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Monday Morning Case Bites for May 6, 2019

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

Edited by Amanda Kostek & Christie Dewar

Wage v Canadian Direct Insurance Incorporated, 2019 ABQB 303
Coverage | SPF 1, SEF 44 | Philippines

Scott v Cargill Limited, 2019 ABQB 308
Inordinate Delay | Defendant Stonewalling

Nammo v Her Majesty the Queen in Right of Canada, 2019 ABQB 300
Long Delay | Self Represented Litigant | Request to Chief Justice

Intact Insurance Company v Clauson Cold & Cooler Ltd, 2019 ABQB 225
Costs | Complex Coverage Issue | 40% of Solicitor Client Costs


Wage v Canadian Direct Insurance Incorporated, 2019 ABQB 303

This was an unsuccessful application for summary dismissal by an insurer. The issue was whether a policy applied to an accident that occurred outside of Canada. The insured was struck and killed by an unidentified motorcyclist in the Philippines. Her spouse and estate claimed benefits under the SPF 1 and SEF 44. The claim was denied on the basis that the collision occurred in the Philippines. At the Master’s level the Court concluded coverage was available on the following basis:

[7]               The Master held that the endorsement contained its own jurisdictional clause, which operated to restrict the application of the policy’s jurisdictional clause from applying to the endorsement. That clause in the endorsement only excludes accidents that occur in Quebec, and no other restriction, thus the place of an accident with an uninsured driver under the endorsement can and does include the Philippines.

[8]               As such he found that there was no territorial limit to the endorsement that affected an accident in the Philippines, nor did the territorial limit in the policy negate coverage under section B of the policy; and the Master refused to attempt to limit coverage by rewriting the endorsement, which he found is typically meant to extend coverage.

On appeal, the Court interpreted the policy to cover incidents when the insured vehicle is in Canada or the US, not the vehicle that caused the collision:

[33]           Simply put, the policy clearly states that it (and thus the endorsement) applies to incidents that occur when “the automobile” – their insured vehicle, not the automobile that caused the accident – is in or on the way to Canada or the United States. … If the policy meant to redefine the term between the policy and the endorsement, it would have to explicitly do so.

                …

[35]           To follow that direction and construe the coverage provision broadly, the territorial limit of the policy determines coverage based on where the insured vehicle is located. This applies to the endorsement, even though the endorsement specifically relates to accidents that do not involve that vehicle.

In this case the insured car was in Canada, but the accident occurred in the Philippines.    It was argued that the policy makers could not have intended worldwide coverage.  However, the Court concluded that that was how the policy was drafted:

[38]           The appellant argued that worldwide coverage (outside of Quebec) cannot be what the intention of the drafting of the endorsement. That may or may not be true, but nonetheless it is how the documents were drafted. The appellant cited Radu v Hartford Fire Insurance Co. [1997] O.J. No. 6356, which reaches the same conclusion I do about the application of the territorial clause of the policy applying to the endorsement. However, in that case, coverage did not flow to the claimants for an accident that occurred in Jamaica. The difference being the wording of the territorial clause: “This policy covers you and other insured persons for incidents occurring in Canada or the United States of America…” (emphasis added). The difference in wording creates a difference in coverage. As noted by the respondents, if anything, this clause illustrates how simple it would have been for the drafters to create a clause that achieved the same result as the Ontario clause.

As a result, the Court dismissed the insurer’s application for summary dismissal.


Scott v Cargill Limited, 2019 ABQB 308

This was an unsuccessful application for dismissal for inordinate delay. The Court refused to dismiss the claim on the basis that the Defendant was stonewalling the Plaintiff for years, and much of the delay was attributable to the Defendant. As a result, the Court refused to dismiss the claim notwithstanding that 15 years had elapsed:

[101]      In fact, the behaviour of the defendant throughout has made it clear that it is happy to delay and ignore the claim. Certainly, there has been virtually no cooperation in moving it forward. Admittedly, the Foundational Rules were not in existence at the outset of the claim, but they came into force November 1, 2010, and rule 1.2 directs, in simple terms, the approach to be used by the parties and the court that has been in play since then …

[103]      Rule 4.31 talks of “inexcusable” delay. What is “inexcusable” must be looked at in context, as the Court of Appeal made clear in Humphreys. When the defendant has caused much of the delay, its behaviour has effectively “excused” it, particularly in light of rule 1.2.

[104]      In my view, although the delay has been inordinate (as the plaintiff admits) the defendant cannot complain that the delay has been “inexcusable” when it has been significantly contributing to the delay in the face of repeated attempts by plaintiff’s counsel to move the case forward – not on one or two isolated occasions, but repeatedly, over a period of years, refusing to acknowledge correspondence, and then blaming the delay entirely on the plaintiff or her counsel.

[105]      The defendant’s delays seem to have been to the point of causing the plaintiff to almost run out of steam after years of stonewalling. That would seem to be the best explanation for the plaintiff’s more recent delays.

Further, given the Defendant’s conduct, the Court would have refused to dismiss the claim in any event:

[111]      Finally, rule 4.31 reserves a discretion. Even if I had not determined that there is no significant prejudice, or that that the delay was not inexcusable, in light of the apparent deliberate attempt to delay and frustrate the plaintiff’s claim I would have found a compelling reason not to dismiss the claim (as described in Humphreys) and exercised my discretion to decline to dismiss the claim.


Nammo v Her Majesty the Queen in Right of Canada, 2019 ABQB 300

This was a successful application to dismiss an action for long delay. The issue in this case was whether a self represented litigant’s request to the Chief Justice significantly advanced the action.  The Court concluded that it did not, and dismissed the claim under the 3 year ‘drop dead’ rule.

Given that the Claim sought over $50 million as a result of a motor vehicle collision, the insurer was granted Column 5 costs for its successful application.


Intact Insurance Company v Clauson Cold & Cooler Ltd, 2019 ABQB 225

This was a decision on costs arising out of a complex coverage decision. The Defendant’s actual legal fees were $56,338.62, and the Defendant was seeking a costs award of $30,000, almost one half of its actual legal fees. The Court noted that the policy was multilayered and complex:

[15]           In this case, Clauson commenced proceedings to compel its insurer to defend it in two lawsuits. The policy in question is multilayered and complex. Given the nature of the dispute, there was likely no prospect of compromise between the parties; as a consequence, the principle that a predictable cost award based on Schedule C would assist the parties in evaluating their risk and therefore the prospect of resolution has no application in this instance. I will add as a general comment that until the disparity between Schedule C and the cost of service is rectified, Schedule C costs are likely of little relevance to a party’s assessment of risk: a successful party will only recover a fraction of its costs and, to an unsuccessful party, Schedule C costs may represent only an incremental cost to losing. In my view, the further removed Schedule C is from the real and reasonable costs of a party, the less likely that the risk of paying Schedule C costs will be a factor in the conduct of litigation and the evaluation of settlement.

The Court concluded that costs of 40% of Solicitor Client costs were appropriate in this case:

[19]           I am satisfied that awarding costs on Schedule C or on a multiplier of Schedule C would not provide Clauson with an appropriate level of costs given the nature of the issues in dispute, the risks to Clauson, and the effort required by the parties in bringing these applications relative to the allowance in Schedule C. Applying a percentage of indemnity as was endorsed in the Weatherford is a more appropriate determination of a reasonable cost award in this instance. However, the percentage of solicitor-client costs should be on the lower end of the recognized range.

[20]           As a result, Clauson is awarded 40% of its actual solicitor and own client costs relating to the proceedings before the Master and before this Court.