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HEARSAY - March 2017: In This Edition

Case Comments
Featured Articles

CDL General

Case Comments


By David S. Wilson and Chris McKibbin
Blaney McMurtry LLP

In the recent decision of Citizens Bank Holding Inc. v. Atlantic Specialty Insurance Co., the U.S. District Court for the Eastern District of Wisconsin held that forged business loan guarantees purportedly issued by the U.S. Department of Agriculture (USDA) did not qualify for indemnity under Insuring Agreements D or E of a Financial Institution Bond.  The decision is notable in that it reaffirms the interpretive principle that the Bond is not to be interpreted contra proferentem, as it is a product of negotiation between the banking and fidelity insurance industries.  

The Facts

Citizens Bank maintained an investment advisory agreement with Pennant Management, Inc. (“Pennant”), a company engaged in acquiring USDA-guaranteed loans on behalf of community banks.  Pursuant to this agreement, Citizens Bank began purchasing shares in loan pools administered by Pennant. 
In 2013, Pennant entered into a master repurchase agreement with First Farmers Financial LLC (“First Farmers”), a company approved by the USDA as an eligible lender for certain USDA loans.  Under the terms of the master repurchase agreement, Pennant, on behalf of its clients, agreed to purchase from First Farmers guaranteed portions of USDA loans and supporting agreements, documents, and instruments, including USDA-issued Assignment Guarantee Agreements (AGAs). 
Beginning in 2013, Pennant purchased, on behalf of Citizens Bank, 25 USDA-guaranteed loans purportedly originated by First Farmers.  Citizens Bank’s investment in the loan pool totaled $15 million.  For each loan, Citizens Bank’s custodian received an original USDA AGA that contained an original ink signature purporting to be that of a USDA state director. 
In 2014, Pennant discovered that the First Farmers loans were fictitious and that the signatures on the AGAs were forged.  The identified borrowers and collateral were fictitious and the CPA who allegedly audited First Farmers did not exist.  First Farmers refused Pennant’s request to repurchase the loans it purportedly originated, and the USDA refused Pennant’s demand to honor the AGAs, reasoning that it had not guaranteed any valid loans.  As a result, Citizens Bank lost its investment. 

The Coverage

Citizens Bank pursued a claim under Insuring Agreements D (Forgery) and E (Securities) of its Bond, and ultimately moved for summary judgment against its insurer, Atlantic.  Before the District Court, Citizens Bank contended that certain provisions of the Bond had to be interpreted contra proferentem.  The District Court reviewed the principles for interpreting Financial Institution Bonds and rejected Citizens Bank’s contention, applying the principle, recognized since at least Sharp v. FSLIC in 1988, that the contra proferentem rule “generally does not apply where the policy in question is a standard Bankers Blanket Bond, drafted by representatives from both the banking and insurance industries.”
The Court then considered coverage under Insuring Agreement E(1), which indemnified for:  

Loss resulting directly from the Insured having, in good faith, for its own account or for the account of others: … acquired, sold, delivered, or given value, extended credit or assumed liability, on the faith of any original Written document that is a:
(a) Certificated Security … [or]
(g) corporate, partnership or personal Guarantee …
which … bears a handwritten signature of any … guarantor … that is a Forgery.
Citizens Bank asserted that the forged AGAs qualified as certificated securities, or as corporate or personal guarantees.  Atlantic took the view that the AGAs did not fall within either category of documents. 
The Court first determined that the AGAs were not certificated securities.  The Bond defined a “Certificated Security” as:
a share, participation or other interest in property of, or an enterprise of, the issuer or an obligation of the issuer, which is:
(a) represented by an instrument issued in bearer or registered form;
(b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment; and
(c) either one of a class or series or by its terms divisible into a class or series of shares.
Citizens Bank contended that an AGA “is a ‘class’ of obligation ‘issued by the USDA’ in ‘registered’ form and ‘commonly recognized’ as a ‘medium of investment’ in the secondary market for USDA guaranteed loans.”  Atlantic responded that the Bond defined guarantees and certificated securities separately, and that the documents in issue were self-identified as guarantees.  Further, an AGA was not a share, nor was it divisible into shares. 
The Court held that a reasonable insured would not expect the AGAs to qualify as certificated securities under the Bond, observing that, while one could try to classify an AGA as a certificated security by separating each of the terms used in defining the document, “such terms must be viewed in context of the Bond as a whole and not in isolation.”  As the AGAs were labeled as guarantees, and fit within the definition of “guarantee” used in the Bond, it was not reasonable to accept that the parties intended such documents to also qualify as certificated securities. 
The Court then considered whether the AGAs were “corporate, partnership or personal” guarantees.  Citizens Bank contended that they represented (i) corporate guarantees, because the USDA acts in a corporate capacity in providing loan guarantees; and (ii) personal guarantees, because the USDA, as a political body, is an artificial “person” akin to a corporation or partnership.  The Court rejected these arguments, holding that the USDA is a government agency and not a corporation.  As the types of guarantees in Insuring Agreement E(1)(g) expressly included only corporate, partnership or personal guarantees, accepting Citizens Bank’s definition would be “unreasonable as it would render those expressly included terms superfluous.”  As a result, the AGAs did not fall within Insuring Agreement E(1). 
The Court then considered coverage under Insuring Agreement D, which indemnified for, inter alia, loss resulting directly from forgery of, on, or in any Letter of Credit.  “Letter of Credit” was defined as:
an engagement in writing by a bank or other person made at the request of a customer that the bank or other person will honor drafts or other demands for payment upon compliance with the conditions specified in the Letter of Credit.
Citizens Bank contended that the USDA acted as a “bank” by facilitating the transmission of funds to lenders and borrowers, and also argued that the USDA was an “other person”, on the basis that that term encompassed human beings, corporations and partnerships. 
The Court held that the AGAs were not letters of credit: 
The Court finds that a reasonable insured in Citizens Bank's position would not expect the [AGAs] to qualify as letters of credit under the terms of the Bond.  For one, the [AGAs] are labeled as guarantees and clearly fit within the definition of a guarantee as used in the Bond and for which coverage is provided under Insuring Agreement E.  That other instruments, for example certificates of deposit, may qualify for coverage under multiple insuring agreements does not mean that a document expressly labeled as a guarantee — a term defined in the Bond — should be treated as an instrument with an entirely different definition. 
Even if the Court were to ignore this unambiguous label, it would nevertheless find that a USDA [AGA] does not satisfy the definition of a letter of credit.  … the USDA is neither a “bank” nor an “other person.” 
[emphasis added]


Citizens Bank is notable for three reasons.  First, the holdings by the Court regarding Insuring Agreements D and E(1) will undoubtedly be of interest to fidelity professionals dealing with claims involving government-issued guarantees.  Second, the Court expressly reaffirmed the principle that Financial Institution Bonds are not to be interpreted contra proferentem, as they are effectively products of joint authorship. 
Third, the Court took a robust approach to interpreting the Bond, exemplified by its observation that:
This failure of the contracting parties to consider government guarantees explains why Citizens Bank has pressed a highly creative interpretative stratagem, urging a microscopic focus on the dictionary or statutory definitions of individual words. … Such an approach, however, runs contrary to the general rule that interpretation must take into account the whole of the contract.
Citizens Bank militates against an interpretive approach which seeks to generate coverage by “stitching together” definitions of individual words and phrases to try to fit the circumstances of a loss within coverage, and in favour of an approach whereby courts give effect to the wording of the Bond, read as a whole.  The latter approach is consistent with the interpretive methodology used by U.S. courts generally, and is expressly mandated by the Supreme Court of Canada as the “primary interpretative approach” to be taken in our country. 
Citizens Bank Holding Inc. v. Atlantic Specialty Insurance Co., 15-CV-782 (E.D. Wis. November 16, 2016) 

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By Mouna Hanna
Reisler Franklin LLP

Sadozai and State Farm, (P16-00002, February 22, 2017)

The Appeal decision of Director’s Delegate David Evans in Sadozai and State Farm (P16-00002, February 22, 2017) reinforces the principle that an insured must still prove that a Treatment Plan is reasonable and necessary, even if an insurer fails to respond within the timelines prescribed by section 38(11)2 of the SABS.

At issue on Appeal in Sadozai was payment for a Treatment Plan requesting an In Home Assessment. The Treatment Plan was submitted and State Farm failed to respond within 10 business days, per section 38(8) of the SABS. The Treatment Plan was allegedly incurred prior to State Farm responding with a denial.

Based on the evidence presented at the Arbitration, the Arbitrator found that the Applicant failed to prove that the Treatment Plan was necessary or that he required an In Home Assessment. The issue of the Treatment Plan being “deemed incurred” by operation of Section 38(11)2 was never argued or put to the Arbitrator (other than one phrase in the Applicant’s counsel’s opening submissions that State Farm did not deny payment for the Treatment Plan). More importantly, however, is that Director’s Delegate Evans went further to explain that even if this argument had been made, Treatment Plans are still subject to a reasonableness test. Director’s Delegate Evans relied on Arbitrator Wilson’s decision in Ying Al Chen and State Farm (A13-003892, May 30, 2016) in reminding us that the SABS is not a lottery for treatment providers where the prize is the deemed approval of a meritless treatment plan. “Reasonable and necessary” are the pre-conditions before an insured can claim indemnity from an insurer.

Unfortunately, prior recent FSCO/ADR Chambers decisions had completely ignored any discussion of whether a treatment plan was reasonable and necessary in favour of applying a strict, technical approach to section 38(11)2 (and the similar provision of the SABS 403/96).[1] Slowly, the pendulum starting swinging in the other direction, and Arbitrators started recognizing that insureds, treatment providers and treating facilities should not be allowed to benefit from technicalities, particularly when there is a lack of a clinical indication for why the treatment plans were being submitted.[2]    
Whether the LAT will follow cases like the Appeal in Sadozai, and the Arbitration decision in Chen remains to be seen, although the decision of R.H. and TD Insurance Meloche Monnex (16-000634/AABS, January 17, 2017) suggests that insurers may have to start from scratch in steering Adjudicators away from applying a strict approach to section 38(11)2. We note, however, that the case of R.H. and TD Insurance deals with a MIG determination and may have been considered differently given the benefits at stake. Insurers should take this opportunity to build the foundation, and remind LAT Adjudicators that section 15 of the SABS will always apply and will always be the starting point of any discussion regarding medical benefits, which “shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident”. The pre-conditions of “reasonable and necessary” are built right in and should be the first step to an evaluation of whether a treatment plan should be payable, even before we look at how the insurer responded.

[1] See for example Lin and State Farm (A12-007466, June 23, 2015) and Li and State Farm (A13-004272, January 29, 2016)

[2] See for example Jing and State Farm (A12-005871 & A12-005862, January 15, 2016) and Huang and State Farm (A13-003584, January 25, 2016)

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By Cody Moscovitz
Schultz Frost LLP

Carr v TD[1] is a recent FSCO Appeal decision of Director Delegate Richard Feldman which focuses on the definition of a motor vehicle accident.  This case also includes a detailed analysis of the “purpose test”, that is, whether a given accident resulted from an ordinary and well-known use to which the subject motor vehicle is put. 


On June 18, 2011, the Claimant Eleanor Carr, then five years old, attended a classmate’s birthday party.  A firetruck had been parked in the driveway of the home where the party was taking place for the entertainment and education of the children.  The children were invited into the passenger compartment of the truck.  In the process of exiting the vehicle, Ms. Carr fell down the stairs and hit her head on the asphalt below, sustaining a head injury.  A first party claim for accident benefits was made to TD General Insurance Company (“TD”).  TD denied the claim on the basis that Ms. Carr had not been involved in an “accident” within the meaning of the Statutory Accident Benefits Schedule (“SABS”).  The hearing Arbitrator agreed with TD and held that this did not constitute an “accident”, and the Claimant was precluded from claiming benefits. 
The decision was appealed. 


The SABS defines an “accident” as “an incident in which the use or operation of an automobile directly a causes an impairment…” 

In Amos v. Insurance Corp. of British Columbia[2], the Supreme Court of Canada established two elements that a claimant must satisfy for an incident involving a motor vehicle to be considered to be an “accident” within the meaning of first party automobile insurance:
  1. It must be proven that the incident resulted from the ordinary and well-known activities to which motor vehicles are put (the “purpose test”); and
  2. It must be proven that there is a direct causal relationship between the insured person’s impairments and the use or operation of the vehicle in question (the “chain of causation test” or, simply, the “causation test.”)
The Supreme Court Case of Citadel General Assurance Company v Vytlingam[3] amongst others[4] established that to satisfy the purpose test, the activity to which the person is putting the vehicle at the time of the incident must simply be a well-known, ordinary use for that particular vehicle. [my emphasis].  In one extreme example, in Economical Mutual Insurance Company v Whipple[5], in a party bus that provides guests with access to a “stripper pole”, cavorting and doing a headstand with the assistance of that pole was considered to be an ordinary use of that vehicle.    
Vytlingam further confirms that the real function of the purpose test is to exclude coverage for off-beat or aberrant uses of vehicles.
Additionally, there is case law which suggests that in order to satisfy the purpose test, the activity to which a vehicle is put need not be active.  In Economical Mutual Insurance Company v. Caughy[6] the Ontario Court of Appeal stated that “parking a vehicle is an ordinary and well-known activity to which vehicles are put.”  In the FSCO decision DiMarco and Chubb Insurance Company of Canada[7], it was considered an accident when a cyclist fell while swerving around a parked vehicle.
In Carr, TD conceded that Ms. Carr’s impairments were indeed caused by her fall from the firetruck, therefore, the causation test was satisfied. 
With respect to the purpose test, Director Delegate Feldman determined that it was an ordinary and well-known use of firetrucks to be used for educational and entertainment purposes and allow individuals into the passenger compartment.  As Ms. Carr’s use of the stairs to exit the firetruck did not constitute an aberrant use of the firetruck, it was not precluded from meeting the definition of an “accident” within the meaning of the schedule.  As such, Director Delegate Feldman overturned the decision of the hearing Arbitrator and ruled that Ms. Carr was involved in an accident, and was therefore entitled to accident benefits. 
The Carr decision reinforces the importance of considering the well-known and ordinary use for the particular vehicle in question at the time of the incident.

[1] FSCO Appeal P15-00062, November 17, 2016

[2] [1995] 3, S.C.R. 405

[3] [2007] 3 S.C.R. 373

[4] See for example, Stevenson v Reliance Petroleum Ltd [1956] S.C.R. 936

[5] [2012] O.J. No. 2051 (Div. Ct.)

[6] [2016] ONCA 226

[7] FSCO A10-003967, February 22, 2012

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By Teneil MacNeil
Miller Thomson LLP   

In the January 2017 Ontario Court of Appeal decision of Wilk v. Arbour, the Court was asked to determine when a person is considered to be in possession of a dog for the purposes of the Dog Owners’ Liability Act, R.S.O. 1990, c. D. 16 (“the Act”). The facts of this case were as follows: on December 28, 2013, Donna Marie Wilk took her boyfriend’s nine year old dog, Zeus, for a walk, during which time Zeus suffered a seizure and became unconscious, while on a leash. Upon regaining consciousness, Zeus, a Great Dane, “backed up, came out of his collar, slipped on ice and fell down an embankment into a ditch. Ms. Wilk tried to retrieve Zeus, but also slipped into the ditch. She [then] collided with Zeus and Zeus bit her thumb, causing her to lose her thumb above the joint”.  Ms. Wilk commenced a lawsuit as a result, and in doing so relied upon section 2 of the Act, the relevant provisions of which are as follows:
1.(1) In this Act,
“owner” when used in relation to a dog, includes a person who possesses or harbours the dog and, where the owner is a minor, the person responsible for the custody of the minor.

2. (1) The owner of a dog is liable for damages resulting from a bite or attack by the dog on another person or domestic animal.

(2) Where there is more than one owner of a dog, they are jointly and severally liable under this section.

(3) The liability of the owner does not depend upon knowledge of the propensity of the dog or fault or negligence on the part of the owner, but the court shall reduce the damages awarded in proportion to the degree, if any, to which the fault or negligence of the plaintiff caused or contributed to the damages.

(4) An owner who is liable to pay damages under this section is entitled to recover contribution and indemnity from any other person in proportion to the degree to which the other person’s fault or negligence caused or contributed to the damages.
Mr. Arbour, Ms. Wilk’s boyfriend, in defending this case, brought a motion for summary judgment. In doing so, he alleged as follows: Ms. Wilk was an “owner” of Zeus when bitten, and as the Act provides for liability to “another person” (a non-owner), Ms. Wilk was not entitled to damages as a result, meaning that there was no genuine issue for trial.

The motion judge dismissed Mr. Arbour’s motion, described above, his reasoning being as follows:
Having considered the ordinary meaning of the word “owner”, the statutory context for the use of the word, including the objects of the Act, it is my view that a just and reasonable result is that the word “possesses” when used in relation to a dog means the exercise of dominion and control similar and in substitution for that which ordinarily would be exerted by its owner (namely the person to whom the dog belongs) over the dog.
Ms. Wilk was entitled to damages as a result, and her action was to proceed accordingly. Mr. Arbour, in response, appealed this decision, with the resulting issues having been identified as follows: (1) the motion judge’s interpretation of the word “possess”; and (2) whether the motion judge made a palpable and overriding error in finding that Ms. Wilk was not in possession of Zeus at the time that she was bitten.

Issue 1: 
Did the motion judge err in his interpretation of “a person who possesses a dog” under the Act?
The Ontario Court of Appeal determined that the motion judge erred in his interpretation of “a person who possesses a dog” under the Act on the basis that the legislature “wished to make those who were in a position to exercise a measure of control over a dog responsible for its behaviour. This makes sense as the person exercising actual control over a dog is generally in the best position to avoid damage being caused by the dog to another person or animal”.

Issue 2:
Did the motion judge make a palpable and overriding error in finding that Ms. Wilk was not in possession of Zeus at that time that she was bitten?
The Ontario Court of Appeal determined that the motion judge made a palpable and overriding error in finding that Ms. Wilk was not in possession of Zeus and the time that she was bitten, its reasoning being that the critical time to determine possession is “the time just before the incident”. This considered, and as Ms. Wilk was the person exercising control over Zeus just prior to the time that she was bitten, “she was best placed to prevent the bite that occurred”.

As a result of the above, Mr. Arbour’s appeal was allowed, the motion judge’s order was set aside, and Ms. Wilk’s action was dismissed.

What lesson have we learned as a result of this case? To walk a dog is to possess a dog, and to be responsible for the dog’s behaviour. Strict liability will consequently attach to all those walking a dog that causes injury to others, at the time that the walk occurs, irrespective of whether or not the dog walker was negligent or in any way responsible for the injury.

Wilk v. Arbour, 2017 ONCA 21.  

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Featured Articles


By Jim Tomlinson, David Olevson, Shayan Kamalie & Victoria Mitrova
McCague Borlack LLP 

1. Introduction

With the commencement of the annual winter ski season, the legal exposure to ski hill and resort operators arising from injuries suffered by skiers and resort guests alike consequently increases. One of the most common forms of protection from this increase in risk is through the use of waivers. A waiver in this context refers to an agreement by a person to surrender a legal right, claim, or privilege, which they would otherwise have enjoyed. In particular, ski hill operators seek to have their guests and invitees forfeit their right to commence a lawsuit as against that operator for injuries sustained while participating in the ski or snowboarding activity. However, as the case law demonstrates, a waiver will not always be effective in barring a potential plaintiff’s claim. Accordingly, the aim of this paper is to examine the case law to identify various risk management strategies ski hill and resort operators can implement in order to shield themselves against potential liability. This paper will also explore the utility of summary judgment motions in defending personal injury lawsuits where an executed waiver has been obtained by the defendant(s). 

2. When is a Wavier Effective?

In the 2008 decision in Isildar v. Rideau Diving Supply (“Isildar”)[1], the Ontario Superior Court of Justice established a three-part test that the Court will use to determine whether or not a waiver is enforceable.[2]  At the first-stage of the test, the Court considers whether the individual waiving their legal rights knew, at the time of executing the waiver, what legal rights they were giving up.  In other words, did the person signing the waiver know that they were forfeiting a right or privilege (most commonly the right to sue) in exchange for participating in the activity in question or entering onto the premises? In some cases, plaintiffs will argue that a reasonable person would not agree with the terms of a waiver had they been fully aware of the risks associated with such activity. In these cases, the Court will look at whether the operator took reasonable steps to bring the terms of the waiver to the attention of the person signing the document.[3]
Generally speaking, an individual seeking to rely on the waiver does not have a duty to bring the waiver to the signing party’s attention and explain its terms. Rather, the participant will be deemed to have understood the terms of the waiver. However, the British Columbia Supreme Court in Karroll v. Silver Star Mountain Resorts Ltd.[4] found that the duty to take reasonable steps to bring the waiver to the attention of the signator is required in special circumstances.[5] The Court identified a number of non-exhaustive elements that suggest the existence of special circumstances. These elements include: (a) the length and format of the contract; (b) the time available for reading and understanding it; and (c) the competency of the signing party.[6] In cases where these factors are not present, the individual seeking to rely on the waiver may not have a duty to take reasonable steps to bring the waiver to the signing party’s attention and the signing party may be deemed to have understood the waiver’s terms.
The second stage of the Islidar test looks to the wording of the waiver to determine whether the release is worded broadly enough to cover the conduct of the defendant. In other words, does the agreement waive a plaintiff’s right to bring the specific claim being advanced. [7] Naturally, this is a fact-specific analysis. In order to satisfy the second part of the Islidar test, the language of the waiver must be worded in a manner that is specific to the way in which the injury was suffered. The wording of the waiver cannot be so broad so as to make the waiver unclear. This point was exemplified in Loychuk v. Cougar Mountain Adventures Ltd.[8] In that case, the plaintiffs were injured from a ziplining accident, caused by the negligence of the defendant activity operator, and were challenging the scope of the waiver they had executed. The particular waiver the plaintiffs signed stated, in bold letters, that the signing party agrees to waive any and all claims regarding any cause, including negligence or breach of duty of care owed under the Occupiers’ Liability Act.[9] However, the plaintiffs argued that they did not believe the waiver barred a claim arising from the negligence of the resort’s employees. Even though the trial Judge and the British Columbia Court of Appeal held that the scope of the waiver did cover claims arising from the employees’ negligence, this case demonstrates the importance of wording a waiver in a way that covers as many acts as possible but not so broad that it renders the waiver meaningless. This is a fine balancing act that counsel for ski resorts must achieve.
The Ontario Superior Court’s decision in Levita v. Alan Crew et al.[10] is also instructive in outlining the characteristics of a well-drafted waiver. In that case, the plaintiff was a player on a recreational hockey team. The plaintiff brought an action against the league for injuries sustained during a game. However, prior to allowing participants to join the recreational league, all players were required to sign a waiver of liability. In defending against the plaintiff’s allegations, the league relied on the waiver. The Court ultimately found that the waiver was a “complete defence to the claims against” the league.[11] Even though the waiver was passed among the players while they were in their dressing room and without any representative of the league to convey its terms, the Court found that the plaintiff had sufficient time to read the waiver and understand its terms. Alternatively, the Court held that it was open to the plaintiff to take the requisite steps to understand the contents of the waiver. This decision is particularly significant in that the Court states that the plaintiff “cannot retrospectively void the waiver’s effect by arguing he voluntarily signed something he did not understand or read”.[12] The Court in this case also found that the waiver in question was unambiguous and sufficiently enumerated the specific risks and dangers the waiver was intended to capture. The exact wording of the waiver was as follows:[13]

In consideration of my participation... I hereby acknowledge that I am aware of the risks and hazards associated with or related to ice hockey. The risks and hazards of ice hockey include, but are not limited to, injuries from:
  • Collisions with the rink boards, hockey nets, and ice;
  • Being struck by hockey sticks and pucks;
  • Physical contact with other participants, resulting in injuries to the eyes, face, teeth, head, and other parts of the body, bruises, sprains, cuts, scrapes, breaks, dislocations and spinal cord injuries which may render me permanently paralyzed.
The Court found that the manner in which the plaintiff was injured in this case was captured by the third point of the waiver.
The Ontario Court of Appeal’s decision in Kempf v. Nguyen[14] provides another example of a waiver that was found to be enforceable. The Court of Appeal also provided guidance as to what terms a well-drafted waiver should include.  Specifically, the case demonstrates that the language in the waiver must specifically include the parties who will benefit from the liability exclusion. Further, the Court noted that the waiver cannot be complicated or unduly lengthy.[15] In Kempf, the Court noted that during the trial, the plaintiff failed to point out any ambiguity in the waiver.
At the final stage of the Islidar test, the Court has the opportunity to find that a waiver should not be enforced because it is unconscionable.[16] The test for unconscionability was eloquently stated by Justice McLachlin, as she was then, in Principal Investments Ltd. v. Thiele Estate.[17] In particular, Justice McLachlin stated that two requirements must be satisfied before a contract can be found to be unconscionable. First, there has to be a proof of inequality in the bargaining position of the parties. Second, there has to be proof of “substantial unfairness obtained by the stronger person”.[18] 


3. Are there Alternatives to a Waiver?

From a practical standpoint, at times it is unreasonable to expect an establishment to go through a waiver with each participant, bring the waiver to their attention, and to have them sign it. In these circumstances, an organization may seek to print releases or waivers on tickets and/or place signs throughout the subject establishment, as is common practice at many ski resorts. Even though this practice is less desirable than having each participant sign a waiver, the Courts have nevertheless found such printed waivers are sufficient where the establishment proves that it took all reasonable steps to bring the terms of the waiver to the individual’s attention. The question of whether reasonable steps were taken is an objective one. In this respect, a Court will consider the manner in which the terms are presented on tickets and how the waiver signs are displayed throughout the premises.  Ski resorts will not be successful in relying on the waiver unless the Court is satisfied that the patron should have seen the waiver wording.[19]
The Courts decision in Cejvan v. Blue Mountain Resorts Ltd.[20] is an example of an instance where a waiver printed on the back of a ski ticket was found to be valid. This was due, in part, to the way the ticket was designed. In particular, participants had to tear the ticket and attach it to a ticket holding apparatus. In doing so, the participants were forced to look at the back of the ticket where the waiver was printed. The Court found that this, along with the “clear, consistent, and visible” signs placed throughout the premises amounted to sufficient notice of the waiver to the patrons.[21] In addition, in determining whether there was sufficient notice the Court will look at the physical location of the signs displaying the waiver. In particular, Courts will analyze whether an individual had a reasonable opportunity to observe the signs.[22]
In cases where the signs displaying the waivers are too vague or where the waiver printed on the ticket does not use a sufficiently large sized font, the resort owner will not be successful in relying on the waiver. This is especially true in cases where it is the individual’s first time at an establishment or where the individual is not familiar with the premises (i.e. season pass holder versus first time visitor).[23]


4. Timing is Everything! – When to Bring A Summary Judgment Motion?

In Ontario, summary judgment motions offer an important alternative to expensive and protracted litigation. These motions, which are governed by Rule 20 of the Rules of Civil Procedure, allow parties to move to dismiss all or part of a claim without having to resort to a full trial.[24] Summary judgment motions will only be granted in circumstances when there is no genuine issue for trial. Therefore, these motions act as a barrier that prevent unmeritorious actions from proceeding further.
When a party relies on a waiver as a full defence to a claim, a summary judgment motion may be an appropriate way to attempt to dismiss the claim. The Ontario Superior Court of Justice in Brown v. Blue Mountain Resort Ltd[25] considered the use of summary judgment motions in cases involving waivers. The defendant ski resort sought to strike the plaintiff’s claim by way of summary judgment motion, arguing that the plaintiff had agreed to sign a waiver before entering the resort’s skiing area.[26] After examining the evidence, the Court refused to grant summary judgment to the defendant. The Court made a number of important findings, including: first, that the ticket contained explicit wording indicative of a waiver; second, that a large, prominent red sign at the resort’s ticket offices advised skiers to read the waiver contained in the ski ticket; and, third, that the sign at the ticket offices itself had waiver wording which included waivers against negligence. However, the Court found that a proper determination of whether the waiver excluded liability could only be properly made at trial.[27]
The Court’s decision in Brown was made before the 2010 amendments to Rule 20 which granted judges new and expanded powers when hearing summary judgment motions. Judges are now able to weigh evidence, evaluate the credibility of a deponent, and draw reasonable inferences from the evidence. The Supreme Court of Canada in Hryniak v. Mauldin[28] commented favourably on these amendments as they would promote simplified pre-trial proceedings and foster procedures that were better tailored to each specific case.[29] This cultural shift has been recognized by other Courts, including the Ontario Court of Appeal in its recent decision in Christoffersen Ltd v. Neilas Inc.[30]Justice Brown emphasized that summary judgment motions were increasing post-Hyrniak.[31]
In Trimmeliti v. Blue Mountain Resorts Limited, the defendant ski resort successfully obtained summary judgment dismissing the plaintiff’s action.[32] The plaintiff sustained a clavicle fracture after colliding with a mesh ribbon while night skiing at the defendant resort. The Court held that there was nothing unreasonable or unlawful about the defendant excluding liability for the plaintiff’s accident. Moreover, the Court held that there was no basis for a finding of unconscionability. As a result, there was no genuine issue requiring a trial. In the Court’s decision, Justice Dunphy stated the following: [33]
If the plaintiff chose to sign the form and ignore the consequences, that was a decision freely made by the plaintiff. The plaintiff was not free unilaterally to contract out of the waiver that he knew or ought to have known was a condition of his access to the resort.
However, in Borre v. St Clair College,[34] the Court dismissed the defendant’s motion for summary judgment and found that a full trial was necessary to determine a waiver’s validity. The plaintiff was registered in a Motorcycle Training Course offered by the defendant. After enrolling in the course, the plaintiff signed a waiver. Additionally, she confirmed that she understood the risks involved in participating and that she was responsible for her personal safety. Further, the plaintiff acknowledged that she would not hold the defendant liable for any losses or injuries incurred.[35]
After examining the evidence, Justice McDermid indicated that several outstanding questions remained concerning the nature of the waiver which could only be answered in a full trial. Among the concerns discussed by Justice McDermid were the reasonable expectations of the parties when signing the waiver, the state of the motorcycle, and the adequacy of the supervision over the plaintiff’s activities.
The lack of a full evidentiary record also contributed to the Court’s decision to dismiss the summary judgment motion. The Court indicated that a decision could not be made without a full appreciation of the facts. This highlights the importance of asking detailed questions during the Examination for Discovery of the plaintiff in order to develop as complete an evidentiary record as possible. 
As these contrasting cases show, defence counsel should consider a number of factors when deciding whether to bring a summary judgment motion. Summary judgment motions are often costly, and can inadvertently reveal weaknesses in the defendant’s case. As a result, defence counsel should be cautious in bringing summary judgment motions and should fully explore the potential risks with their client.
However, in cases where a well-drafted waiver can act as a full defence, motions for summary judgment may be an effective and cost efficient means for dismissing claims. Ski resorts would likely want to employ waivers that are very detailed and all-encompassing in order to strengthen any potential arguments in a motion for summary judgment.

5. Conclusions and Takeaways

Where the enforceability of a waiver is in question, the Court is often left balancing the freedom to contract with a concern for providing sufficient protection to the injured party. The cases discussed demonstrate that a Court will enforce a waiver in cases where it is drafted in manner that is: (1) unambiguous (2) sufficiently broad and (3) includes the parties who will be excluded. In addition, the Court will enforce the waiver if the resort can demonstrate that it has taken reasonable steps to bring the waiver to the patron’s attention so that the he or she is aware of the terms. With regards to the enforceability of a waiver, the three-part test arising out of Isildar continues to be used by the Courts in Canada in determining the enforceability of a waiver. Therefore, a waiver should be drafted in a manner that is consistent with the principles arising from that case.
Further, there are circumstances that make securing a signed waiver from each party impractical. In such circumstances signs, postages or printed terms on back of a lift ticket may suffice. However, the most effective strategy to limit a resort owner/operators exposure is to utilize these mechanisms in conjunction with a signed waiver.
Counsel defending ski resorts who are dealing with a challenge to a waiver should give consideration to whether they have an appropriate case for a motion for summary judgment, as it may provide a cost effective avenue to dispose of the claim. Careful consideration should be paid to the evidentiary record that would be before the judge hearing the summary judgment motion. Further, the risks associated with such motions should be discussed with the client.
In summary, the recent case law on waivers in the context of ski hill resorts illustrate two positive developments for resorts relying on waivers. First, Courts have shown an increased willingness to uphold a waiver. Second, in the post-Hryniak era, Courts are more likely to grant summary judgment in cases where the operator has a well-drafted waiver in place, thereby resolving the claim at an earlier stage of the litigation.

[1] 2008 CanLII 29598 (ONSC).

[2] Affirmed in Loychuk v Cougar Mountain Adventures Ltd, 2011 BCSC 193.

[3] Supra note 1.

[4] [1988] BCJ. No. 2266 

[5] Ibid.

[6] Ibid, at para16-20.

[7] Supra note 1. 

[8] 2012 BCCA 122

[9] Occupiers' Liability Act, R.S.B.O. 1996, c. 337.

[10] 2015 ONSC 5316.

[11] Ibid at para 102.

[12] Ibid at 105.

[13] Ibid at para 104.

[14] 2015 ONCA 114

[15] Ibid at para 57.

[16] Supra note 1 at pp. 634.

[17] Principal Investments Ltd v. Thiele Estate, 1987 CanLII 2740 (BCCA), at para 19.

[18] Ibid.

[19] Champion v. Ski Marmot Basin, 2005 CarswellAlta 977, at paras 17-18.

[20] (2002) CanLII 7591 (ONSC).

[21] Ibid.

[22] McQuary v. Big White Ski Resort Ltd, [1993] BCJ No 1956 (SC).

[23] Greeven v. Blackomb Skiing Enterprises, 1994 CanLII 2252 (BCSC).

[24] Rules of Civil Procedure, R.R.O 1990. r 20.

[25] 2002 CanLII 7591

[26] Supra at note 17.

[27] Ibid at 17.       

[28] 2014 SCC 7, 2014

[29]Ibid at paras 2 and 28.

[30] 2016 ONCA 321

[31] Ibid.

[32] Trimmeliti v Blue Mountain Resorts Limited, 2015 ONSC 2301.

[33] Ibid at para 82.

[34] Borre v. St. Clair College of Applied Arts & Technology, 2011 ONSC 1971, 2011 CarswellOnt 2103.

[35] Ibid at para 5.

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By Katelyn Rattray
Race & Company LLP

With apologies to the Rolling Stones, if the “successful” plaintiff tries sometimes, they just might find they get what they need following judgment or the settlement of a proceeding... That being, recovery of taxable costs and necessary or proper disbursements.
However, litigants don’t always get what they want or need. Litigation is, by its very nature, risky. Even the most confident of plaintiffs (not to mention their lawyers) may find themselves at the wrong end of an unfavourable liability judgment or fail to beat a formal offer at trial, after which costs are awarded against them. Worse yet, that costs award could exceed the amount of damages awarded at trial.
Enter adverse costs insurance - known by many names, including, but not limited to, after-the-event insurance and legal expense insurance. Though legal (and widely used) in the United Kingdom, as well as certain European countries and the United States, adverse costs insurance is a relatively new player in Canadian litigation. Its name is self-descriptive: these policies serve to protect plaintiffs in personal injury cases by indemnifying them in the event that costs are awarded against them at the conclusion of their case.
What should defence lawyers make of this new phenomenon? What risks do they face when engaging with a plaintiff who has it? The Ontario Supreme Court held that adverse costs insurance premiums are not a recoverable disbursement and must be disclosed to defence counsel in the course of a proceeding. More recently, the British Columbia Supreme Court elected to follow Ontario’s jurisprudence by denying recovery to a plaintiff seeking to claim litigation insurance as a disbursement. Nevertheless, the very existence of adverse costs as a growing phenomenon in Canada should be identified and considered by counsel in the course of settlement and trial.
The jurisprudence dealing with recovery of adverse costs insurance premiums as a valid disbursement begins with Markovic v Richards et al, a 2015 case from the Ontario Supreme Court. In this case, Justice Milanetti determined that a premium paid by a plaintiff for adverse costs insurance was not a compensable disbursement. He noted: “[w]hile it is clearly the plaintiff’s prerogative to obtain [adverse costs] insurance, I do not accept that such premium should be reimbursed by the defendants as a compensable disbursement … I can think of no policy reason that such should be compensated as a taxable disbursement. Existence of this policy may well provide comfort to the plaintiff, it is however an expense that is entirely discretionary, does nothing to advance the litigation, and may in fact even act as a disincentive to thoughtful, well-reasoned resolution of claims.”
Markovic was followed by Foster v Duncan, 2016 ONSC 684 and Valentine v Rodriguez-Elizalde, 2016 ONSC 6395, both of which also denied the recovery of adverse costs insurance premiums as disbursements.
More recently, in Wynia v Soviskov, a 2017 case from the British Columbia Supreme Court, counsel for the plaintiff recently attempted to claim the cost of litigation insurance as a recoverable disbursement in the course of a cost assessment hearing. Counsel for the defendant objected to this disbursement, relying on and citing Markovic.
Registrar Nielsen held that the cost was not a recoverable disbursement. He noted that to be recoverable as a disbursement, Rule 14-1(5) of British Columbia’s Supreme Court Civil Rules states that said disbursement must have been “necessarily or properly incurred in the conduct of the proceeding”. He consulted MacKenzie v Rogalasky, a 2014 case from the British Columbia Court of Appeal for commentary on the meaning of the phrase “necessarily or properly incurred in the conduct of the proceeding”, which states:
the purpose of permitting the recovery of disbursements in the context of a costs regime is to permit the recovery of those expenses that arise inherently and directly from the issues in the case which relate to the direction, management, or control of litigation and which pay for materials and services used to prove a claim or defence. These expenses arise directly from the nature and conduct of the allegations or the conduct of the allegations in a proceeding.”
Registrar Nielsen found that “the cost of insurance coverage is not a proper or necessary disbursement incurred in the conduct of the proceeding. No doubt it provides a measure of financial comfort to the plaintiff, however, it does not arise from the exigencies of the proceeding and relate directly to the direction, management, or control of the litigation used to prove a claim against the defendants.”  
The aforementioned line of authority suggests that - at least for now - adverse costs insurance is not viewed as a reasonable disbursement by Canadian courts. But on a broader scale, the advent of adverse costs insurance as a growing option for litigants poses potential risks for counsel defending claims. In particular, counsel will want to ensure that plaintiffs disclose whether they are in possession of an adverse costs insurance policy and, if so, bear that fact in mind when engaging in settlement negotiations.
One immediate concern is that without the perceived risk of facing an adverse costs award for failing to beat a formal offer, plaintiffs will be less inclined to engage in pre-trial settlement negotiations, even where a reasonable offer has been put forward by the defence (which, of course, runs contrary to the sentiment that proceedings should be resolved in a just, speedy and inexpensive determination on the merits of the case). Perhaps more concerning is the notion that a plaintiff may not disclose whether they are in possession of an adverse costs insurance policy.
At last year’s AGM, Canadian Defence Lawyers heard from a panel entitled “Adverse costs Insurance Panel: The Risks for the Defence Before Trials” that addressed the concerns noted above, and more.
Notably, the two policies featured (provided through BridgePoint Indemnity Company Canada and DAS Legal Protection Insurance Company) do appear to include some safeguards against the overconfident plaintiff. For instance, BridgePoint Indemnity Company Canada’s adverse costs policy is breached, among other circumstances, where the plaintiff does not accept a recommendation to accept or reject an offer to settle, or where the plaintiff fails or delays to provide instructions to or fails to cooperate with counsel.
Furthermore, as noted by the panel, in Abu Hmaid v Napar, a 2016 case from the Ontario Supreme Court, had recently confirmed that a plaintiff must disclose whether they possess adverse costs insurance under Rule 30.02(3) of Ontario’s Rules of Civil Procedure (which states that “a party shall disclose and, if requested, produce for inspection any insurance policy under which an insurer may be liable, (a) to satisfy all or part of a judgment in the action; or (b) to indemnify or reimburse a party for money paid in satisfaction of all or part of the judgment …”).
Though British Columbia’s courts have not yet determined whether a plaintiff must disclose whether they possess adverse costs insurance, the Supreme Court Civil Rules contain nearly-identical language in Rule 7-1(3): “[a] party must include in the party’s list of documents any insurance policy under which an insurer may be liable (a) to satisfy the whole or any part of a judgment granted in the action, or (b) to indemnify or reimburse any party for any money paid by that party in satisfaction of the whole or any part of such a judgment.” One may reasonably assume that, if asked whether a plaintiff is required to disclose an adverse costs policy in British Columbia, the court would order disclosure under Rule 7-1(3).
Recognition of adverse costs insurance as an unnecessary disbursement incurred in the conduct of a proceeding by the Ontario Supreme Court, and now the British Columbia Supreme Court, suggests that, currently, such policies remain nothing more than an option for the risk-averse litigant. Conversely, the appearance of more and more case law addressing whether the premiums on such policies can be claimed as a disbursement suggests that adverse costs insurance is rising as a new player in the conduct of personal injury litigation - one that defence counsel will want to identify early on and pay mind to in the course of file management. 

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By Sean C. Petrou, Student–at-Law
Thomas Gold Pettingill LLP 
A gateway issue in coverage and priority dispute cases is if the policy in question was in effect at the time of loss. If a live issue, it typically involves dispute over whether termination of the policy was valid. There is an abundance of case law discussing valid notice for termination of coverage from the insurer side, but what about the insured? What happens when an insured attempts to cancel their policy? Can a broker accept cancellation? When is that cancellation effective?



An insured advises their agent/broker, over the phone, on Monday that they wish to cancel their automobile policy. The insured then gets into an accident on Tuesday. Is cancellation effective?



Yes. Cancellation is effective upon an agent/broker being advised of the insured’s request. Cancellation may be made verbally. The cancellation does not sit pending until premiums have been refunded or notice of acceptance of cancellation has been given.



Statutory Conditions 11(2) and (4) set out the rights and obligations of an insured when cancelling their policy of automobile insurance:[1]
11      Termination
(2) This contract may be terminated by the insured at any time on request.
(4) Where this contract is terminated by the insured, the insurer shall refund as soon as practicable the excess of premium actually paid by the insured over the short rate premium for the expired time, but in no event shall the short rate premium for the expired time be deemed to be less than any minimum retained premium specified.
Section 1.7.1 of the Ontario Automobile Policy states, in part:[2]
1.7     Cancelling Your Insurance — 1.7.1 When You Cancel
You may cancel your insurance at any time by advising us.
In 2003 the Court of Appeal provided clarity into the issues of broker authority and insured cancellation.[3] In this case, the insured instructed his broker to cancel coverage on one of his vehicles. The broker immediately faxed the insurer a Notice of Deletion. The insurer date stamped this Notice of Deletion a week later and the premiums were refunded approximately a month thereafter. Sometime in this period the insured was involved in an accident while driving the deleted vehicle.

On appeal, the Court held that the broker had implied, or at least ostensible authority, to accept requests to delete coverage. Furthermore, the Court held that cancellation was effective upon notice given to the broker. Any outstanding tasks such as notifying the underlying insurer or refunding the premiums were held to be merely administrative and did not affect the cancellation: [4]
After the cancellation had been effectively accepted by Jacobs on Zurich's behalf, the remaining process was merely administrative. The fact that the premium had not yet been returned did not affect the validity of the cancellation.
A trial level decision from the Provincial Court of Alberta—a jurisdiction with a similar statutory framework to Ontario—also followed suit with similar reasoning.[5] There, the insured orally instructed his agent to cancel his policy. The agent responded requesting written confirmation, which was delivered at a later date. A dispute arose as to when the cancellation was effective.

The Court held that the agent had authority to accept the termination. Notice to the agent was notice to its principal, the insurer. Cancellation of a policy by the insured did not require any writing or notice and was effective upon request:[6]
By contrast while an insured may terminate or cancel the contract, there is nothing requiring any form of writing or requiring any notice. It may be done "at any time by request". There is nothing in the Insurance Act expressly requiring an insured to do so in writing or to sign off the policy.
In taking this position, the Court held that if notice was required, then the Act would have expressly called for it as it has in the case of insurers:[7]
Had those who drafted the Insurance Act intended that a termination by an insured be valid only if in writing or for that matter only if signed by the insured, one would have expected that the Insurance Act would have so stipulated, as it stipulates in the case of termination by the insurer.

[1] Statutory Conditions – Automobile Insurance, O Reg 777/93 at s 11(2), (4).

[2] Ontario Automobile Policy at s 1.7.1.

[3] Zurich Canada v Fortin, [2003] O.J. No. 28 (Ont CA).

[4] Ibid at para 12.

[5] Ashe v Peace Hills General Insurance Co., 2007 ABPC 244.

[6] Ibid at para 99.

[7] Ibid at para 102.

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By David Robinson
Northshore Law LLP 
In Manning v. Algarde Estate 2008 BCSC 1129 the plaintiff sued the West Vancouver Police for the return of valuable gold coins she had been fortunate enough to find at a garage sale.  In 1994 the true owner of the coins had reported them stolen and had since died.  He had provided two statements in connection with the theft.  The issue was whether or not these statements were admissible into evidence.

The court looked at the principled approach to the admissibility and in particular the decision of the Supreme Court of Canada in R. v. Khelawon 2006 SCC.  The two issues were necessity and reliability. 

Necessity was established as is usually the case where the maker of the statement is dead by the time of trial.  As noted by Henderson, J. in Bolton v. Vancouver (City) 2002 BCSC 1061 “the death of the declarant in and of itself satisfied the necessity principle”. 

The real issue was reliability and the court examined the circumstances around the making of the statements and also considered trial fairness.  Finch C.J.B.C. in R. v. Post 2007 BCCA 2166 BCLR (4th) 148 noted that the overreaching principle is trial fairness and that threshold reliability can be established in two ways:
  1. The circumstances in which the statement was made may provide sufficient comfort as to its truth and accuracy;
  2. The statement’s truth or accuracy may be sufficiently tested because of the presence of adequate substitutes to an oath and cross-examination at trial. 
In considering reliability, the court considered other relevant factors some of which were listed in the Bolton case:
The court is to consider such things as whether the declarant had any motive to lie, or bias;  whether the statement was adduced through leading questions; whether the statement was preceded by the taking of an oath or, alternatively, by a warning of the importance of telling the truth;  whether the declarant evidenced some awareness of the solemnity of the occasion and the importance of accuracy;  whether the declarant evidenced any mental impairment due to alcohol, drugs, shock or fatigue;  and whether the declarant had an opportunity to reflect and therefore to tailor her evidence. 

In my view, it is also relevant to consider under this head whether or not the statement was taken by an independent investigator.  In the civil case, one should consider whether the statement was taken by a party, or an agent of a party, or an agent of a potential party, in the litigation.
The Court indicated that the test for admissibility of hearsay evidence is applied in civil cases in the same way as applied in criminal cases (per Goldie, J.A. in Mohammed v. Canadian Northern Shield Insurance Co. (1994), 96 BCLR (2d) 373 (C.A.) and looked at trail fairness which was considered in Pierre v. Mount Curry Indian Band (1999) 61 BCLR (3d) 381 (S.C.) where the judge weighed the potential prejudice to both parties.

On the facts of this case if the statements of the deceased were not admitted into evidence, the prejudice flowing to the estate from that refusal was substantially more severe than the prejudice to the plaintiff from admitting it.  The court went on to address the factors set out in Post and Bolton for each of the statements concerned and found that the estate had met the burden of establishing both necessity and reliability for the 1994 statement but that the other statement was not admissible as the estate had failed to establish the threshold reliability of that statement.  The court concluded that the estate had succeeded with its claim to four of the five coins. 

In the case of Bishop v. Hiebert 21 BCLR (3d) 193, the court in a motor vehicle accident case had to determine whether the evidence of an independent witness who had given a statement at the accident to the police and was later dying could be admissible at trial.  The court noted that the decisions of the Supreme Court in R. v. Khan (1990) 2 SCR 530 and R. v. Smith (1992) 75 CCC (3d) 257 signaled a more relaxed attitude by trial courts to the acceptance of hearsay evidence.  In this case reliability was the issue not necessity.  On the facts of this case the court found that the circumstance substantially negated the possibility that the evidence of the deceased witnessed was unreliability inter alia on the basis he was not acquainted with any party to the accident, was not involved in the accident, his statement was made, in writing, at the scene and within an hour of the accident, the events were fresh in his mind and nothing would be lost in the reporting of his statement, that the statement was made to a police officer in the course of a formal investigation of the accident, that it was obvious from the nature of the accident the witness might likely be required to testify in either criminal or civil proceedings arising out of accident and that it was preferable for such a written statement to be introduced through the police officer who took the statement.

In Bolton v. Vancouver (City) 2002 BCSC 1061 involving a motor vehicle accident, the reliability of five statements made by an individual who subsequently died was in issue.  The first conversation, the 911 call was admissible in evidence, the statement given to the police officer at the hospital a few hours post-accident were admissible but the follow-up phone call one month later was inadmissible as it was not taped and no written record of the call was authenticated.  A statement provided to the adjuster was inadmissible.  It was taken two and a half weeks post-accident, the adjuster was working for a potential party to the litigation at the time, ICBC, and the witness providing the statement was not under oath, did not have the statement taped (but it was written and signed).  The court was not satisfied that it attained the threshold level of reliability required for the principled acceptance to the hearsay rule. 

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By Theodore J. Madison
Miller Thomson LLP 
You have all been faced with the situation as to who is responsible for maintenance of sidewalks adjacent to an insured’s property and the portion of the driveway that is beyond the sidewalk adjacent to the municipality’s roadway. The caselaw appears to establish that the homeowner cannot be found liable for damages however, there are exceptions.

The Ontario Court of Appeal in Bongiardina v. York (Regional Municipality), 2000 CarswellOnt 2622, held that under most circumstances, an adjacent property owner is not civilly liable for injuries occurring on sidewalks caused by snow or ice, notwithstanding the existence of a by-law imposing a duty upon adjacent property owners to clear snow and ice. Specifically, the court stated:

The question then becomes: is there a common law duty on the owner of the property to clear snow and ice from public sidewalks adjacent to the property? In my view, the answer to this question must be ‘No’. Although the ‘neighbour’ principle from McAlister (Donoghue) v. Stevenson, [1932] A.C. 562 (U.K. H.L.), has been expanded in recent years to cover a myriad of new relationships, it would stretch it too far if it was applied in the circumstances of this case. A homeowner has a duty to ensure that his or her own property is maintained in a reasonable condition so that persons entering the property are not injured. If the homeowner complies with this duty, he or she should be free from liability for injuries arising from failure to maintain municipally owned streets and sidewalks. The snow and ice accumulating on public sidewalks and the potholes on the street in front of the house are the legal responsibility of the municipality, not the adjacent property owner.[1]

However, the Court qualified this opinion by further holding that there are two exceptions to the above general rule. As such, an owner of property adjacent to municipally owned property on which an injury occurs may be held liable for the injury where:
  1. The property owner is a deemed occupier of the adjacent public property; and
  2. The property owner fails to ensure that conditions or activities occurring on his/her property does not ‘flow off’ onto the public property thereby causing injury to others.[2]
The Court referenced scenarios applicable to both exceptions. An owner of property adjacent to public property may be a deemed occupier of such public property where the owner assumes control of the public property. In the case of Moody v. Toronto (City), 1996 CarswellOnt 4047, the court dismissed a motion for summary judgment brought by the defendant owner of the Toronto Skydome because of ‘special circumstances’[3] relating to the sidewalk on which the alleged injury occurred. Among the referenced special circumstances was the almost exclusive use of the property at issue by the defendant’s patrons.[4]

With respect to exception 2 above, the court referenced Brazzoni v. Timmins (City), [1992] O.J. No. 254, where the Ontario Court of Appeal found both TD Bank and the City of Timmins liable for the injuries of an individual who was injured as a result of snow and ice accumulation on a public sidewalk. The Court found that water flowing from TD Bank’s property onto the public property created a ‘dangerous condition’.[5]

In the recent case of Gribowski v. Singh, 2013 CarswellOnt 1978, the Ontario Superior Court of Justice reaffirmed the law established in Bongiardina. However, in Gribowski, the defendant’s motion for summary judgment was dismissed as there was a genuine issue for trial with respect to whether the defendants were a deemed occupier.

The most recent case is Bondy v. The City of London et. al (2014) ONCA 291 (CanLII). This was an appeal from a decision of Justice Gorman of the Superior Court of Justice wherein she found that the Plaintiff, who slipped and fell on the sloped boulevard between the street and the sidewalk, could not collect from the City of London or the adjacent homeowner.

The action against the City of London was based upon S. 44 (1) of the Municipal Act S. O. 2001 which provides “the municipality that has jurisdiction over a highway or bridge shall keep it in a state of repair that is reasonable in the circumstances, including the character and location of the highway or bridge.” The court found that the boulevard was a highway. Thus, the highest standard to which the area needs to be maintained by anyone is as a highway for vehicles, not as a passageway for pedestrian traffic, subject to special circumstances. The fact that pedestrians cross a road at other than designated areas at intersections does not elevate the standard of maintenance. The appeal against the City of London was dismissed.

With respect to the adjacent property owner, the Court of Appeal rejected the arguments of liability based upon the Occupiers’ Liability Act, RSO 1990 c. O.2, S. 1 3(1) and the street By-Law of the City of London.

The court commented at paragraph 6;
First, we agree with the trial Judge where she stated in para. 76 of her reasons that the By-Law does not impose a duty on the respondent, Ms. Lyszczek, to remove snow and ice. Nor is there anything in the By-Law which makes the respondent an occupier within the meaning of the Occupiers’ Liability Act. Second, there are no special circumstances on the facts of this case that place the respondent in “control” of the boulevard, within the meaning of the Occupiers’’ Liability Act. We agree with Justice Gorman at para. 83 of her reasons, where she stated:

“On the facts before me I am unable to conclude that Ms. Lyszczek exercised any control over the boulevard. She certainly did not restrict others from accessing it. Indeed she did not salt it, on her evidence, because she did not think it was her responsibility to do so.  Accordingly, while it is possible for an adjacent property owner to be held liable under the Occupiers’ Liability Act, I find that Ms. Lyszczek is not liable.”
Beware of exceptions and special circumstances!

[1] Bongiardina v. York (Regional Municipality), 2000 CarswellOnt 2622, at para 19

[2] Ibid at para 20

[3] Ibid

[4] Ibid

[5] Ibid at para 21

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By Erin Durant
Borden Ladner Gervais LLP 
A recent Ottawa decision indicates that the Superior Court may be willing to make rulings before trial regarding the admissibility of expert reports in appropriate cases.

In  Awada v. Glaeser a defendant served an engineering expert report more than two years after the pretrial conference and only ten weeks before the commencement of the trial of the action. A previous trial date had already been adjourned due to the illness of a party. A co-defendant brought a motion seeking an order to strike the engineering report and to prevent the expert from testifying at trial.

The motions judge reviewed the applicable law, including the leading decision from the Ontario Court of Appeal in Harrop (Litigation guardian of) v. Harrop. In Harrop, the Court of Appeal held that a motion judge could rule in advance of a trial on the admissibility of proposed expert evidence only in the “rarest of cases.” The motions judge in Awada applied the reasoning in Harrop and found that the case before him was one of the “rarest of cases.” However, the motions judge also outlined a number of additional considerations in support of making his order. These additional considerations are noteworthy as they suggest that the court may be willing to make evidentiary rulings regarding the admissibility of expert evidence before trial in an increasing number of scenarios. According to the motions judge:
  1. Harrop was decided just prior to significant changes to the Ontario Rules of Civil Procedure (the “Rules”), including changes to Rule 53 that required the  earlier delivery of expert reports and increased safeguards to ensure the reliability of such reports. In this case, the defendant had, twice, failed to retain an expert and serve a report within the timelines prescribed by the Rules
  2. A number of other amendments to the Rules occurred in January of 2010. In particular, Rule 50.07(c) now provides that the court can make a wide range of orders that are found in Rule 20.05(1) and (2). Examples of orders available to be requested are orders: (a) specifying which material facts are not in dispute and defining the issues to be tried; (b) that any motions be brought within a specified time; (c) that a party deliver a written summary of the anticipated evidence of a witness within a specified time; (d) that any oral examination of a witness at trial be subject to a time limit; (e) that the evidence of a witness be given in whole or in part by affidavit; and (f) that any experts engaged by or on behalf of the parties in relation to the action meet on a without prejudice basis in order to identify the issues on which the experts agree and the issues on which they do not agree, to attempt to clarify and resolve any issues that are the subject of disagreement and to prepare a joint statement setting out the areas of agreement and any areas of disagreement and the reasons for it. According to the motions judge, these new rules expand the trial management powers available to judges at pretrial conferences – all with a view of increasing trial efficiency.
  3. Automatically deferring admissibility issues to the trial judge can result in a lack of fairness to the parties as well as prejudice to the administration of justice. Prior to making this statement, the motion judge reasoned that “the policy considerations enunciated in Harrop have to be reassessed having regard to the rule amendments that have expanded the court’s jurisdiction to rule on issues before a trial. While relevant evidence should not be excluded solely on technical grounds, motion judges should not avoid an analysis of the probative value of the proffered evidence and an assessment of the prejudice that will result from the late delivery of an expert’s report.”
  4. The limited judicial resources available and the difficulty in predicting the length of civil trials is a further reason to deal with admissibility of expert reports before trial.  The motion judge stated that “Our trial system can no longer function effectively if counsel routinely defer trial preparation until the last moment and then expect the trial judge to relieve the party whom they represent of their counsel’s failure to comply with the rules in a timely way. When motions are postponed to the outset of trial, valuable trial time is lost.  The loss of trial time undermines the public perception of our system of justice, particularly when a jury has been convened.  Last minute motions can also result in the adjournment of trials.”
Accordingly, the motion judge proceeded to make a ruling on the admissibility of the proposed expert report. In addition to the concerns regarding the timeliness of the delivery of the report, the motion judge also determined that the report made legal conclusions beyond the scope of the author’s expertise, relied on legislation that was irrelevant to the pleadings and, accordingly, it had no probative value. The motion’s judge also found that the report was unnecessary to allow the jury to assess the required standard of care on the facts of the case. The motion judge ruled that the expert report was struck and that the expert was prevented from testifying at trial.
This is a significant ruling that can assist in reducing the length and number of motions at civil trials and also provide a mechanism for counsel to deal with evidentiary issues in advance to avoid an unanticipated ruling at trial that an expert’s evidence is not admissible. Other sources have similarly promoted this method of resolving evidentiary disputes prior to trial (such as the Advocates’ Society in their Best Practices for Civil Trials Manual (see Best Practice 7.1 and 7.2).  It will be interesting to monitor this decision and to track whether other judges are willing to make similar evidentiary rulings prior to trial.

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Paul Brett, a CDL Member in Winnipeg, reports a clean win for an insurer as plaintiff in a commission claw back claim commenced by Thompson Dorfman Sweatman LLP in the Manitoba Court of Queen’s Bench on behalf of La Capitale General Insurance Company against two former agents. The Agent Agreement was governed by the law of Ontario. After the litigation was at issue for a period of 1 1/2 years, particulars had been demanded, two volumes of Responses to Particulars had been provided and a Statement of Defence and Counterclaim filed, the defendant agents moved pursuant to the Ontario Arbitration Act to stay the action in favour of arbitration pursuant to an arbitration clause in the Agreement.
Justice Lori Spivak of the Manitoba Court of Queen’s Bench, following a series of cases from the Ontario Superior Court of Justice and the Court of Appeal, dismissed the defendants’ Motion. There is no appeal from a motion for a stay brought under the Arbitration Act.
The lesson learned for defendants of all stripes, which our CDL clients more often than not are, is that if arbitration is to be invoked, it must be sought at the earliest moment, and not after pleading to a plaintiff’s Statement of Claim, here willingly using the Court’s jurisdiction to advance a Counterclaim.

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CDL General


By Heather Vaughan 
Benson Percival Brown LLP

I was lucky enough to be able to attend the DRI – Voice of the Defense Bar’s Women in the Law (WITL) conference in Scottsdale, Arizona this past February.  WITL is a committee connecting the 6,000 female DRI members to provide opportunities for business and professional development, to support women’s career advancement, and to provide a forum to raise awareness about issues of interest to women lawyers.

I was happy to be an attendee, but I was also undercover for the CDL WC.  What ideas could we use?  How are they so successful? Could the secrets of these American attorneys’ ways be translated back to Canada?

Let’s start with leadership and empowerment. 

When I first attended the seminar in 2008 and 2009, I met some amazing people.  Want to know what those same people are doing now?  They are running the show.  My old co-attendee, Kirsten Small?  The program chair this year (nice work Kirsten!).  My old friend Kori Carew?  A presenter who gave a riveting talk on cultural competency.  Don’t even get me started on Heidi Friedman, Committee Chair, an authentic and efficient powerhouse or Lana Olson now stolen away from WITL by the DRI Board of Directors as 1 of 5 elected national directors.   WITL helped these leaders get started.

Can we talk also about networking done right?

Networking can feel so sleazy, can’t it?  Fostering professional relationships, however, is essential to a fulsome and satisfying career.  Networking at the WITL seminar is encouraged by being fully integrated into the event.  True connections are made when you are attempting a morning hike up Camelback Mountain.  How fake can you be when you are taking line dancing lessons and huddling around a bonfire at the foot of Mummy Mountain?  Small group activities such as drawing, painting, yoga, board games, and trivia competitions allowed for engagement on a deeper and more personal level.  I certainly learned a lot about my 8 new friends as we pondered random questions left at our table at the WITL award luncheon (honouring our very own Sandra Corbett I might add!).  Thursday night dine-arounds allowed attendees to head off the resort on a mini culinary adventure.  These events allow authentic connections to be formed; connections that lead to relationships of mentorship, new career opportunities, mutual peer support and the coveted concrete business referral.

Education and empowerment…

It wasn’t all fun and games.  The seminar featured a robust agenda.  Keynote speaker, Jessica Kornberg - the first women CEO of Bet Tzedek, a leading public interest law firm in LA, and founder of Ms. JD - spoke about the importance of relationship building and pursuing opportunities in her talk, “Nothing Ventured, Nothing Gained” (my new #girlcrush).  Other topics included managing litigation risk, business principles for lawyers, litigating in the spotlight and circumventing the effects of gender stereotypes that hold female attorneys back in their careers.  The seminar closed with an interactive quiz show on professional responsibility.

Get involved now!

The goal of the Steering Committee of the CDL WC is to serve its members by focusing on leadership, empowerment, education and networking (L.E.E.N.).  My (not-so) covert operation to the WITL seminar has given me some great motivation and ideas to share as we move forward in our planning.  The strength of this group, however, depends ultimately on the strength and engagement of its members.   So this is a call out to you (yes you!). What do the L.E.E.N. principles mean to you?  What are your top ideas on how the L.E.E.N goals can be met?  How can we help each other advance in our careers?

Join us on the Steering Committee and help direct this initiative – who knows where it might take you.

And for those of you enticed by my report on the DRI WITL conference, save the dates January 31-February 2, 2018.

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The CDL Board of Directors recently held a strategic planning session to map out future directions for the organization. In particular, CDL’s increased involvement in public policy consultations were recognized. Stay tuned as CDL develops strategies to expand its influence in the public sphere, and works to share its involvement more broadly with the membership.

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Join the leaders of CDL by serving on the Board of Directors and help shape the growth and development of your association across the country. CDL welcomes applications from enthusiastic and motivated members that represent the diversity and experience of Canada’s defence community. Click Here to download the application and get more information on the selection process. The CDL board strives to govern strategically by focusing on the future, allocating a majority of time on issues with long-term impact for CDL. Applications will be accepted until April 3, 2017.

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Nominations are now open for the Lee Samis Award of Excellence and the Richard B. Lindsay QC Exceptional Young Lawyer Award. Take a moment to read about these awards and nominate a deserving colleague. Nomination forms are available on CDL’s website.   

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We’ve opened the application process for CDL Counsel Representative and CDL Regional Representative. Please contact Randi if you would like the application re-sent to you. 

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Sandra Corbett QC was a recent winner of the Mary Massaron Award for the Advancement of Women in the Legal Profession from DRI. It’s a wonderful honour, and a testament to Sandra’s continued support and commitment to the advancement of women in the legal profession.  The award is presented to a DRI member who has demonstrated a high regard for diversity and a commitment to advocating the inclusion and promotion of women as well as fostering women's initiatives and actively promoting positive mentoring relationships with other women in the legal profession. 

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Do you know a current law school student in Canada? Tell them to check out the CDL Foundation annual essay prize. Visit for details.  

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Consider the CDL Foundation – support excellence in legal education through our scholarship award program. Donate online at

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