Laybolt v. Irving Equipment Limited, 2020 NSSC 178

Supreme Court of Nova Scotia Citation: Laybolt v. Irving Equipment Limited , 2020 NSSC 178 Date: 2020-06-08 Docket: Hfx No. 458154 Registry: Halifax Between: Dionna Laybolt Plaintiff v. Irving Equipment Limited and Jason Meade Defendants Library Heading Judge: The Honourable Justice Mona M. Lynch Heard: May 25, 2020 in Bridgewater, Nova Scotia Written Decision: June 8, 2020 Subject: CPR 14.01 and 15.02; Relevance

Summary: The Plaintiff sought disclosure of the Defendants automobile insurance policy and all endorsements. The Plaintiff asserted that if there was an self-insured retention, the Corporate Defendant was an insurer not licensed to sell automobile insurance in Nova Scotia and therefore not protected by the minor injury cap pursuant to s. 113BA(3) of the Insurance Act . Issues: Is the automobile policy, including all endorsements relevant pursuant to Rules 14.01 and 15.02? Result: The answer is no, therefore the Plaintiff’s motion is dismissed. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION.

QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. SUPREME COURT OF Nova Scotia Citation: Laybolt v. Irving Equipment Limited , 2020 NSSC 178 Date: 2020-06-08 Docket : Hfx . No. 458154 Registry: Halifax Between: Dionna Laybolt Plaintiff v. Irving Equipment Limited and Jason Meade Defendants Judge: The Honourable Justice Mona M. Lynch Heard: May 25, 2020, in Bridgewater, Nova Scotia Counsel: Charles J. Ford, for the Plaintiff Christopher Madill, for the Defendants

By the Court: Background: [ 1 ] The Notice of Action in this case was filed on December 6, 2016 and was amended on February 23, 2017 and November 8, 2018. It involves an Action under Civil Procedure Rule 57 in relation to an automobile accident which occurred on September 10, 2015. The trial commenced on December 9 -12, 2019, but did not finish. The matter was to continue with a disclosure motion April 23, 2020 and continuation of the trial May 25, 26, and 27, 2020.

Due to COVID-19, the motion was scheduled for May 25, 2020 and the date for the trial continuation has not yet been scheduled. [ 2 ] The Plaintiff’s motion is for an order requiring the Defendants to disclose the relevant automobile policy, including all endorsements pursuant to Rules 14.01 and 15.02. [ 3 ] The Plaintiff’s evidence for the motion is contained in an affidavit of Tom Champion, a litigation Lawyer at Valent Legal. Mr.

Champion’s affidavit attaches a chain of e-mail correspondence between counsel for the Plaintiff and Defendants in which the Plaintiff requests information about a self-insured retention (SIR) and the Defendants respond with a copy of a liability card from ACE/INA confirming that the Defendants’ vehicles were covered by insurance at the time in question. The Defendants responded to the Plaintiff’s further requests for information on the SIR by asking for the relevance of the SIR. The Plaintiff’s response is that the SIR is relevant to whether the Defendants can plead the minor injury cap.

The Defendants request authority for the position and the Plaintiff says that the authority is ss. 113BA (1) & (3) of the Insurance Act . Also attached to Mr. Champion’s affidavit is an excerpt of the list of Insurers licensed to sell automobile insurance in Nova Scotia. [ 4 ] The evidence for the Defendants is an affidavit of David MacCarron, the Deputy Superintendent of Insurance for Nova Scotia. The attachments show that ACE/INA insurance was licensed to sell automobile insurance in Nova Scotia for the relevant time period. [ 5 ] The motion was heard on May 25, 2020 by telephone.

Issue: [ 6 ] Is the automobile policy, including all endorsements, relevant pursuant to Rules 14.01 and 15.02? Analysis: [ 7 ] Rules 14.01 and 15.02 read: Meaning of “relevant” in

Part 5 14.01

(1) In this Part, “relevant” and “relevancy” have the same meaning as at the trial of an action or on the hearing of an application and, for greater clarity, both of the following apply on a determination of relevancy under this Part: (

a) a judge who determines the relevancy of a document, electronic information, or other thing sought to be disclosed or produced must make the determination by assessing whether a judge presiding at the trial or hearing of the proceeding would find the document, electronic information, or other thing relevant or irrelevant; Duty to make disclosure of documents 15.02(1) A party to a defended action or a contested application must do each of the following: (

a) make diligent efforts to become informed about relevant documents the party has, or once had, control of; (

b) search for relevant documents the party actually possesses, sort the documents and either disclose them or claim a document is privileged; (

c) acquire and disclose relevant documents the party controls but does not actually possess. [ 8 ] The Plaintiff’s position is that without the knowledge as to whether there is a SIR in place, the Plaintiff cannot make its best case and arguments, and the Court needs the information to decide a question of law. The Plaintiff asserts that if there is a SIR in place, the corporate Defendant is an insurer but is not licensed to sell automobile insurance in Nova Scotia and therefore cannot be protected by the minor injury cap.

She argues that the Defendants made the existence of a SIR relevant by pleading the minor injury cap. The basis of her submission is s. 113BA(3) of the Insurance Act , R.S.N.S. 1989, c. 231 (the Act ), as amended. which reads: (3) Subsection (4) of

Section 113B, subsection (1) of this

Section and subsection (3) of

Section 113E do not protect a person from liability if the person is defended in the action by an insurer that is not licensed to undertake automobile insurance in the Province, unless the insurer has filed an undertaking to become licensed to undertake automobile insurance in the Province. 2010, c. 18, s. 3 .

[ 9 ] The Defendants’ position is that whether there is a high deductible or a SIR is not relevant. The Defendants were covered by insurance at the time of the accident and proof of that coverage has been provided to the Plaintiff. The existence of a SIR or a high deductible does not transform the corporate Defendant from an insured into an insurer to lose the protection of the minor injury cap. An analysis of s. 113BA(3) using the modern approach to statutory

interpretation would not lead to the conclusion that the corporate Defendant is an insurer. Therefore the existence or non-existence of a high deductible or a SIR is not relevant. [ 10 ] There is no dispute that ACE/INA was licensed to sell automobile insurance in Nova Scotia during the relevant time period. On the evidence, the corporate Defendant was not licensed to sell automobile insurance. [ 11 ] In Saturley v. CIBC World Markets Inc., 2011 NSSC 4 , Justice Moir reviews the general principles of disclosure and discovery under the 2009 Civil Procedure Rules.

He confirms that the broader “semblance of relevance” test in the 1972 Rules has been abolished; judges are required to assess relevancy from the vantage of a trial; the determination of relevancy must be made according to the meaning of relevance in evidence law; the determination is made on the pleadings and evidence known to the judge when the ruling is made (para. 46). [ 12 ] Justice Moir’s

interpretation of relevancy was most recently reiterated by the Nova Scotia Court of Appeal in Intact Insurance Company v. Malloy , 2020 NSCA 18 . In Intact the Court said, that in light of the disclosure requirements under the Rules , a party seeking additional documentation must establish that there are other relevant documents in the possession of the other party that have not been disclosed (para. 25). The Court notes that evidence plays a central role in the production motions under the 2009 Rules (para. 39).

Motions for disclosure must be supported by evidence to avoid fishing expeditions (para. 41). [ 13 ] In the motion under consideration, the evidence that I have is that information about a SIR was requested. When the Defendants asked the relevance of the SIR, the Plaintiff responded that it was relevant to being able to claim the protection of the minor injury cap. [ 14 ] Therefore, whether the policy and endorsements are relevant rests on the

interpretation of s. 113BA(3) of the Insurance Act . The Plaintiff asked that I not go through the statutory analysis of s. 113BA(3). However, the Plaintiff’s position is that s. 113BA(3) make the policy and endorsements relevant. Determining the relevance of the policy and endorsements make it necessary to interpret s. 113BA(3). [ 15 ] The Nova Scotia Court of Appeal dealt with the statutory

interpretation of another

section of the Insurance Act in Sparks v. Holland , 2019 NSCA 3 . They set out the three questions to ask when applying the modern principle of statutory

interpretation: [29] Ms. Sullivan’s questions have been applied in several cases, including Keizer v. Slauenwhite , 2012 NSCA 20 , and more recently, in Tibbetts . In

summary, the Sullivan questions are: 1. What is the meaning of the legislative text? 2. What did the Legislature intend? 3. What are the consequences of adopting a proposed

interpretation? (Sullivan, pp. 9-10) [ 16 ] The plain meaning of s. 113BA(3) is to exclude insurers not licensed to undertake automobile insurance in Nova Scotia from the protection of the minor injury cap. Clearly here the Defendants are insured by ACE/INA, who both parties agree was licensed to undertake automobile insurance in Nova Scotia during the relevant time. ACE/INA is required to defend the Defendants in any civil action ( Insurance Act, s.119 (b)). Insurer is defined in s 3 (

n) as: “insurer” means the person, corporation, underwriter, partnership, fraternal or other society, association, or syndicate who undertakes or agrees or offers to undertake a contract”. Insured is a person who makes a contract with an insurer (s. 3(m)). [ 17 ] In Tibbetts v.

Murphy , 2017 NSCA 35 and in Sparks the Nova Scotia Court of Appeal found that the intent of the Legislature, when the minor injury cap and other amendments were made to the Insurance Act , was to reduce insurance premiums and reduce damage awards. [ 18 ] The Plaintiff submits that the insurer ACE/INA may never be required to respond if the SIR, or perhaps the deductible, is higher than damages awarded. That would make the insured an insurer and without the protection of the minor injury cap. The consequences of the Plaintiff’s

interpretation would be an increase in the number of cases where the minor injury cap does not apply. Insured with a SIR, or with a high deductible, could lose the protection of the minor injury cap. That would be contrary to the legislative intent. Where there are two

interpretations possible, the

interpretation that is consistent with the legislative intent should be adopted ( Sparks paras. 43 and 74 ). The Defendants’

interpretation is consistent with the legislative intent. [ 19 ] Based on the evidence before me on this motion, s. 113BA(3) of the Insurance Act does not make the Corporate Defendant an insurer who must be licensed to sell automobile insurance in Nova Scotia. Based on the evidence before me on this motion, the Defendants are not excluded from the protection of the minor injury cap. [ 20 ] The Plaintiff’s

interpretation was the basis for the policy and endorsements to be relevant and disclosable. Therefore I dismiss the Plaintiff’s motion. Conclusion [ 21 ] The Plaintiff’s motion is dismissed. I will hear the parties in relation to costs in relation to this motion.

Lynch, J.