CAA Insurance Co. (Ontario) v. Maloney

CAA Insurance Company (Ontario), Plaintiff and Wayne Maloney, Defendant

Ontario Superior Court of Justice

Cullity J.

Heard: March 28, 2002
Judgment: April 2, 2002
Docket: 01-CV-220428 SR

Counsel: Larry W. Keown, for Plaintiff

Wayne Maloney, for himself

Subject: Insurance; Civil Practice and Procedure

Insurance — Actions on policies — Practice and procedure — Summary judgment

Insurer brought action against defendant under simplified procedure prescribed by R. 76 of Rules of Civil Procedure — Insurer claimed damages representing amounts paid to defendant under policy of insurance covering vehicle of which defendant was allegedly owner and which defendant claimed was damaged in collision — Causes of action were based on fraudulent misrepresentations allegedly made by defendant — Insurer alleged that damaged vehicle was stolen and was not insured vehicle, that defendant knew that fact and that he deliberately took steps to conceal it by exchanging serial numbers on damaged vehicle for those of insured vehicle — Insurer brought motion for sum-mary judgment, at hearing of which defendant was unrepresented — Motion dismissed — Special procedure in R. 76.06 should not be permitted to work unfairly to unrepresented parties by exacerbating disadvantages of their posi-tion — Insurer’s claims depended on fraud, which in present context required proof of deliberate attempt to deceive or make false representations with reckless indifference to their truth or falsity — Defendant, at least impliedly, de-nied that he had requisite state of mind or that he was involved in theft of damaged vehicle or in tampering with its serial numbers — Defendant’s credibility had to be at forefront of any judicial determination of case — Procedure based exclusively on affidavits, without cross-examination, significantly hindered defendant’s ability to defend him-self — Defendant was entitled to be permitted to give evidence viva voce and to be subject to cross-examination and any questions that court might find it appropriate to ask — Present case fell within R. 76.06(14)(b), as it would have been unjust to decide issues on motion — Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R. 76.06, 76.06(14)(b).

Practice — Trials — Simplified procedure — Summary judgment

Insurer brought action against defendant under simplified procedure prescribed by R. 76 of Rules of Civil Procedure — Insurer claimed damages representing amounts paid to defendant under policy of insurance covering vehicle of which defendant was allegedly owner and which defendant claimed was damaged in collision — Causes of action were based on fraudulent misrepresentations allegedly made by defendant — Insurer alleged that damaged vehicle was stolen and was not insured vehicle, that defendant knew that fact and that he deliberately took steps to conceal it by exchanging serial numbers on damaged vehicle for those of insured vehicle — Insurer brought motion for sum-mary judgment, at hearing of which defendant was unrepresented — Motion dismissed — Special procedure in R. 76.06 should not be permitted to work unfairly to unrepresented parties by exacerbating disadvantages of their posi-tion — Insurer’s claims depended on fraud, which in present context required proof of deliberate attempt to deceive or make false representations with reckless indifference to their truth or falsity — Defendant, at least impliedly, de-nied that he had requisite state of mind or that he was involved in theft of damaged vehicle or in tampering with its serial numbers — Defendant’s credibility had to be at forefront of any judicial determination of case — Procedure based exclusively on affidavits, without cross-examination, significantly hindered defendant’s ability to defend him-self — Defendant was entitled to be permitted to give evidence viva voce and to be subject to cross-examination and any questions that court might find it appropriate to ask — Present case fell within R. 76.06(14)(b), as it would have been unjust to decide issues on motion — Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R. 76.06, 76.06(14)(b).

Cases considered by Cullity J.:

McGill v. Broadview Foundation, 2001 CarswellOnt 70, 6 C.P.C. (5th) 109 (Ont. C.A.) — considered

Newcourt Credit Group Inc. v. Hummel Pharmacy Ltd., 1998 CarswellOnt 321, 38 O.R. (3d) 82, 18 C.P.C. (4th) 319, 113 O.A.C. 389 (Ont. Div. Ct.) — referred to

Torstar Electronic Publishing Ltd. v. Asian Television Network Inc., 2000 CarswellOnt 2570, 4 C.P.C. (5th) 101 (Ont. S.C.J.) — referred to

Rules considered:

Rules of Civil Procedure, R.R.O. 1990, Reg. 194

R. 20 — referred to

R. 20.04 — referred to

R. 76 [en. O. Reg. 533/95] — pursuant to

R. 76.06 [en. O. Reg. 533/95] — considered

R. 76.06(14) [en. O. Reg. 533/95] — considered

R. 76.06(14)(a) [en. O. Reg. 533/95] — considered

R. 76.06(14)(b) [en. O. Reg. 533/95] — considered

MOTION by plaintiff insurer for summary judgment.

Cullity J.:

1 At the conclusion of the hearing I dismissed the plaintiff’s motion for summary judgment.

2 The action was commenced under, and is governed by, the simplified procedure prescribed by rule 76. The plaintiff claims damages of $20,979.68 representing amounts paid to the defendant under a policy of insurance cov-ering an automobile (the “Insured Land Rover”) of which he was allegedly the owner and which he claimed was damaged in a collision with other vehicles. There is also a claim for a declaration that the plaintiff is the legal and beneficial owner of a vehicle (the “Seized Land Rover”) allegedly purchased by the defendant with part of the amounts paid to him by the plaintiff. The causes of action are based on fraudulent misrepresentations allegedly made by the defendant.

3 The plaintiff moved for summary judgment pursuant to rule 76.06 and, for this purpose, delivered an affidavit of one of its claims’ adjusters. If the contents of the affidavit are accepted as accurate in all respects, they would estab-lish that, when applying for the insurance, the plaintiff misrepresented that he was the owner of the Insured Land Rover, that there were no liens on the vehicle, that he had no convictions relating to the operation of motor vehicle in the preceding three years and that his licence had not been suspended during the previous six years.

4 If accepted, the statements in the affidavit, and the supporting documentation, would, in my judgment, also be sufficient to prove that the Land Rover (the “Damaged Land Rover”) that was involved in the collision was a stolen vehicle and not the Insured Land Rover, that the defendant knew this and that he deliberately took steps to conceal it by exchanging serial numbers on the Damaged Land Rover for those of the Insured Land Rover.

5 It is not disputed that, after claiming and receiving compensation under the policy covering the Insured vehicle, the defendant purchased the Seized Land Rover. This was subsequently taken from him by the police pending a criminal investigation, and the trial of charges, relating to the theft of the Damaged Land Rover and the allegations of fraud to which I have referred.

6 The plaintiff’s motion for summary judgment was set down for February 28, 2002. On that day the defendant was present and not represented. He requested an adjournment for the purpose of delivering a statement of defence and any material he might wish to file for the purpose of the motion for summary judgment. This request was granted by Backhouse J. On the return of the motion before Spiegel J., the defendant provided the court with a statement of defence but no affidavit for the purpose of the motion. He stated that he was not aware that this was required. A further adjournment was granted and the defendant subsequently provided the plaintiff’s counsel with an affidavit with unmarked exhibits. This document shows no signs of having been prepared with legal — or paralegal — assistance. It is brief and inadequate as a response to that sworn by the plaintiff for the purpose of the motion. Its main thrust is to deny that the plaintiff has evidence that the defendant attempted to mislead or defraud the plaintiff. At the best, it may be considered to contain, by implication, a denial that any such attempt was made. It does not address several of the most serious allegations in the affidavit filed on behalf of the plaintiff including the alleged misrepresentations made at the time of the application for the insurance.

7 The defendant was not represented at the hearing on March 28, 2002 and, when I invited him to provide me with reasons why summary judgment should not be granted — why cross-examination should be permitted or why it would otherwise be unjust to grant judgment to the plaintiff — he attempted to supplement his affidavit by providing the court with further information some of which would have filled in gaps in his affidavit but much of which was irrelevant.

8 Rule 76.06(14) provides as follows:

On a motion for summary judgment under this rule, the presiding judge shall grant judgment unless,

(a) the judge is unable to decide the issues and the action in the absence of cross-examination; or

(b) it would be otherwise unjust to decide the issues on the motion.

9 Counsel for the plaintiff submitted that the defendant had an obligation to put his best foot forward and that, on this basis, there was a compelling case for the plaintiff on the record and that an order granting summary judgment would be consistent with the purpose of the rule — namely, to enable a prompt and economical disposition of litiga-tion in circumstances where there is no significant credibility or evidentiary dispute requiring a trial. He referred me to authorities that indicate that the test for summary judgment under rule 76.06(14) is less onerous than that under rule 20.

10 The emphasis, he submitted, should be on justice and fairness, rather than on whether a genuine issue for trial exists, and the court is entitled to — and should — make determinations of fact and credibility unless unable to do so without cross-examination. While support for these propositions can be found in the authorities cited by counsel — and while I accept that on the basis of the written record the probabilities weigh heavily in favour of the plaintiff’s case — I did not think this was sufficient to entitle the plaintiff to summary judgment.

11 The plaintiff’s claims depend on fraud which, in the present context, requires proof of a deliberate attempt to deceive or, at least, false representations made with reckless indifference to their truth or falsity. The defendant has, at least impliedly, denied that he had the requisite state of mind or that he was involved in the theft of the Damaged Land Rover or in tampering with its serial numbers. His credibility must be at the forefront of any judicial determi-nation of this case. It would, I believe, be unwarranted and unjust in the present circumstances to find, on the basis of the written record, that no genuine issue of credibility arises and to grant judgment on that basis. Moreover, while I do not intend to suggest that summary judgment under rule 76.06 should never be granted against an unrepresented party, it is clear that the procedure based exclusively on affidavits — without cross-examination — significantly hin-dered the defendant’s ability to defend himself. He should, in my judgment, be permitted to give evidence viva voce and be subject to cross-examination as well as to any questions that the court might find it appropriate to ask.

12 In his affidavit he was critical of some of the evidence on which the plaintiff relied and, in his unsworn state-ments at the hearing, he attempted to elaborate on these criticisms and to provide explanations of other matters al-leged against him. He claimed that the owners of the stolen vehicle and the auto body shop had exonerated him of the charges of theft, and of tampering with, the Damaged Land Rover. The unmarked exhibits to his affidavit were not inconsistent with these claims but provided no significant support for them. Although, on the basis of the written record, the case against him may appear formidable to say the least, I found that justice requires that he be permitted to have his day in court so that he can give a full account of the relevant facts, put his credibility on the line when he is giving viva voce evidence, subpoena witnesses whose evidence he wishes to rely on and cross-examine witnesses of the plaintiff whose evidence he disputes.

13 It is trite that unrepresented parties are usually at a serious disadvantage in litigation. The special procedure in rule 76.06 should not be permitted to work unfairly to such parties by exacerbating the disadvantages of their posi-tion. It is difficult enough for them to do justice to their cases when called upon, unassisted, to give evidence in-chief and to cross-examine in open court. It can be, as I believe it was in this case, much more difficult to prepare affidavits that would be sensitive, and respond, to the evidence in affidavits sworn by moving parties who had the benefit of legal assistance provided with a view to the procedures and standards imposed by rule 76.06 — a provision of which the defendant, like virtually all other Canadians, must previously have been blissfully ignorant.

14 I dealt with this case on the basis that the test is not simply whether there is a genuine issue for trial — that the plaintiff may be entitled to summary judgment under rule 76.06(14) even where such an issue exists. This is an ac-cordance with the approach of the Divisional Court in Newcourt Credit Group Inc. v. Hummel Pharmacy Ltd. (1998), 38 O.R. (3d) 82 (Ont. Div. Ct.) the continuing correctness of which was doubted by Wilkins J. in Torstar Electronic Publishing Ltd. v. Asian Television Network Inc., [2000] O.J. No. 2748 (Ont. S.C.J.). As I have found that the more lenient test has not been satisfied, it is unnecessary to consider whether the approach preferred by the learned judge, that would limit summary judgment under the simplified rules to cases where there is no genuine tri-able issue, should be applied. It does appear to me to be reasonable to attribute significance to the difference in the wording of rules 20.04 and 76.06(14) although I do not think that the Divisional Court was intending to suggest that the existence of a triable issue can have no bearing on the question whether it would be unjust to dispose of the case on a motion for summary judgment. In any event, it is clear that where rule 76.06(14) is applicable, the inquiry must be directed at the questions referred to in, and framed in the language of, paragraphs (a) and (b) of the rule.

15 In McGill v. Broadview Foundation, [2001] O.J. No. 108 (Ont. C.A.), the court stated:

The purpose of rule 76.06 is to allow the parties to bring forward a relatively inexpensive application for summary judgment…. Summary judgment can only be granted when all the evidence reviewed in total upon applying the principles of justice and fairness demonstrates a clear case wherein the motions judge may en-ter judgment. In circumstances where the case is not clear or where it dictates that justice and fairness would suggest otherwise, it is appropriate for the judge to refer the matter to trial.

16 While, on the written record, this might have seemed to be a clear case, it was in, my judgment, one that should be considered to fall within rule 76.06(14)(b).

17 In summary, the nature of the causes of action asserted by the plaintiff and of the inquiry to be made by the court, the crucial importance of findings of credibility and the inhibitions imposed by the simplified rules on the unrepresented defendant persuaded me that it would be unjust to decide the issues in this case on a motion for sum-mary judgment. In consequence, the motion was dismissed.

18 Counsel for the plaintiff undertook to use his best efforts to have this action set down for trial as soon as possi-ble. The order of Backhouse J. requiring that the police authorities retain possession of the Seized Land Rover (VIN #SALJY1242 SA138342) is to remain in force until further order of the court.

Motion dismissed.