Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.
Condominium Corporation No 0427067 v Aviva Canada Inc, 2021 ABQB 43
Limitation Period | Summary Dismissal | Fraudulent Concealment
Mansour v Rampersad, 2021 ABQB 44
Consent | Summary Dismissal
The Plaintiff owned a residential condominium in Edmonton. Water damage was discovered in June 2011. Coverage was investigated and ultimately denied. In the context of a simultaneous action against various parties responsible for the construction of the property, the Plaintiff came to realize that the wrong policy was used to assess the claim and cited in the letter of denial from the insurer. The Plaintiff filed this action in 2017 to challenge the denial of coverage.
The Master came to the following conclusion:
 In 427 v Aviva, the Master concluded:
 The parties agree on the test for Summary Judgment. Without reciting the many authorities arising from Hryniak v Mauldin, 2014 SCC 7, the question is whether I am satisfied that a fair and just determination can be made on the record. Other than criticism of Economical’s evidence, there is no dispute as to what transpired. The Economical claim can be dispensed with pursuant to r 3.68 as the pleadings disclose no cause of action based on the facts alleged.
 The real question is whether at law these factual circumstances give rise to a postponement or extension of the limitation period. It is undeniable that errors [were] made which resulted in a most unfortunate denial of the Plaintiff’s claim. The Insurers and Crawford say the Plaintiff with the help of its agents and legal counsel ought to have readily recognized the error. Despite the temerity of this coming from those who also did not recognize the error, whether the error was recognized is in my view of no particular moment to this application. No authorities have been presented to support the conclusion that the discussions, the representations or misrepresentations arising from the errors made, in law, postpone the running of the limitation period or extend it. The claim by the Plaintiff was simply too late.
The Chambers Justice agreed with the master’s conclusions. The Plaintiff however raised the issue of fraudulent concealment and whether such extends the running of the limitation period.
The Court cited the following authority:
 In Ambrozic v Burcevski, 2008 ABCA 194 [Ambrozic], our Court of Appeal prescribed the relevant test for assessing when fraudulent concealment will suspend a limitation period:
 Fraudulent concealment that suspends a limitation period requires three findings: (1) that the defendant perpetrated some kind of fraud; (2) that the fraud concealed a material fact; and (3) that the plaintiff exercised reasonable diligence to discover the fraud: H.(V.A.) v. Lynch, 2000 ABCA 97, 255 A.R. 359 [H.(V.A.)].
 … fraudulent concealment require[s] “conduct which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for the one to do towards the other”: Kitchen v. Royal Air Forces Association,  2 All E.R. 241 at 249 (C.A.) and Guerin v. The Queen, 1984 CanLII 25 (SCC),  2 S.C.R. 335, 13 D.L.R. (4th) 321.
 Fraudulent concealment requires an element of unconscionability, “some abuse of a confidential position, some intentional imposition, or some deliberate concealment of facts”: M.(K.) v. M.(H.), 1992 CanLII 31 (SCC),  3 S.C.R. 6 at 57, 96 D.L.R. (4th) 289. Unconscionable conduct can be either active concealment or a failure to disclose: H.(V.A.) at para. 35. As well, the defendant must know of the wrong. A defendant who is unaware that he has committed a wrong is protected by statutory limitations: King v. Victor Parsons & Co.,  1 All E.R. 206 (C.A.).
 The second requirement is that “the fraud must have concealed some material fact which the plaintiff has to prove to succeed at trial”: H.(V.A.) at para. 28 […].
 The third requirement looks at the plaintiff’s conduct. The limitation period will not be suspended if the plaintiff could have uncovered the fraud but did not make reasonable inquiries. What constitutes reasonable diligence depends on the particular situation: H. (V.A.) at para. 29. This element incorporates the doctrine of discoverability. The limitation period begins to run when, in the circumstances, the plaintiff ought to have discovered the facts material to the claim.
The Plaintiff argued that they were unaware that Kneller, a loss adjuster, had been retained by both the Plaintiff and the Insurers to investigate the loss. The Court found there was insufficient evidence to support the Plaintiff’s assertions they were unaware of Kneller’s dual agency.
 In addition, the Appellant has not provided evidence to demonstrate that it was unaware of Kneller’s dual role in adjusting the claim. The affidavit evidence put forward by the Appellant on this appeal does not categorically confirm that the Appellant was unaware that Kneller was also acting for the Insurers.
 Finally, the letter sent by Kneller on March 23, 2012 was clearly a letter denying coverage on behalf of the Insurers, and not as a representative of the Appellant. The letter was obviously treated by the Plaintiff as a Denial Letter issued on behalf of the Insurers.
There was no dispute that the wrong policy was referenced in the denial letter. However the evidence supported the conclusion that the error was inadvertent. The Court also rejected the Plaintiff’s argument that a statement by one of the subscribing insurer’s made to Kneller about there possibly being a loophole that would lead to coverage constituted a fraudulent concealment:
 On the issue of intentional or deliberate concealment of the operative Policy on the date of loss, there is no dispute that the wrong Policy was used by Kneller and the Insurers to assess the claim and that the Denial Letter referenced the wrong Policy wordings. The evidence before the Master at the initial application and before this Court on appeal supports the conclusion that the error was inadvertent; the cited wordings were those in force when Kneller was investigating the Loss, not those in force at the date of loss. The error was the result of Renfrew, the Plaintiff’s broker and agent, providing Kneller with the wrong wordings in response to Kneller asking York West for the Policy coverage.
 The analysis to this point has focused on the Plaintiff’s arguments as they relate to allegation of fraudulent concealment of the dual agency of Kneller and the possibility of an injury arising from wordings of the correct Policy. However, the Plaintiff also argues that Kneller perpetrated a fraud when he failed to disclose the comments of the Peace Hills employee that they thought there may be a loophole for the insured with reference to the inoperative Policy. The Peace Hills email stated, “Still think that there is a loophole for insured re ‘similar wall or roof openings’ and exception to exclusion G-b. But will follow lead’s discretion. Will await final report/denial.” The Appellant argues that Kneller should have disclosed this statement by Peace Hills and his failure to do so was a fraudulent concealment.
 I have carefully reviewed the communications between and Kneller and Peace Hills in late January/early February 2012. The communications of Peace Hills demonstrate that they were reviewing the possibility of coverage. In furtherance of their review, they asked Kneller for a copy of the policy wording with exclusions. When received, Peace Hills responded with “Thanks [Kneller]. That is better. Different than the one I had.” With the benefit of hindsight, the response of Peace Hills suggests that prior to the email they may have been reviewing the claim against the operative Policy. Again, with the benefit of hindsight, the comment by Peace Hills that they had a different wording could have acted as a red flag and opportunity for Kneller and Peace Hills to pause and take steps to confirm the operative Policy. That did not happen. Instead, Kneller assuaged Peace Hills’ concerns by providing the Policy wordings and exclusions that were provided to him by Renfrew.
 When viewed in context of the entirety of the circumstances and the fact that Peace Hills decided to deny coverage, I do not believe that Kneller’s failure to disclose what the Peace Hills employee said was an unconscionable thing for Kneller to do, notwithstanding the special relationship between Kneller and the Plaintiff as well as the Plaintiff vis-à-vis the Insurers. In my view, this was not an “abuse of a confidential position, some intentional imposition, or some deliberate concealment of facts” (emphasis added): Ambrozic at para 23, citing M(K) v M(H).
 There is no evidence to suggest that the comment by Peace Hills that the Policy provided by Kneller was different than the one Peace Hills had on file brought about any realization on the part of Kneller or the Insurers that the wrong Policy was being used to assess the claim. Kneller and the Insurers’ conduct moving forward only confirms that everyone remained unaware of the error: Ambrozic at para 23, citing King v Victor Parsons & Co,  1 All ER 206 (Eng CA).
 Consequently, I conclude that on this record there is no evidence that Kneller intentionally or deliberately suppressed this information in favour of one principal party against the other. That allegation made by the Appellant against Kneller is unsupported by the evidence before the Master at the initial application or this Court on appeal. The argument of the Plaintiff on this issue can therefore not succeed. Moreover, and in any event, any opinion with respect to possible coverage under the inoperative July 1, 2011 Policy – provided to Kneller by Renfrew – cannot ultimately be a material fact.
 While Master Smart did not expressly address fraudulent concealment and apply the Ambrozic test, he substantively concluded that there was no evidence that Kneller intentionally referred to the wrong policy: 427 v Aviva at para 10.
 I agree with the Master’s statement that: “The reality [is] that no one recognized the error at that time” (427 v Aviva at para 15). I am satisfied that the Defendants/Respondents did not know at the time that the incorrect Policy wordings were being referenced instead of the correct wordings in place at the date of loss. They were “unaware that [they had] committed a wrong,” and in the circumstances did not perpetrate fraud: Ambrozic at para 23.
Having found there was no fraud, the Court completed the analysis still, and concluded that there was no evidence to support a finding that the Insurers had intentionally misled the Plaintiff:
 As set out above, all evidence on the summary dismissal application and the record on this appeal establish clear knowledge of Kneller’s dual role by the Appellant’s broker and agent (Renfrew) and its property manager (York West). Further, Kneller spoke with more than one Appellant Board member directly. One of those Board members was a professional claims adjuster. Given the Board member’s profession and the nature and timing of the conversations she and Kneller had, it would have been clear that Kneller was also acting for the Insurers, and therefore in a dual role. All of the evidence on the summary dismissal application and the record on appeal attest to the reality that Kneller and the Insurers were not concealing the dual agency of Kneller.
 The totality of evidence on the summary dismissal application before the Master as well as the record on this appeal point to unintended error on the part of the Defendant Insurers. There is no evidence before me to support a finding that the Insurers were intentionally misleading the Appellant. The Master’s decision correctly came to the same conclusion that none of the parties recognized the error at the material point in time: 427 v Aviva at para 15.
 I am satisfied that the Respondents were neither concealing the facts about Kneller’s agency for the Insurers nor the wordings of the correct Policy that was in effect on the date of loss.
On the third element – whether the Plaintiff exercised reasonable diligence to discover the alleged fraud, the Court agreed with the Master’s conclusion that the Plaintiff should have realized the denial letter contained wordings and exclusions from the incorrect policy prior to the expiry of the original limitation period.
 I agree with Master Smart’s conclusion that there was lack of due diligence on the part of the Appellant. If they had performed their due diligence, the Appellant would have realized that the Denial Letter contained wordings and exclusions from the incorrect Policy. Discovering that incorrect policy wordings were relied on after approximately 5 years does not persuasively indicate or demonstrate that the Appellant met its duty of reasonable due diligence.
 Put differently, the Appellant’s inability to detect or uncover this error – which reiteratively was not a fraud – over a period of approximately 5 years is inexcusable tardiness on its part and that of its team of skilled professionals: Centre Datson at para 16.
 On this record and evidence, the Appellant has failed to meet the onus requiring it to demonstrate reasonable due diligence.
Accordingly, the appeal was dismissed.
The Plaintiff was injured in a motor vehicle accident and commenced an action against Pinksen, the owner of the vehicle that struck the Plaintiff’s vehicle, and Rampersad, the driver of that vehicle. Rampersad had stayed at the Pinksen’s residence, and permission was given to him to use the Pinksen’s vehicle to run errands. He did not return the vehicle, and after two days, the Pinksen’s reported the vehicle as stolen. Rampersad was contacted by police and with Pinksen’s consent, given until 5AM on May 12 to return the vehicle. The vehicle was not returned by that deadline, so Pinksen reported it as stolen. The accident involving the Plaintiff occurred on May 13.
The Court relied on the following authority for whether there is consent to drive and possess a vehicle:
(2) In an action for the recovery of loss or damage sustained by a person by reason of a motor vehicle on a highway, a person who, at the time that the loss or damage occurred,
(a) was driving the motor vehicle, and
(b) was in possession of the motor vehicle with the consent, expressed or implied, of the owner of the motor vehicle, is deemed, with respect to that loss or damage, (c) to be the agent or employee of the owner of the motor vehicle,
(d) to be employed as the agent or employee of the owner of the motor vehicle, and
(e) to be driving the motor vehicle in the course of that person’s employment.
 The following principles concerning the interpretation and application of TSA section 187(2) are applicable:
- Consent can be express or implied; implied consent is determined through mixed subjective and objective factors; implied consent can be terminated: Palsky v Humphrey,  SCR 580, 1964 CanLII 96 (SCC) at para 23.
- The driver’s subjective state of mind is not a relevant factor for implied consent. However, relevant to the overall context is if the driver objectively might have thought from all the circumstances that he had consent: Garrioch v Tessman, 2017 ABCA 105, at para 27.
- TSA section 187(2) imposes vicarious liability on an owner when consent has been given to both possess and drive the vehicle. The owner is not liable where there is consent to possess the vehicle, but not to drive. Consent to drive can be terminated even when a person may have possession. Conditional consent is not permitted: Mugford v Kodiak Construction Ltd, 2004 ABCA 145 at paras 41-43.
- An exception to the rule against conditional consent is that an owner can impose a condition that possession will not be passed on to third parties or classes of third parties: Garrioch at para 54(d). This condition can be express or implied: Garrioch at para 23, 54(d)(ii), 56.
The Court concluded that consent to drive can be terminated in advance or subject to an expiration period:
 I find that clear, unequivocal, and unambiguous express termination or revocation of consent to drive is effective, even if made in advance.
 The respondents submit that express advance notice of termination of consent is unenforceable because it is nothing more than a limitation on consent. In other words, it is the same as a condition on consent, which is not permitted. I disagree.
 In Mugford, the Alberta Court of Appeal found:
Requiring consent at the time of the accident operates to the same effect as conditional consent. Where the owner has not, expressly or impliedly, required specific consent for each possession and use of the vehicle, there is no requirement to determine consent for each time the driver uses the vehicle…. where the owner has consented to a situation or arrangement where the owner has no control over the use and possession of the vehicle, a negative answer to the hypothetical question of whether consent would have been given at the time of the accident cannot relieve the owner of liability; otherwise, the purpose of s. 181 would be undermined: Mugford at para 46.
As stated by the courts in Gillard and Barreiro, the legislation is intended for the benefit of users of highways and that benefit should not be circumvented by conditions imposed by owners by agreement or otherwise. The policy favours innocent third parties seeking compensation for injuries suffered at the hands of negligent automobile drivers. The recourse for owners is to exercise more care when entrusting their vehicles to another and to obtain insurance in excess of the statutory minimum limits: Mugford at para 51.
 There cannot be conditions attached to consent, but for the third-party exception. Consent to drive a vehicle is similar to an on or off switch; it either exists without conditions or it does not exist at all: Garrioch at para 19. If an owner gives consent to a driver, the owner is deemed to accept the risk that the driver might in some particular respect, on some particular occasion, be negligent, or use the vehicle in an unauthorized or unanticipated way: Garrioch at para 19.
 An owner’s personal or internal policies about use of the vehicle, even if expressly made a condition of the transfer of possession of the vehicle, are ineffective in law against third parties. A driver’s failure to comply with an owner’s policy or condition cannot terminate the “possession with consent”: Garrioch at para 20.
 The Alberta Court of Appeal further held that when an owner gives consent to drive a vehicle the owner is deemed to accept the risks of what the second party does with it, and the owner’s insurance is engaged. Limitations on the place, timing, or purposes of the driving are ineffectual against injured plaintiffs: Garrioch at para 21.
 However, when a vehicle owner trusts someone with the possession and operation of the vehicle, the owner retains some control of the vehicle. For instance, although an owner may have given up possession of the vehicle, and in one sense may have “lost control”, the law still entitles the owner, not the driver, to determine who has consent to drive that vehicle: Garrioch at para 68.
 Further, if the owner can terminate implied consent (Palsky), then express consent can also be terminated. All counsel before me agreed that consent can be terminated or revoked by an owner. Consent to operate a vehicle can be terminated while a driver maintains possession.
 If an owner can consent to a second party driving, yet forbid a third-party drive while the vehicle is in the possession of the second party, (Garrioch), an owner must also be able to consent to a second party driving and expressly forbid that same second party from possessing or driving the vehicle at a specific later time.
 There is a notable difference between creating a condition to consent by imposing a time or location restriction, and revoking consent after a period of time has passed.
As such, the Court concluded that Pinksen’s consent for Rampersad to drive the vehicle terminated at 5am on May 12, 2015, the time at which she permitted the vehicle to be returned prior to it being reported stolen.
 I find that Ms. Pinksen gave Mr. Rampersad express consent to drive on May 12, 2015. Whether or not there had been implied consent before then matters not. Her express consent for Mr. Rampersad to return the vehicle back to her house was the consent ‘on’ switch, without conditions attached. If Mr. Rampersad were in an accident while driving between midnight and 5 am on May 12, 2015, regardless of whether he was driving the vehicle to return it to Ms. Pinksen or not, she would have vicarious liability.
 But Mr. Rampersad was expressly told: return the vehicle by 5am or it will be considered stolen. In other words, return the vehicle and your consent to drive is terminated; or if you do not return the vehicle your consent to drive is terminated. Either way, as of 5am on March 12, 2015, the consent switch was ‘off’. There was nothing unclear, ambiguous, or equivocal about the termination of consent.
 There was nothing further Ms. Pinksen could have done to terminate consent. The vehicle was stolen, and compensation to any injured party would be provided by the state under s. 5 of the Motor Vehicle Accident Claims Act, RSA 2000, c. M-22: Garrioch at para 16.
The Court, therefore, determined that since there was no consent for Rampersad to operate the Pinksen vehicle at the time of the collision, there was no merit to the Plaintiff’s claim against Pinksen, and permitted the appeal, summarily dismissing the Plaintiff’s claim against Pinksen.