Kirby v. Dominion of Canada General Insurance Company

Kirby v. Dominion of Canada General Insurance Company Court Supreme Court Date 2010-12-13 Citation 2010 NSSC 455 Docket SH 283704 Judge/Registrar/Adjudicator Haliburton, Charles E. (Honourable Justice) (SC) Document Type Decision Decision Content SUPREME COURT OF NOVA SCOTIA Citation: Kirby v. Dominion of Canada General Insurance Company, 2010 NSSC 455 Date: 20101213 Docket: SH 283704 Registry: Halifax Between: Brenda Jessie Kirby Plaintiff v. The Dominion of Canada General Insurance Company Defendant Judge: The Honourable Justice Charles E. Haliburton Heard: October 28, 2010, in Halifax, Nova Scotia Final Written Submissions: December 13, 2010 Counsel: David W. Richey, for Brenda Jessie Kirby Philip M. Chapman, for The Dominion of Canada General Insurance Company By the Court: [1] The defendant brings this motion under civil procedure rule 23.05: “The Defendant, the Dominion of Canada General Insurance Company, moves for an order that the action be tried by judge alone, and to sever the trial of the issue of bad faith from the trial of the claim under the contract; and to stay the trial of the issue of bad faith until after a decision on the contractual claim has been rendered." [2] On hearing the motion, counsel for the Plaintiff indicated his agreement that the issues be "severed" but advanced his argument that both aspects of the claim be tried by jury. FACTS [3] The plaintiff, Ms. Kirby, was injured in a running down accident on February 27th, 2000. She was struck and injured by a car driven by Mark Strickland who was insured by the defendants. There is an action in negligence still working its way through the system. She also sought coverage under (section B) of Stricklands' standard automobile policy. That is where this action comes from. Dominion provided her with certain benefits, but eventually some of the benefits Ms. Kirby claimed, were denied. She filed suit, alleging breach of contract and bad faith on the part of Dominion. In her statement of claim she says: “6 (a) the plaintiff made claims for no‑fault benefits to Dominion only for the cost of treatment, rehabilitation or occupational retraining which was not otherwise covered by her employer or other insurance, and for the first four years following the collision, these benefits were competently administered by Charlene Osborne and Lori Greenough of the defendant Dominion insurance.” [4] At the expiry of the four‑year coverage provided by section B, this dispute arose. Ms. Kirby claims that there was a treatment plan in place at that time that allowed her to continue to access coverage under section B for ongoing medical and rehabilitation benefits. Dominion denies that Ms. Kirby is entitled to coverage beyond the four‑year coverage as set out in the policy. [5] In his pre‑hearing submission , Defence Counsel wrote with respect to this intended motion: "Dominion seeks to sever the contractual issues from the bad faith claim and to advance the trial immediately on the contract claim, staying litigation of the bad faith issues until a decision has been rendered on the contract claim. Additionally, the parties cannot agree on whether to proceed to trial with judge alone or to allow a jury.” [6] Dominion has applied for a date for trial with judge alone while Ms. Kirby has elected trial by jury. At a date assignment conference held November 20, 2009, those matters were set over to be heard on motion. This is that motion. Issues 1. Should the bad faith claim be severed from the contract claim? 2. Should the trial be heard by judge alone? SEVERANCE [7] My conclusion is that "severance" is not appropriate. An order to sever this action into two, will not be granted. I further conclude that the issues between the parties are not appropriate to trial by jury and that the file should be set down for trial by a judge without a jury. [8] There are a number of considerations which have led me to these conclusions. [9] Our civil procedure rule 1.01 says "these rules are for the just, speedy, and inexpensive determination of every proceeding." I take this expression of this court to mean that there must be proportionality between the value and importance of a claim, with the cost and effort to be expended by the court and the parties in order to resolve the claim. [10] First of all, there is outstanding and unresolved, an action between the Plaintiff and Strickland. There is an obvious overlap between these two actions which were only recently severed themselves. These matters are outstanding since the accident, now more than 10 years. No further delay should be contemplated. Further the contractual aspect the plaintiff's claim relates to a balance owing for section B benefits which, after crediting the amount already paid, cannot exceed approximately $15,000.00. [11] Then, there are hurdles which she must overcome of a legal and procedural nature. She failed to meet the limitation time period for commencing an action under Section B. The insurance contract, as provided by Section 145 of the Insurance Act, fixed one year as that time. The second legal issue to be determined will be whether the medical expenses claimed by Ms. Kirby were "incurred within" four years from the date of the accident. Her claim is for the expense of medical procedures planned but not executed in that limited period. It will be only after the plaintiff is successful in overcoming the limitation issue and establishing that the treatment when administered, will fall within the definition, that any issue of good faith could arise. [12] Finally, the Plaintiff estimates that the time required for a trial with jury may be 12 days. Dominion estimated a trial without jury would last three days. The cost of a ten day trial is so totally out of proportion to the amount of money likely to result as to violate the intent expressed by CPR 1.01. [13] Counsel have advanced legitimate concerns about the management of the trial as the claims are presently put forward. The questions as to the limitation period and the interpretation of the medical expenses "incurred within four years" do not require much if any evidence. They are primarily questions of law and interpretation which must, in any event, be the province of the judge. The issue of bad faith will require evidence. Concern was expressed that counsel may become witnesses if and when the trial gets to that stage. There are copies of correspondence in the file between the insurance company and counsel for Kirby, debating the interpretation of the contract. Defence counsel raised the concern about the possible need to testify. One or both lawyers could become witnesses when the issue of "good faith" comes forward. The parties might be deprived of the counsel of their choice, should that happen. [14] In my view, C.P.R. 37 provides ample authority to the trial Judge for the effective management of the issues between the parties. It is not necessary to divide this file into two actions in order to separate the issues from one another. The two prongs of this action are interdependent. They cannot be rationally separated into two actions on a claim for efficiency. Indeed, if these proceedings had been started as two separate actions an application might have been properly brought under rule 37.02 to have them joined . There are common questions of law, the parties are the same, and the facts are common. If two separate trials were held there would be a repetition of evidence. The judge who will have the conduct of the trial has the authority to try the issues separately or sequentially to provide a fair and effective forum for the parties. [15] It was suggested by counsel that severance would not mean two trials by two separate judges or juries. I confess the terminology is confusing. In proposing "severance" Defence counsel referred to paragraph 122 of Witten vs. Pilot Insurance 2002 SCJ 19, 209 DLR (4th) 257, " where a trial judge is concerned that the claim for punitive damages may affect the fairness of the liability trial, bifurcated proceedings may be appropriate". [16] Referring to Black's Law dictionary I find that bifurcation and severance are two different things. The dictionary defines "bifurcated trial"..as.. "The trial of the liability issue in a personal injury or wrongful death case separate from and prior to trial of the damages question. The advantage of so doing is that if the liability issue is determined in the defendant's favour there is no need to try the damages question, which can be and involved one entailing expensive expert witnesses and other proof (compare severance of actions)”. [17] The dictionary definition given respecting "severance of actions" reads: "an action of a court in separating the claims of multiple parties and permitting separate actions on each claim or on fewer than all claims at one time.... Severance divides a lawsuit into two or more independent causes, each of which terminates in separate, final and enforceable judgment." [18] It seems clear that what the defendant desires is to have the issue of liability tried separately from and prior to the issue of bad faith. The trial judge has ample authority to manage the trial in that fashion if persuaded it is appropriate to do so. Should some or all issues be tried by jury? [19] The Judicature Act section 34 reads as follows: " subject to Rules of Court, the trials and procedure in all cases, whether of a legal or equitable nature, shall be as nearly as possible the same and the following provisions shall apply: (a) In civil proceedings, unless the parties ¼consent to a trial ¼.without a jury, the issues of fact shall be tried with a jury in the following cases ¼. (ii) where either of the parties in a proceeding requires the issues of fact to be tried ¼.with a jury and files¼¼a notice to that effect¼ [20] The statute clearly sets out the right of a party to have a jury preside over their trial. A number of cases have been cited to the court confirming that principle, and its application by the courts. I will cite only a few examples. McNeil vs. Hill the Mover Canada Limited 1027 D.L.R (2nd) 734 was a decision of our appeal court. In that case, when the matter had been called for trial, an application was made to dispense with the jury which was granted by the intended trial judge. On appeal, the majority of the court, in a decision delivered by Illsley CJ, allowed an appeal from that ruling. It was nonetheless left open to the judge hearing the trial to make such a ruling if he found it appropriate. In closing the Chief Justice said: " the order of this court will of course be without prejudice to the right of the judge who tries the case to exercise his discretion to deprive the plaintiff of her jury, either in respect of liability alone, or damages alone, or of both damages and liability; or on one or more separate issues of fact, if anything arises during the trial calling for the exercise of such discretion.” [21] In a separate decision, MacDonald J.A., after reviewing the provisions of the judicature act quoted above noted " it is worthy of remark that these provisions are biased in favour of trial by jury as the normal mode trial". He concluded his judgment by referring to an earlier case where he said: " the issue was not whether there should be a trial with or without a jury, however; it was the vastly different issue as to whether the plaintiff's right to trial by jury should be taken away. By the giving of the jury notice the plaintiff had acquired what has often been described as a substantive right, and one which (though subject to deprivation in a proper case) is not to be taken away without "sufficient or cogent” reasons.” [22] The law then, in this province, is that trial by jury is a substantive right not to be lightly dismissed; and that the preferred stage of the proceedings at which to bring such an application would occur after the trial judge is seized with the matter. Grant J, in Corkum vs. Sawatsky, heard an application similar to the present. At paragraphs 35 and 36 [113 NSR( 2nd) 406] he wrote: "I consider it preferable that a notice to dispense with the jury should be made before the trial judge. That is, the judge who will be or is conducting the trial. That judge, in my opinion, is in the best position to make such a decision. She/he is closest to the trial and the evidence to be adduced at trial. As well she/he lives with the result of the application. The trial judge probably has the best appreciation of the realities and or expectations of that particular trial.” [23] However, this application has been placed before me. I will not be the trial judge but I consider, under these circumstances, that I should deal with this application. [24] For reasons he expressed about what he anticipated to be the complexity of the issues arising in that trial, Grant J. allowed the application and struck the jury. Like him, I am not in the best position to assess the complexity of the issues which will arise when this matter comes to trial, however my present understanding is that the most important issues to be determined will be questions of law. I refer to the interpretation and application of rulings which are to be found in earlier decided cases, and the interpretation of certain provisions of the Insurance Act, together with an evaluation of how the proven facts relate to the law which the judge will have determined. [25] In setting forth the claim against Dominion for its failure of [utmost good faith] the plaintiff has claimed: "aggravated damages, punitive or exemplary damages, general damages for pecuniary and non-pecuniary losses, including no‑fault benefits toward loss of past and future income and diminution of earning capacity, prejudgment interest, costs etc. " [26] I refer again to Whiten vs. Pilot Insurance Company (supra) and the discussion in that decision of an insurer's duty of good faith, as that is described at paragraphs 26 through 31, together with a further remark that " punitive damages are awarded against the defendant in cases for malicious, oppressive and high‑handed misconduct that offends the courts' sense of decency". [27] It will be for the trial judge to determine as a matter of law whether the proven conduct of Dominion, in declining further section B benefits as they did, meets that threshold of malicious oppressive and high‑handed misconduct which should offend the court’s sense of decency. [28] These are legal concepts or constructs about which the judge will have to make a determination. The facts appear to be straightforward. There should be little dispute about those facts when the evidence is heard. What is required is an interpretation of the wording of the insurance policy, the Insurance Act, and earlier reported cases. The facts themselves will not be complicated or difficult to establish; what will be difficult will be the application of the law to those facts. A correct appreciation of the law must be drawn from all the sources just mentioned. The duty of good faith is itself a matter of law. [29] I find that this case as pled, involves interpretations of statute and case law. Whether Dominion has met the duty of good faith is to be determined by applying legal standards that can best be assessed by a judge. The issues to be determined are primarily matters of law or matters of mixed fact and law. Where factual issues may arise they cannot practically be separated from the legal concepts in order to properly instruct jury. The legal issues are pervasive. [30] For these various reasons, I have concluded that it is more likely to produce a just, speedy and inexpensive determination of this proceeding, if it proceeds as one trial by judge alone. [31] The applicant seeks costs on this motion which has been, at least partially, successful. My view is that the issues raised did require decisions to be made and directions given. The defendant will be allowed costs of $500.00 on the motion in any event of the cause. Haliburton J