Last week the BC Court of Appeal provided reasons for judgement clarifying in what circumstances a Plaintiff can have separate proceedings to address the issue of increased premiums following a collision versus a tort claim for other damages. In short the Court held that a separate claim against ICBC for breach of contract or breach of statutory duty (to revisit their division of liability for insurance premium purposes) will not be a barrier to a separate tort claim for damages against the at fault motorist. However, if a claim is filed against the tortfeasor for damages for increased premiums then a subsequent lawsuit for other damages would be estopped.
In last week’s case (Singh v. Mchatten) the Plaintiff sued another motorist for damages as a result of a motor vehicle collision. The Plaintiff succeeded and was awarded damages for his deductible to be returned with a finding the Defendant was liable for the collision. The Plaintiff then commenced a Supreme Court action for damages for personal injuries sustained in this crash. The second action was dismissed by the Court of Appeal who found the action was estopped by virtue of the prior litigation. In doing so the Court of Appeal provided the following reasons:
 The other flaw in the judge’s reasoning lies in her equating the respondent’s motivation in bringing the first action with a cause of action. The causes of action in the two proceedings are undeniably the same: damages for negligence. In order to achieve the respondent’s goal of reversing ICBC’s fault determination and to recover the deductible, it was necessary for the respondent to sue the driver and owner/lessor and prove all the elements of negligence: duty of care, standard of care, causation and loss. He would have to repeat the same process in the Supreme Court action in order to recover personal injury damages.
 The respondent could have sued ICBC in Small Claims Court without attracting an estoppel defence in the later proceeding. Those were the circumstances of Innes v. Bui, 2010 BCCA 322.
 In that case, Ms. Bui was unhappy with ICBC’s assignment of fault to her in a two-vehicle accident. She sued ICBC in Small Claims to reverse the determination but decided to substitute Ms. Innes as the defendant. The judge dismissed the action on the ground that he could not decide whose version of the accident to accept and since Ms. Bui bore the onus of proof on the balance of probabilities, she lost. Then Ms. Innes sued Ms. Bui for damages in the Supreme Court and met a plea of res judicata which was upheld. For this Court, Low J.A. reversed the decision and held that no liability determination was made in the first instance and so the doctrine did not apply. He went on to observe:
 In the Small Claims action, Ms. Innes was the wrong defendant. She certainly was not a necessary defendant. That action was not based in tort. It was either in contract or under statute, or both, and the only issue raised by the pleadings was whether ICBC acted properly or reasonably in administratively assigning responsibility for the collision to Ms. Bui alone. That was an issue only between Ms. Bui and ICBC. Ms. Innes apparently had no say about being substituted as the defendant in place of ICBC. She had no control over the conduct of the action and she had no right of appeal independent of ICBC. To say that the judgment given in the Small Claims action should have the effect of denying Ms. Innes the opportunity to present her own case stretches the equitable defence of res judicata to limits which, in the interests of justice, the defence should not be taken. In that action, Ms. Innes did not have her day in court in any real sense.
 On this basis I question whether it is correct to say that the parties, in reality, were the same in the two actions or that any consideration of privy arises.
 In any event, if all the criteria for res judicata were met, I would think that this is a special circumstances case in which the doctrine should not be applied.
 In the present case, the judge purported to follow Innes v. Bui. She concluded her reasons in this way:
 The facts of this case are similar to the facts in Innes v. Bui and Evans v. Campbell [(1993), 77 B.C.L.R. (2d) 211 (C.A.)]. Whether issue estoppel or cause of action estoppel is applicable, at the end of the day the court must determine whether it should exercise its discretion to bar the action by reason of res judicata or whether there are exceptional or special circumstances that should apply.
 I find that all of the criteria necessary for cause of action estoppel or issue estoppel have not been met. If I am wrong, there are special circumstances not to apply res judicata for to do so would cause a real injustice to the plaintiff. The plaintiff has not had his day in court on his claim for damages for personal injuries arising out of the accident. It may be that the issue of liability is res judicata, but the application was not argued on that basis. Rather, it is argued that the plaintiff should have brought his claim for personal injuries at the same time he brought his action in Small Claims Court. In certain circumstances that may be correct but only if the claim can be brought within the monetary limit of Small Claims Court. However, the fact remains that the plaintiff’s claim for damages for personal injuries has never been before a court and considered. To dismiss the plaintiff’s claim at this stage of the litigation would be denying the plaintiff an opportunity to be heard on that issue and unjust.
 With respect, Innes v. Bui, is not similar to the case at bar but is its mirror opposite. The Small Claims action in this case is not framed in terms of contract or breach of statutory duty against ICBC but in negligence against alleged tortfeasors…
 For these reasons, I would allow the appeal, set aside the order below, and dismiss the action.
You can click here to read my comments on the BC Court of Appeal’s previous decision of Innes v. Bui.
(UPDATE June 28, 2012 – the case discussed in the below post was reversed by the BC Court of Appeal in reasons for judgement released today; you can click here to read the Court of Appeal’s reasons)
Reasons for judgement were released last week by the BC Supreme Court, Vancouver Registry, discussing this topic.
In last week’s case (Singh v. McHatten) the Plaintiff was involved in a 2006 motor vehicle collision. Following the collision ICBC found the Plaintiff at fault. Displeased with this decision, the Plaintiff sued the Defendants in small claims court asking the Court to decide the issue of liability. The Plaintiff sought damages for his deductible and increased insurance premiums. His trial succeeded with the Court finding the Defendants at fault and awarding damages to the Plaintiff.
Before the limitation period expired the Plaintiff sued for damages stemming from his personal injuries from the same collision. He did so in the BC Supreme Court. ICBC brought a motion to dismiss the lawsuit arguing that the Plaintiff was “estopped” from suing again due to the small claims court trial. Madam Justice Loo disagreed and allowed the personal injury lawsuit to proceed. In dismissing ICBC’s motion the Court provided the following reasons:
 In my view the cause of action in the prior Small Claims action is distinct from the cause of action in this Court. While the Notice of Claim filed by the plaintiff in Small Claims Court claimed “vehicle damage & repair costs”, it is clear on a review of the transcript of the proceedings that the plaintiff’s vehicle had been repaired by ICBC; he was not seeking damages for repair costs because ICBC had paid the repair costs. The primary issue was ICBC’s determination that the plaintiff was wholly at fault for the accident and the plaintiff’s increased insurance premiums. Counsel for the plaintiff made it clear that the claim for personal injuries and damages would be dealt with later, and that was understood by counsel for ICBC. On that basis neither the third nor the fourth criteria for cause of action estoppel, or the first criteria for issue estoppel have been met.
 The facts of this case are similar to the facts in Innes v. Bui and Evans v. Campbell. Whether issue estoppel or cause of action estoppel is applicable, at the end of the day the court must determine whether it should exercise its discretion to bar the action by reason of res judicata or whether there are exceptional or special circumstances that should apply.
 I find that all of the criteria necessary for cause of action estoppel or issue estoppel have not been met. If I am wrong, there are special circumstances not to apply res judicata for to do so would cause a real injustice to the plaintiff. The plaintiff has not had his day in court on his claim for damages for personal injuries arising out of the accident. It may be that the issue of liability isres judicata, but the application was not argued on that basis. Rather, it is argued that the plaintiff should have brought his claim for personal injuries at the same time he brought his action in Small Claims Court. In certain circumstances that may be correct but only if the claim can be brought within the monetary limit of Small Claims Court. However, the fact remains that the plaintiff’s claim for damages for personal injuries has never been before a court and considered. To dismiss the plaintiff’s claim at this stage of the litigation would be denying the plaintiff an opportunity to be heard on that issue and unjust.
 The application is dismissed with costs.
As a point of interest, the recent BC Court of Appeal case of Innes v. Bui is worth reviewing for the Court’s comments on appropriate parties to sue when the only dispute following a collision is ICBC’s determination of fault and the premium consequences that flow from this.
Res Judicata is a legal principle which prevents a claimant from having their legal issues decided twice. Once you’ve had your day in Court on an issue you are stuck with the result (subject to an appeal). You can’t sue again and have a second trial hoping for a different result. Reasons for judgement were released today by the BC Court of Appeal discussing the scope of this principle.
In today’s case (Innes v. Bui) the parties were involved in a a two vehicle intersection collision in 2001. They approached each other from opposite directions. The Plaintiff (Innes) attempted to go through the intersection and the Defendant (Bui) commenced a left turn. The vehicles then collided.
ICBC, as is often the case in British Columbia, was the insurer for both parties. ICBC decided that the Ms. Bui was entirely at fault. This raised her insurance premiums. Ms. Bui sued ICBC in small claims court arguing that she was not at fault and should have her increased premiums returned. Eventually Ms. Innes was substituted for ICBC. Ms. Innes was defended by an ICBC appointed lawyer. ICBC argued that Ms. Bui was at fault.
At trial the Judge found that both Ms. Innes and Ms. Bui were ‘honest people” and he could not choose between their testimony. The Small Claims judge dismissed the lawsuit finding that “In essence, I cannot choose between them, and to use a probably inappropriate sports metaphor, tie goes to the defendant in a case like this. In other words, because I cannot decide who it is that I believe, I have to dismiss the claim, and that is what I am doing.”
At the same time Ms. Innes filed a separate lawsuit against Ms. Bui in the BC Supreme Court alleging that Ms. Bui was at fault. The Plaintiff was asking for compensation for her personal injury claims. ICBC appointed a lawyer to Defend Ms. Bui and in this lawsuit argued that Ms. Innes was at fault. ICBC brought a motion asking the lawsuit to be dismissed based on the principle of “res judicata“. They argued that since the Small Claims judge already heard the issue of fault and called it a ‘tie‘ Ms. Innes’ case needs to be dismissed in the same way that Ms. Bui’s case was.
A chambers’ judge agreed and dismissed the lawsuit. The Plaintiff appealed. The BC High Court overturned the dismissal and found that the Chamber’s judge misapplied the law of ‘res judicata’. The BC Court of Appeal provided the following useful analysis setting out the limits of the res judicata principle:
19] There are two forms of the doctrine of res judicata: cause of action estoppel and issue estoppel. Both operate where the court has adjudicated a cause of action between two or more parties and one of them seeks to re-litigate on the same facts. Where the cause of action is the same, cause of action estoppel operates to prevent re-litigation of any matter that was raised or should have been raised in the prior proceeding. Where the cause of action in the two proceedings is different, issue estoppel operates to prevent re-litigation of any issue determined in the prior proceeding.
 The pre-conditions to making out issue estoppel are stated in Angle v. Minister of National Revenue,  2 S.C.R. 248 at 254:
Lord Guest in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), at p. 935, defined the requirements of issue estoppel as:
… (1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies …..
It seems to me that in the circumstances of this case, all that had to be considered on both motions before the court was whether the criteria set out in Angle had been met and, if they had been met, whether the court should exercise its discretion against applying the doctrine of res judicata.
 In my opinion, it cannot be said that the question of liability for the collision was adjudicated upon in the Small Claims proceeding. Having decided as a fact that the parties left their respective stop signs at “more or less the same time”, the Small Claims judge failed to consider the other important factual question before him – whether Ms. Bui had her left-turn signal on. Furthermore, he failed to consider the rules of the road imposed upon each of the parties under the applicable sections of the Motor Vehicle Act, R.S.C.B. 1996, c. 318 and how those rules would apply to the determination of responsibility in tort for the collision. This was not a case of inevitable accident or of no negligence. One or the other of the parties was wholly responsible, or liability was to be divided.
 The reasons of the Small Claims judge fell well short of deciding the negligence question. That issue remains alive in the Supreme Court action. The res judicata arguments of both parties fail.
 The above is enough to allow this appeal.