Russell v. Aviva Canada Inc., 2022 NSSC 2

SUPREME COURT OF Nova Scotia Citation: Russell v. Aviva Canada Inc., 2022 NSSC 2 Date: 20220106 Docket: Hfx No 465768 Registry: Halifax Between: Dustin W. Russell Plaintiff v. Aviva Canada Inc., Lisa Muise and Jason Clark Defendants DECISION ON MOTION TO AMEND Judge: The Honourable Justice Scott C. Norton Heard: December 20, 2021, in Halifax, Nova Scotia Decision: January 6, 2022 Counsel: Jane Lenehan and Augustus M. Richardson, Q.C., for the Plaintiff/ Applicant Jocelyn M. Campbell, Q.C. and John Boyle, for the Defendant/ Respondent Aviva Canada Inc.

Sheree Conlon, Q.C., for the Defendant Muise (not participating) Jason Clark, self-represented, not participating By the Court: Introduction [ 1 ] This proceeding is a consolidation of two separate Notices of Action filed by the Plaintiff, Dustin Russell, arising from a motor vehicle collision. One Action is against the owner and operator of the vehicle that was involved in the collision with his own vehicle. The other Action claims for insurance coverage under

Section D of his own automobile insurance policy in the event that the other vehicle was not insured.

Section D coverage is limited to $500,000 by statute. [ 2 ] The Plaintiff wishes to amend the Action against his insurer to claim for the coverage provided under a Family Protection Endorsement to the automobile policy, known as an SEF 44 Endorsement (“SEF 44”). Mr. Russell purchased an automobile insurance policy with one million dollars coverage. He is concerned that the amount of damages he is entitled to could exceed the amount of insurance available from either Muise and Clark, or his own policy under

Section D. In that case, he could have a claim under the SEF 44 for the difference.. [ 3 ] The Plaintiff moves for an Order to amend the Notice of Action and Statement of Claim against the Defendant Aviva Canada Inc. (“Aviva”). In addition, the Plaintiff moves for an Order disallowing Aviva from asserting a limitation defence. Aviva does not object to the amendment per se , but says that the claim for coverage under the SEF 44 is barred by the passage of time. Evidence

[ 4 ] In support of the motion the Plaintiff filed affidavits by the Plaintiff Dustin Russell sworn on July 21, 2021; Jane Lenehan, counsel for the Plaintiff, sworn on July 20, 2021; and Sean Layden Q.C., former counsel for the Plaintiff, sworn on July 20, 2021. Aviva filed one affidavit from a legal assistant to their counsel, sworn August 23, 2021. Facts [ 5 ] The Plaintiff was injured in a motor vehicle collision that occurred on December 26, 2014 in Greenfield, Colchester County, Nova Scotia.

His 2005 Mazda motor vehicle was insured by Aviva pursuant to a Nova Scotia Standard Automobile Insurance Policy with an SEF 44 Family Protection Endorsement. The Policy limits were one million dollars. [ 6 ] The other vehicle involved in the collision was a 1988 Chevrolet pickup truck owned by Lisa Muise and being operated by Jason Clark. The Chevrolet truck was insured by Co-Operators. Co-Operators has not disclosed the monetary limits of their policy.

As of December 26, 2014 when the collision occurred, the statutory minimum automobile insurance coverage in Nova Scotia was $500,000 ( s. 125(1) of the Insurance Act , RSNS 1989, c. 231 ). [ 7 ] The Plaintiff retained Sean Layden, Q.C. to represent him with respect to his claims for damages for personal injury. Mr. Layden was advised by the Co-Operators adjuster that they were denying coverage on the basis that Mr. Clark did not have consent to use the truck. In response to this information the Plaintiff filed a Notice of Action and Statement of Claim against Aviva on July 17, 2017 claiming coverage under

Section D of his own automobile insurance policy.

Section D provides coverage up to the limits prescribed in the Insurance Act ($500,000) in the event the party at fault is uninsured. [ 8 ] On April 4, 2017, Mr. Layden contacted Aviva by email and advised of a potential claim under the SEF 44 (that could provide additional coverage in the event that his damages award exceeded the amount payable from either the Co-Operators’ policy or

Section D of his own policy). On June 6, 2017, Aviva acknowledged receipt of notice of the SEF 44 claim. [ 9 ] On August 4, 2017, the Plaintiff filed a separate Notice of Action and Statement of Claim against Lisa Muise and Jason Clark. The two Actions were consolidated by consent Order filed May 14, 2020. [ 10 ] Mr. Layden took a leave of absence from practice in May 2019 and left his firm in December 2019 when Jane Lenehan took over conduct of the Plaintiff’s claims. [ 11 ] The present motion was filed April 19, 2021. Law [ 12 ] The amendment sought is governed by Civil Procedure Rules 83.02 and 83.11 that provide: 83.02 Amendment of notice in an action

(1) A party to an action may amend the notice by which the action is started, a notice of defence, counterclaim, or crossclaim, or a third party notice.

(2) The amendment must be made no later than ten days after the day when all parties claimed against have filed a notice of defence or a demand of notice, unless the other parties agree or a judge permits otherwise.

(3) A pleading respecting an undefended claim in an action may be amended at any time, but the party claimed against is entitled to receive notice of the amended pleading in the manner provided in Rule 31 - Notice for notice of an originating document. 83.11 Amendment by judge

(1) A judge may give permission to amend a court document at any time.

(2) An amendment cannot be made that has the effect of joining a person as a party who cannot be joined under Rule 35 - Parties, including Rule 35.08(5) about the expiry of a limitation period.

(3) A judge who is satisfied on both of the following may permit an amendment after the expiry of a limitation period, or extended limitation period, applicable to a cause of action: (

a) the material facts supporting the cause are pleaded; (

b) the amendment merely identifies, or better describes, the cause. [ 13 ] The limitation period in question is contained in paragraph 6(

c) of the SEF 44, titled “Procedures”, and provides: (

c) Every action or proceeding against the Insurer for recovery under this endorsement shall be commenced within 12 months from the date upon which the eligible claimant or his legal representatives knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction in which the accident occurred. No action which is commenced within 2 years of the date of the accident shall be barred by this provision. [ 14 ] As a preliminary matter, the Limitation of Actions Act , SNS 2014, c.35 , (“ LAA ”) prescribes a two-year limitation period for all civil claims.

Section 21 of the LAA provides: Agreements

(1) A limitation period established by this Act may be extended, but not shortened, by agreement. (2) Subsection (1) does not affect an agreement made before the coming into force of this Act. As the limitation period in question is contained in an agreement that was made before the coming into force of the LAA,

section 21 does not affect the limitation period under consideration. Cameron v. Nova Scotia Association of Health Organizations Long Term Disability Plan , 2019 NSCA 30 . [ 15 ]

Section 22 of the LAA permits a claim to be added notwithstanding a limitation period established by the LAA . The

section provides: Claims added to proceedings 22 Notwithstanding the expiry of the relevant limitation period established by this Act , a claim may be added, through a new or amended pleading, to a proceeding previously commenced if the added claim is related to the conduct, transaction or events described in the original pleadings… [Emphasis added] [ 16 ] The limitation period in question was not established by the LAA .

Section 22 has no application to the motion before the Court. United Pentecostal Church of Nova Scotia v. Nova Scotia Power Incorporated , 2020 NSSC 286 . Analysis [ 17 ] The Applicant’s submission is that the Court has authority to permit the amendment notwithstanding the possible expiration of the limitation period. For the purpose of this analysis I will assume that the 12 month limitation period within the SEF 44 has expired. [ 18 ]

Section 83.11(3) provides:

(3) A judge who is satisfied on both of the following may permit an amendment after the expiry of a limitation period, or extended limitation period, applicable to a cause of action: (

a) the material facts supporting the cause are pleaded; (

b) the amendment merely identifies, or better describes, the cause. [ 19 ] This Rule was considered in Parsons v. S. Cunard & Company Ltd. , 2011 NSSC 191 , wherein the plaintiffs commenced action against the defendants. Defences were filed. The plaintiffs and one defendant settled the plaintiffs’ claim against that defendant, and obtained an order issued by a deputy prothonotary dismissing the plaintiffs’ claim against that defendant without notice to the second defendant. The plaintiffs moved to amend the statement of claim.

The second defendant, upon receiving notice of the dismissal order, moved to set aside the dismissal order and amend her defence to include a cross-claim against the first defendant. [ 20 ] Justice Coughlan described the test as follows, at para 14: [14] In order to permit an amendment after the expiry of a limitation period, I must be satisfied first the material facts supporting the cause are pleaded. In reviewing the statement of claim issued May 31, 2007, I find material facts supporting claims based on Rylands v. Fletcher and nuisance were pleaded.

I also find the amendments concerning the claims pursuant to Rylands v. Fletcher and nuisance identifies or better describes the cause of action. The proposed causes of action arise out of essentially the same facts as those originally pleaded. As Cromwell, J.A., as he then was, stated in Garth v. Halifax (Regional Municipality) 2006 NSCA 89 at para. 29 : ... The question is not whether the expiry of the limitation period trumps the power to amend, but whether it is just to grant the amendment even though the limitation period has expired.

The discretion to amend must, of course, be exercised judicially in order to do justice between the parties. Generally, amendments should be granted if they do not occasion prejudice which cannot be compensated in costs. ... However, the expiry of the limitation period is a strong signal of the risk of injustice to the defendant if the amendment is granted.

The court must consider all relevant matters which may include, but are not limited to, the length of the delay in asserting the claim and the reasons for it, how closely the new claim is connected to the claim originally pleaded and the nature and extent of any prejudice resulting from the claim being asserted now as opposed to before the limitation period expired . [15] I find I have discretion to allow the amendments to the statement of claim if appropriate. [16] Normally amendments to pleadings are allowed unless the party opposing the motion demonstrates the applicant is acting in bad faith or that, should the amendment be allowed, the other party will suffer prejudice which cannot be compensated in costs. [Emphasis added]

[ 21 ] I note that Justice Coughlan was dealing with the former limitation legislation and Justice Cromwell was dealing with the Nova Scotia Civil Procedure Rules (1972) . However, there is no difference in the application of the principles stated in those decisions to the consideration of this motion. [ 22 ] The first question is whether the material facts supporting a claim for coverage under SEF 44 were pleaded. I find that they were. The only material fact that Aviva identified as not pleaded was reference to the SEF 44 wording. Aviva says that the claim for coverage under

Section D was pursuant to the Standard Automobile Policy and the claim for coverage under an SEF 44 is for coverage under a separate, optional endorsement. [ 23 ] The Statement of Claim against Aviva filed July 17, 2017 says: 3. At all times material hereto, the Defendant Aviva had issued an automobile policy in standard owner’s form to the Plaintiff, Dustin W. Russell, bearing the number A68223646PLA, hereinafter known as the “Policy” , by the terms of which Dustin W. Russell was the named insured and the Plaintiff’s motor vehicle was the described automobile. 4. The Plaintiff’s motor vehicle was insured by the Policy which included provisions under

Section “D” for uninsured and unidentified automobile coverage under which the Defendant’s motor vehicle was an insured automobile and by the terms of which the Plaintiff was a person insured under the Policy and which Policy provided coverage whereby the Defendant Aviva agrees to pay all sums that a person is legally entitled to recover from the owner or driver or an uninsured automobile or unidentified automobile as damages for bodily injury to or the death of a person insured under this Policy resulting from an accident involving an automobile. 5.

On or about the 26 th of December, 2014, at approximately 11:00 p.m., the Plaintiff was operating the Plaintiff’s motor vehicle on Greenfield Road, a public highway, at or near Greenfield, Colchester County, Province of Nova Scotia, when a1998 Chevrolet, owned by Lisa Muise, operated by Jason Clark and insured by the Co-operators, travelling in the same direction, behind the Plaintiff, crossed over double solid lines and attempted to overtake the Plaintiff’s motor vehicle, causing a collision with the Plaintiff’s motor vehicle. 6.

The injuries sustained by the Plaintiff as a result of the above-noted accident while the Plaintiff was operating the Plaintiff’s motor vehicle triggered the need to avail himself of the

Section D benefits from the Defendant Aviva. 7. The Plaintiff has been informed the insurance company for the owner of the other vehicle is denying coverage based on lack of consent and driving under the influence. … 9. The Plaintiff repeats the foregoing and states that he is a person insured under the Policy as that term is defined in that contract. … 12. The Plaintiff states that the Defendant Aviva has breached its contractual obligations to the Plaintiff and has acted in bad faith towards him. … 14. This party claims an Order providing the following remedies: (

a) A declaration stating that the Plaintiff is entitled to indemnity under the Policy. … [ 24 ] Aside from naming the SEF 44, all of the facts material to making a claim for coverage under that endorsement are contained in the Statement of Claim. The Statement of Claim alleges breach of the contractual obligations by Aviva. The SEF 44 endorsement is part of the contract of insurance. It is identified on its face by the same policy number as being part of the same policy. That policy is made up of the standard owner form wording as well as the SEF 44.

In my view the amendment simply better describes the cause against Aviva as consisting of these two parts. [ 25 ] Mr. Layden gave notice to Aviva of a possible claim for SEF 44 coverage. Aviva did not provide any evidence that they did not open a claim for that coverage at that time. Aviva led no evidence as to if, or how the claim for SEF 44 coverage would have been handled differently. There is no evidence that there was any information that Aviva could or would have asked the Plaintiff to provide them relevant to the SEF 44 claim that they did not receive in respect of the

Section D claim. Aviva led no evidence of any other prejudice. [ 26 ] I have considered all relevant matters, including the length of the delay in asserting the claim and the reasons for it, how closely the new claim is connected to the claim originally pleaded and the nature and extent of any prejudice resulting from the claim being asserted now as opposed to before the limitation period expired. [ 27 ] In the circumstances of this case I find that it is just to exercise my discretion to permit the proposed amendment even if the limitation period expired.

It would be unjust to allow Aviva to maintain a defence of limitation. [ 28 ] Given my conclusion on this issue there is no need to determine when the limitation period began to run and whether it expired. [ 29 ] The motion is allowed. I order that the Plaintiff is permitted to amend his Notice of Action and Statement of Claim to add a SEF 44 claim against the Defendant Aviva. I order that Aviva is not allowed to assert a defence that the limitation period for the SEF 44

claim has expired. [ 30 ] The Plaintiff shall file the Amended Notice of Action and Statement of Claim on or before January 31, 2022. Aviva may file any amended Defence within 15 days of the receipt of the filed Amended Notice of Action. [ 31 ] The parties agreed that in the event the motion was allowed there would be no costs awarded on the motion. [ 32 ] Order accordingly. Norton, J.