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Tag: Goundar v. Nguyen

Can a Liability Admission Reached by Agreement Be Judicially Set Aside?

The BC Court of Appeal had an opportunity to address this issue and the short answer is yes.
In this week’s case (Goundar v. Nguyen) the Plaintiff was injured in a multi-vehicle collision. The Plaintiff sued two motorists and ICBC initially denied fault on behalf of both.  As the lawsuit progressed the Defendant’s lawyer ‘inadvertently’ agreed to admit liability on behalf of one Defendant in exchange for a discontinuance against the second Defendant.  This deal was agreed to  and an amended Response was filed.  Subsequently a Court order was obtained setting aside the admission of liability accepting that it was agreed to inadvertently by defence counsel.
The Plaintiff appealed arguing the liability agreement superseded the Court’s jurisdiction to set aside the admission.  The BC Court of Appeal disagreed and held that the Court retained the discretion to set the admission aside.  In reaching this conclusion the Court provided the following reasons:
[26]         I have already concluded that Rule 7-7(5) applies to withdrawing an admission even if it arose from an agreement, and determined that the agreement in issue in this case does not purport to attempt to oust the application of the Supreme Court Civil Rules and, in particular, the rule governing the withdrawal of an admission made in a pleading.  The fact of the agreement and the conduct of the parties relying on it is a factor that can, to the extent necessary, be taken into account in the balancing of prejudice as part of answering the ultimate question whether the interests of justice require permitting the admission to be withdrawn.
[27]         In the result, I am satisfied that the chambers judge adopted the correct test in deciding the issue before her.
[28]         Allowing the withdrawal of an admission is a discretionary matter.  Deference is owed to the chambers judge, unless the judge erred in principle in the exercise of her discretion.  Here I see no such error.  The judge found there to be a triable issue.  She concluded that the admission had been made inadvertently.  She balanced any prejudice arising from the proposed withdrawal of the admission.  She addressed the extent to which a prejudice could be compensated by costs.  I would not interfere with the exercise of the chambers judge’s discretion.

More On Withdrawing Admissions of Liability

As previously discussed, Rule 7-7(5) canvasses the BC Supreme Court’s authority to allow a party to a lawsuit to withdraw a formal admission made the course of litigation.
A common admission canvassed under this rule deals with fault following a crash.  Occasionally ICBC admits fault on behalf of a Defendant and for various reasons wishes to withdraw such an admission as the lawsuit progresses.  Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, dealing with such a scenario.
In this week’s case (Goundar v. Nguyen) the Plaintiff was involved in a 2008 collision.  ICBC initially denied fault on behalf of the Defendant.  In the course of the lawsuit the Defendant’s lawyer ‘inadvertantly’ agreed to admit liability on behalf of the Defendant and an amended Response was filed.
The Defendant brought an application to withdraw its admission.  In allowing this the Court found that the admission was made inadvertently and provided the following reasons:

[35] Rule 7-7(5) provides:

A party is not entitled to withdraw…

(c) an admission made in a pleading…

except by consent or with leave of the court.

[36] The cases to which I was referred dealing with withdrawal of admissions treat admissions made by inadvertence with caution.  Many of the cases deal with deemed admissions through failure to respond to a Notice to Admit.  However, the considerations remain the same.  The court will consider if the admission was made inadvertently, if it is in the interests of justice to allow the issue to be resolved by a trial, and if there will be no prejudice to the party which cannot be compensated by costs.  If satisfied of those factors, leave to withdraw such an admission will generally be granted. (Abacus Cities Ltd. v. Port Moody [1980] B.C.J. No. 1749 and cases cited therein).

[37] The balancing of the interests of justice requires the applicant to show that there is a triable issue in respect of the admission.  The chambers judge must not make a final determination, but will simply determine if there is an issue worthy of being tried.  Prejudice resulting only from the benefit of relying on the admission occasioned by the inadvertence is not of significance (Can-Am, supra)…

[42] I am satisfied there is a triable issue on liability, based on the information put before me as to Goundar’s allegations, potential evidence from Maharajh, and Nguyen’s ticket on the one hand, and Nguyen’s and Stewart’s evidence on the other.  As well, Nguyen has her own action which is still outstanding.  There is a conflict in the evidence about the collision, which should be resolved by a trial.

[43] Although the plaintiff says the relevant admission was made deliberately and with no new facts available, that is not borne out by the affidavit material.  The lawyer has set out clearly how she came to make this admission in the face of her own assessment of the case and contrary instructions.  She admits she did not remember her instructions had changed and she did not conduct a review of the file before following a prompt from her paralegal to follow up on ICBC’s original letter.  The initial suggestion by ICBC to canvass plaintiff’s counsel regarding the proposal was made without the benefit of Mr. Stewart’s evidence, and the relevant instructions not to admit liability were in place at the time the lawyer amended the Response to admit liability.  I am satisfied that the defendant has demonstrated that the admission was made inadvertently.

[44] As for the balancing of prejudice, nothing irrevocable has been done that cannot be compensated for in costs.  The interests of justice require that this unfortunate situation be set back on track rather than allow the Goundar action to proceed on an untested and possibly erroneous foundation which has come about as a result of a mistake.

[45] If the admission of liability is left in place, the possibility of future remedies exists through an action by ICBC against the lawyer, and also possibly by Nguyen against ICBC for failure to defend her in this action.  However, that is not a satisfactory approach.  Goundar’s action would still be predicated upon a mistaken admission, and the interests of justice are not served by failing to rectify a mistake in circumstances where any prejudice can be compensated for in costs.

[46] The delay in bringing the application, once the lawyer became aware of her mistake, is not inordinate.  The trial date is four months away, which allows time for additional discovery.  While the deadline for expert reports is approaching, any prejudice arising from that factor can be compensated for in costs, as set out below.

[47] Goundar says this case is taken outside the usual bounds of withdrawals of admissions by the bargain she struck – discontinuing the action against Stewart in exchange for an admission of liability on behalf of Nguyen.  The defendants must be held to their bargain.  However, the Court of Appeal held in Drake (Guardian ad litem of) v. Clark (1996) 31 B.C.L.R. (3d) 289 that it is no longer necessary for the doctrine of promissory estoppel to be invoked in applications to withdraw admissions.  Withdrawal may be made if it is in the interest of justice.  As well, in this case, unlike Phil Whittaker Logging Ltd., supra, and the other cases referred to by the plaintiff, the admission was made inadvertently.