Loss Transfer And Tort: Never The Twain Shall Meet
Recent work on cases has lead me to resurrect some older loss transfer case law that might still assist practitioners with their current cases. The first is the case from our Court of Appeal in...
Canada
Litigation, Mediation & Arbitration
Recent work on cases has lead me to resurrect some older loss
transfer case law that might still assist practitioners with their
current cases. The first is the case from our Court of Appeal
in Jevco v. Canadian General, dated August 6,
1993. Jevco sought appeal of the denial of its application to
appoint an arbitrator in loss transfer (remember the provisions of
automatic appointment in
priority disputes do not apply
to loss transfer and an Application is necessary where there is no
agreement amongst the parties to appoint or whom to appoint).
The use to which I again sought it out was regarding how
a finding of fault in a related tort matter might affect a loss
transfer matter that was subject to the ordinary rules of law, per
Rule 5 of Regulation 668, instead of the Rules themselves.
Recall the Fault Determination Rules were initially
promulgated for property damage claims and are often a bit of a
square peg in a round hole and have lead to a lot of litigation
over their interpretation in the context of loss transfer. In
overturning the original decision that a stay of loss
transfer was warranted by reason of the existence of the tort
action, Justice Griffiths, at the second paragraph of the
Conclusion, and repeated at paragraph four thereof, focussed upon
the intended expediency of the scheme and said quite emphatically
that "any determination of fault in litigation between the
injured plaintiff and the alleged tortfeasor is
irrelevant." Jevco was granted its arbitrator
appointment with costs of the appeal but not of the Application,
due to its novelty. The citation for the decision is 14
O.R. (3d) 545. There was no appeal taken beyond
Ontario's top Court.
The second case is the February 6, 2008 private arbitration
award of Jay Rudolph in Unifund and Axa v. St.
Paul. Reference to it is found at #11 of the list of
decisions upon the Rudolph Mediation & Arbitration Services
Inc. website (see http://rudolphmediation.com/arbitration-decisions-released-by-j-jay-rudolph/).
Unfortunately, the index of decisions on the website does not
appear to be a complete list of all of Jay's awards and they
are not hyperlinked. Converse to the prior case, this case
does permit consideration of a Highway Traffic Act conviction to
govern in a loss transfer matter. The case is 25 pages long
and too extensive to deal with comprehensively in a short
summary. Suffice it to say that in this case accident
benefits were being requested from St. Paul by the other
two insurers due to the fault for the loss attributed to the driver
of its described transport truck. She pleaded guilty to
careless driving and both applicants sought to preclude St.
Paul, by the flexible doctrine of abuse of process (as
distinguished from issue estoppel, collateral attack
or res judicata, which focus more on the interests of
the parties), from adducing evidence inconsistent with the facts
forming the basis for the conviction by way of guilty plea by her
lawyer (she was not present at the HTA proceeding).
Arbitrator Rudolph relied heavily upon the Supreme Court of Canada
case in Toronto v. C.U.P.E., Local 79, [2003] 3
S.C.R. 77. In siding with the loss transfer applicants, he
found that the three tests (fraud, fresh evidence and fairness)
were not met by St. Paul, which
would otherwise be reason to relitigate the
liability issue and would enhance, not impeach, the principles of
economy, consistency, finality and integrity of our judicial
system. The HTA proceeding of St. Paul's insured was
admitted by the parties not to have been fraudulent. Fresh
evidence must be admissible, discussed at page 21 of the
arbitrator's award, but still might be excluded if the
explanation why it was not adduced at first instance is
inadequate. Arbitrator Rudolph found St. Paul's evidence
not fresh and, although generally admissible, there was no
reasonable explanation why it had not been adduced at the HTA
proceeding. Having found as he did, he did not feel impelled
to decide if the evidence would have affected the outcome of the
HTA proceeding. He makes a particularly insightful comment at
the bottom of page 23 why St. Paul should be bound by the
conviction, which I invite readers of this summary to review and
digest. In the final analysis, St. Paul was bound by the
conviction, the facts essential to it and could not lead evidence
contrary to those facts. Therefore, albeit subject
to the latter, St. Paul was still permitted to lead
evidence of the alleged contributory negligence of
Unifund's insured driver. Legal costs, although the party
responsible was not specified, presumably followed the cause.
St. Paul was responsible for the arbitrator's
account. The award was not appealed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.