Tag: Section 4 Limitation Act

Plaintiff's Are "Entitled To Rely" On Representations of ICBC in Naming Defendants in Pleadings

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, addressing whether a party should be substituted in on-going litigation where the Defendant was incorrectly named due to representations of ICBC.  In short the Court held substitution should be permitted in such circumstances.
In this week’s case (Bedoret v. Badham) the Plaintiff was involved in a 2009 motor vehicle incident.  After retaining counsel ICBC wrote to the Plaintiff’s lawyer indicating that the other motorist involved in the incident was a Mr. Badham.  The Plaintiff initiated a lawsuit against this individual.  After the limitation period expired ICBC responded to the lawsuit denying that Mr. Badham was involved in the incident.  The Plaintiff then sought to name ICBC as a ‘nominal defendant’ pursuant to section 24 of the Insurance (Vehicle) Act.  ICBC opposed the application.   Master Young criticized ICBC’s position calling it ‘astonishing‘ and finding that an order adding ICBC to the litigation was appropriate and further went on to award increased costs.  In doing so the Court provided the following reasons:
[16]         ICBC takes the astonishing position in this application that plaintiff’s counsel should not have relied on the March 1, 2010 letter setting out the third party particulars. If that letter cannot be relied on by the plaintiff’s counsel, then I wonder what the purpose of sending the letter is. The plaintiff’s counsel submits, and I accept, that it is standard practice in the personal injury bar to send an introductory letter asking ICBC for particulars and for copies of statements. It is common practice to wait for the reply letter before issuing a notice of civil claim. No letter was ever sent to the plaintiff’s counsel advising him that the contents of the March 1, 2010 letter were incorrect. It was not until the response to civil claim was filed after the expiry of the limitation period that ICBC informed the plaintiff that the named third party was not the driver of the vehicle that caused the accident.
[17]         Now ICBC opposes the application to be added as a nominal defendant. It submits that the plaintiff knew or ought to have known that ICBC was handling this file as an unidentified motorist case despite the fact that the official letter from ICBC to his lawyer said exactly the opposite…
[22]         …ICBC asserted to counsel for the plaintiff in the official first letter that Jaswinder Badhan was the driver of the vehicle. This was long after any discussions with the unrepresented plaintiff and in response to the standard letter sent at the commencement of all motor vehicle accident cases. Plaintiff’s counsel was entitled to rely on the information contained in the letter. If ICBC later learned that it was in error, it had a responsibility to correct that error so as not to mislead the plaintiff. Failing to do so until after the expiry of the limitation period and then opposing the amendment to the claim is unreasonable…
[32]         I find that it is just and convenient to add ICBC as a nominal defendant. I do not find the delay in applying to court to be inordinate. I will not order that the action against Mr. Badhan be discontinued. I will order that the misnomer be corrected.
[33]         As a result of the unreasonable position taken by ICBC in this case, I find that Scale B costs do not adequately compensate the plaintiff, and I order that the proposed defendant, ICBC, pay costs to the plaintiff in any event of the cause at Scale C.

Foreign Insurers Entitled to Rely on s. 103 Limitation Defence; Adding Defendant Beyond Limitation Discussed


Reasons for judgement were released today by the BC Court of Appeal addressing the ability of foreign insurers to rely on the s.103 limitation defence for no-fault accident benefits.
By way of background, BC’s Financial Institutions Act requires out of Province vehicle insurers to sign a “Power of Attorney Undertaking” in essence promising to provide the minimum insurance coverage available in BC when their insured vehicles are travelling in this Province.  As many North American jurisdictions have insurance limits well below those required in BC this often creates excess exposure for foreign insurers.
The Court of Appeal confirmed PAU signatories can take advantage of the limitation contained in s. 103 of BC’s Insurance (Vehicle) Regulation. The Court further discussed the common sense approach BC law imposes in adding a defendant to an existing lawsuit despite the availability of a limitation defence.
In today’s case (Moldovan v . Republic Western Insurance Company) the Plaintiff was injured while travelling as a passenger in a rented U-Haul vehicle.  The vehicle was insured by the Republic Western Insurance Company.  The Plaintiff sought no fault benefits and sued ICBC.  When he realized he sued the wrong insurer the limitation period under s.103 of the Insurance (Vehicle) Regulation had passed.
He sought to add RWIC to the existing lawsuit which the Court of Appeal ultimately permitted.  In doing so the Court explained that while a foreign insurer PAU signatory can take advantage of the s. 103 limitation period the Court retains a discretion to add a Defendant to an existing lawsuit even beyond the limitation period due to section 4(1)(d) of BC’s Limitation Act and further due to the former Rule 15(5)(a) which is reproduced as the new Supreme Court Rule 6-2(7).  The Court provided the following reasons:
[17] As will be seen below, I am of the opinion that while s. 103 would normally be available to RWIC to assert in defence of the plaintiff’s claim, s. 4(1)(d) of the Limitation Act nevertheless does permit the court to join RWIC as an additional defendant. I also conclude that RWIC should be so joined in the circumstances of this case…
[25] I conclude that the chambers judge erred in declining to apply s. 103 on the basis that the PAU does not constitute an agreement to incorporate into RWIC’s insurance policy all the terms that are required to be incorporated in a policy issued by ICBC.  The fact that s. 103 was not incorporated into U-Haul’s rental contract did not make it somehow inapplicable to Mr. Moldovan, any more than the silence of a British Columbia policy on the question of limitation would make it inapplicable to a claim against ICBC.  As a person claiming benefits under Part 7 in a British Columbia action, the plaintiff is subject to the statutory limitation in s. 103.  No breach of the principle of extraterritoriality arises…

[27] I set out below the material provisions of s. 4 again for convenience:

4(1)      If an action to which this or any other Act applies has been commenced, the lapse of time limited for bringing an action is no bar to

(a)        proceedings by counterclaim, including the adding of a new party as a defendant by counterclaim,

(b)        third party proceedings,

(c)        claims by way of set off, or

(d)        adding or substituting a new party as plaintiff or defendant,

under any applicable law, with respect to any claims relating to or connected with the subject matter of the original action…

[35] The circumstances surrounding the plaintiff’s claim, which need not be rehearsed here, were reviewed by the Master.  Most important, he found that the plaintiff’s delay “resulted not from any tactical decision designed to gain an advantage for the plaintiff but from solicitor inadvertence or an honest error in judgment.”  As against this, RWIC has not alleged any particular prejudice. A helpful summary of the law on the weighing of relative prejudice in this context is found in the analysis of Martinson, J. in Wadsworth v. McLeod, supra:

Regard must be had for the presence or absences of prejudice. There must be a balancing of prejudices: Teal at p. 299. Prejudice can be assumed, or actual.

Prejudice means prejudice associated with the delay itself. The fact that an opposing party is affected negatively by such an amendment does not mean that he is prejudiced. The prejudice must affect the ability to respond to the amended claim: Bel Mar Developments Inc. v. North Shore Credit Union, [2001] B.C.J. No. 512, 2001 BCSC 388 at para. 9.

I agree with the following comments of Master Bolton in Takenaka v. Stanley, [2000] B.C.J. No. 288, 2000 BCSC 242 at paras. 41 and 42:

Putting aside any issues of actual prejudice in addition to the prejudice resulting from the loss of the cause of action or of the limitation defence, I am satisfied that the prejudice to a plaintiff in the former event will usually be greater than the prejudice to a defendant in the latter. In the former case the plaintiff loses the opportunity to ask a court to consider a claim that the defendant has done something the law of the land considers to be actionable. In the latter, the defendant loses a windfall opportunity to avoid the issue altogether. Their respective situations may be precisely balanced in purposely financial terms, but not, I conclude, as a matter of justice. A right to seek justice cannot fairly be equated with a right to cut short the search without an answer.

I believe that his analysis provides a firmer foundation for the conclusion I reached at paragraph 68 of the Mah decision ([2000] B.C.J. No. 44), that if all else is equal the balance of prejudice should be resolved in favour of the plaintiff.”  [At paras. 22-4.]

[36] In the circumstances of this case, it seems to me that the balance of prejudice is clearly in the plaintiff’s favour, and that it is just and convenient that RWIC was added as a defendant notwithstanding the time limitation in s. 103 of the Regulation.  I would therefore dismiss the appeal and confirm the order of the chambers judge below, although for different reasons than those she expressed.

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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