the Act] from the date the cause of action arose to the date of the judgment” (s 2(1)), as D.C. McDonald J observed, “the existence of an absolute right to have judgment for a sum of money does not relieve the plaintiff of the obligation to claim judgment for such a sum” (Stoner at para 11).

[24]           As for the ostensible contradiction between r 1.3 and 13.6 – included in legislation which post-dates both the Stoner and Plaza Deli decisions – while I am not prepared to go so far as to hold that this Court can never grant prejudgment interest if it is not pleaded, this is not an appropriate case to determine that issue. On this point, para 48 of Bard v Canadian Natural Resources, 2016 ABQB 267, is apposite:

This Court has the authority to grant any remedy it deems fit, regardless of whether or not a particular remedy has been pleaded… It is with this knowledge that the Court exercises its discretion in allowing new remedies to be pleaded, or not [emphasis added].

However, the Court noted that the bar is low in terms of amendments. In this case the Defendant failed to show that it was prejudiced by the late amendment:

[33]           Finally, Wheatheart has not shown that allowing St. Isidore to amend its claim would result in prejudice to Wheatheart. I note that when a plaintiff seeks to amend its prayer for relief to claim prejudgment interest after the trial decision is rendered, the defendant can successfully oppose the claim “if the defendant satisfies the court that to allow the amendment and give judgment for pre-judgment interest would unfairly prejudice the defendant,” but the plaintiff’s request for such an amendment “will very likely be granted unless the defendant satisfies the court that he has been prejudiced by the plaintiff’s intention to claim interest not having been asserted sooner” (Stoner at paras 11-12). The defendant bears the onus in showing that it would suffer prejudice if the Court allowed the amendment.

[34]         Wheatheart has presented no evidence showing that it would suffer prejudice if the amendment were allowed. Wheatheart simply argues that the prejudice is clear on the face of the record: its admission that the payment was reasonable was responsive to a pleading that did not claim prejudgment interest. While that is true, there is no evidence before me to suggest that the absence of a plea for prejudgment interest played any role in Wheatheart’s admission. Furthermore, common sense suggests it would not have.

The Court noted that pre-judgment interest flows automatically from the negligent event:

[35]           The quantum of damages owed to Mr. Borger’s family is a matter quite separate from St. Isidore’s ultimate entitlement to prejudgment interest on a judgment against Wheatheart. Prejudgment interest typically flows automatically from the fact of the judgment – in essence, it is “simply a recognition that one party has had the use of the other’s money for a period of time… analogous to the interest a purchaser in possession pays on the outstanding balance of the purchase price in a real estate transaction” (Volker Stevin Contracting Ltd v Columbia Bulk Transport Inc, 2005 ABPC 320 at para 26).

As a result, the Plaintiff was permitted to amend its pleadings to seek pre-judgment interest and an order for pre-judgment interest was granted.

Mason v. Thompson, 2020 ABQB 76

The Plaintiff was involved in a collision in November, 2009 and February, 2011. The Plaintiff had pre-existing degenerative changes in his spine with symptomatic low back pain. From time to time he had neck and shoulder pain. He was a realtor.   The collisions resulted in soft tissue injuries to his neck and back. In 2010 he underwent prolotherapy injections. In 2011 he underwent 3 facet cortisone injections.   By October, 2011 he was scheduled for C5-7 medial branch blocks. He subsequently went for 2 more rounds of cervical injections without much benefit. He was prescribed antidepressants and struggled with sleep and increased headaches. in 2013 he sold his home and moved to Vancouver Island where he had previously planned to retire. In 2014 he started receiving CPP Disability benefits.   He was referred to a chronic pain clinic for treatment.   In 2016 he underwent neck surgery. Despite surgery he continued to have neck pain, back pain, headaches, poor sleep, and anxiety.   His symptoms were ongoing at the time of Trial. Although the Plaintiff was involved in another collision in 2018, he was back to his pre-2018 collision status by the time of the Trial.

The Court accepted that the Plaintiff was physically able to do most of the tasks associated with a Real Estate Agent by the time of his FCEs in 2012 and 2014. The Court rejected the approach taken by the Plaintiff’s economic expert, commenting that there was “no use pretending, with all of the uncertainties, that [it could] precisely assess Mr. Mason’s loss of income. At best, assigning a number is an educated guess based upon all of the evidence.”

The Court concluded that but-for the collision, the Plaintiff would have moved to Vancouver Island, albeit a few years later. Although the Court accepted that, but-for the collision, he would have continued his real estate business, he would have had bouts of arthritis in any event.   The Court awarded a lump sum of $500,000 in past and future income, but commented that not much of that amount could be attributed to the period of time beyond Judgment.

In terms of future care, the Court disallowed botox injection and exercise equipment. The Court commented that exercise is beneficial to everyone regardless of whether they have been in an accident.   Massage was cut back considerably. Continued counseling was allowed.   In total the Court awarded $35,000 in future care.

The Court awarded the following damages for both collisions:

  • General damages: $165,000 inclusive of housekeeping;
  • Past and Future Earning Capacity: $500,000;
  • Future Care: $35,000; and
  • Special Damages: the Court gave specific directions with respect to each item claimed with massage reduced by 50%.