Tag: Substitution of Parties

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.

Substitution Orders in ICBC Hit and Run Claims are "Mandatory in Their Nature"

Last year I questioned the correctness of reasons for judgement which refused to make a substitutional order in an ICBC Claim involving an unidentified motorist.  Reasons for judgement were released this week by the BC Supreme Court,  Chilliwack Registry  further addressing this area of the law finding that substitution orders are mandatory once the identity of an unidentified motorist becomes ascertained.
In this week’s case (McStravick v. Metzler) the Mr. Metzler and Ms. McStravick were occupants of a motorcycle involved in a serious collision.  An allegation was made that an unidentified motorist caused the collision.  ICBC was named as a nominal defendant under section 24 of the Insurance (Vehicle) Act.
Evidence disclosed on the eve of trial and trough witnesses during trial gave rise to identifying the unknown motorist.  The Plaintiff brought an application to substitute this person for ICBC in the lawsuit.  The motorist and ICBC vigorously oppose the application.  Mr. Justice Blok ordered the substitution and in doing so provided reasons highlighting the mandatory nature of Section 24(6) of the Insurance Vehicle Act.  The Court provided the following reasons:
[53]         I would observe at the outset that s. 24(6) of the Insurance (Vehicle) Act is mandatory in nature.  If the identity of the driver is ascertained then that person must be added as a defendant in substitution for ICBC.  The factors applicable to cases where parties are being added under the Supreme Court Civil Rules therefore have no application: Tse v. ICBC (1996), 24 B.C.L.R. (3d) 394 (S.C.).
[54]         While counsel for Ms. Sidwell concedes that the Court probably does not have jurisdiction to refuse to substitute an ascertained defendant in place of ICBC, he said that conditions may be specified, as expressly provided by s. 24(6).  However, counsel did not suggest any conditions that might be appropriate, short of refusing the application altogether.  Given the mandatory language of the section, a refusal cannot be a condition.
[55]         The mandatory language of the section also limits, and probably eliminates, any scope for the application of the equitable principle of estoppel insofar as applying the estoppel principle would operate to defeat the intent and effect of the section.
[56]         Even if there might still be some room for estoppel to operate, I am not satisfied that estoppel has been made out on the facts of this case.  Ms. Sidwell submits that as a result of the “shared assumption” of all counsel that she was not the unknown driver, she ceased being represented by counsel and did not take part in the trial.  What that submission fails to address is the fact that (1) the substitution application can be made at any time prior to judgment being granted, and (2) her interests were represented throughout by ICBC as nominal defendant.  As to the former, since s. 24(6) allows for a substitution application to be made at any time prior to judgment, a trial might well be completed before an application is made and with no hint of it beforehand.  Here, Ms. Sidwell had two years or more of advance notice and she had representation by counsel during that time.  In addition to her own counsel, counsel for ICBC represented the interests of the unknown driver, whoever that might have been, and thus in some respects at least she had two lawyers representing her interests until shortly before trial.
[57]         Ms. Sidwell complains that she was deprived of taking part in the trial, but until she was made a party she would have had no standing to take part.  She points to no prejudice associated with the fact that her interests, at least her interests in a general sense, were represented by counsel for ICBC instead of her own counsel.
[58]         Further, I do not consider that an estoppel against ever bringing a substitution application arises in this case.  Counsel for the plaintiff Metzler submits that while the last-minute disclosure of the Sidwell and Popovich witness statements revived the possibility that the plaintiffs would bring a substitution application – a possibility that counsel expressly stated at the outset of the trial – it was not until those witnesses had given evidence and their evidence tested in cross-examination that they considered the plaintiffs had a sufficient basis on which to bring the application.  In these circumstances I consider this approach to have been reasonable and prudent.  However, ICBC and Ms. Sidwell argue that the plaintiff Metzler is bound by his counsel’s letter so as to foreclose any possibility of a successful substitution application.  This would mean that even if Ms. Sidwell had expressly admitted at trial that her driving was the cause of the accident the defendants could not have substituted her as defendant in ICBC’s stead.  That cannot be correct.
[59]         Finally, there is an additional difficulty in applying an estoppel here in any event because the primary facts asserted as giving rise to an estoppel apply only to the plaintiff Metzler and not to the plaintiff McStravick.  The most that can be said in regards to Ms. McStravick is that her counsel attended a trial management conference at which the judge was told that the application was not being brought.  Only in Mr. Metzler’s case was a letter written, in arguably more definitive terms.  This leaves the unsatisfactory possibility that Ms. Sidwell might be substituted as a defendant in one case but not the other.  Fortunately I do not have to address this difficulty because I conclude that even on the strongest facts that are alleged an estoppel of the type and scope asserted does not arise.

Party Substitution Orders and ICBC Unidentified Motorist Claims


As previously discussed, when injured by the fault of an unidentified motorist in BC, a Plaintiff can sue ICBC directly for damages in place of the unknown motorist provided section 24 of the Insurance (Vehicle) Act is complied with.
After a lawsuit starts, if the unknown motorist becomes known then the Plaintiff can substitute the appropriate party.  Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, dealing with such an application and, interestingly, denying it alleging the Plaintiff failed to identify the appropriate party in a timely fashion.
In this week’s case (Turnbull v. ICBC) the Plaintiff was allegedly injured when struck by a customer at his store.  The Plaintiff failed to properly record the licence plate information of the motorist.  The Plaintiff sued ICBC and as the litigation progressed the Plaintiff believed he was able to identify the offending motorist through employment records identifying the correct licence plate of the vehicle alleged to be involved.
The Plaintiff brought an application to substitute this person into the lawsuit.  The application was denied with Master Caldwell providing the following reasons:

[22] In the present case, the plaintiff knew of the existence of documentation which would have identified potential defendants at the time of and at all times following the alleged incident.  The plaintiff retained counsel shortly after the incident.  The plaintiff and his counsel were aware well before the expiry of the limitation period that identification of the vehicle and driver was a central and important issue in the claim.  No application was made during the limitation period, or even during the year following the expiry of the limitation period, to pursue the documents which the plaintiff knew existed and knew might well identify the vehicle and the driver.

[23] In short the plaintiff, and the plaintiff alone, bears the responsibility for the failure to identify potential defendants in a timely fashion and certainly within two years of the incident plus one year to serve.  In such circumstances, if limitation periods are to have any meaning and effect in our system, the interests of justice and the potential prejudice to the intended defendant outweigh the interests of the plaintiff.

I question the correctness of this decision given section 24(6) of the Insurance (Vehicle) Act which provides as follows:

(6) If the identity of the unknown owner or driver is ascertained before judgment is granted in an action against the insurer as nominal defendant, then, despite the limitation period in the Motor Vehicle Act, that owner or driver must be added as a defendant in the action in substitution for the corporation, subject to the conditions the court may specify.

This lack of duty when seeking to substitute parties under s. 24(6) should not be confused with a Plaintiff’s duty to continue to make all reasonable efforts to ascertain the identity of the unknown motorist to maintain a section 24 action against ICBC through to trial.
I understand that the above decision is under appeal and if further reasons are issued addressing this I will provide an appropriate update to this post.

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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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