Citation: Jeffery v. Naugler, 2010 NSSC 385
Date: 20101021
Docket: Hfx 193869
Registry: Halifax
Between:
Girth Ruth Jeffery
Plaintiff
v.
Chris Naugler and ING Insurance Company of Canada,
an Extra-Provincial Insurance Company
Defendants
Judge: The Honourable Justice Patrick J. Duncan
Heard: May 27, 2010, in Halifax, Nova Scotia
Counsel: Michael Dull, for the Plaintiff
D. Geoffrey Machum, Q.C. , and
Christa M. Brothers, for the Defendant,
Chris Naugler
Michael Dunphy, Q.C., and
Jocelyn M. Campbell, Q.C.for the Defendant,
ING Insurance Company of Canada
By the Court:
Introduction
[1] The defendant Chris Naugler moves for bifurcation of the issues of liability and damages in this claim, which arises from a motor vehicle related accident. He is supported in the motion by the co-defendant, ING Insurance Company of Canada. The plaintiff opposes the motion.
Background
[2] In the late afternoon of May 22, 2001, Girth Ruth Jeffery was operating a motor vehicle on Highway 103 in Halifax County. There were three passengers travelling with her.
[3] Ms. Jeffery’s claim alleges that a piece of metal blew through her open, driver’s side, car window, shortly after an open flat bed tractor trailer, operated by the defendant Naugler, passed her. The plaintiff says that she removed her hands from the steering wheel to shield her face, but that the metal struck her glasses, knocking them off. She reached to retrieve the glasses, and in the process began to lose control of her vehicle. Ms. Jeffery was injured when she entangled her arms in the steering wheel during the effort to regain control of her vehicle.
[4] The plaintiff alleges that these events resulted in injury to her arms, shoulders, and neck, for which she seeks damages.
[5] In a claim filed against Mr. Naugler on February 10, 2003, Ms. Jeffery alleged the negligent conduct of Mr. Naugler as the cause of her injury, specifically that the metal object came off of his truck. She pleaded, inter alia, section 248 of the Motor Vehicle Act, R.S.N.S. 1989, c. 293, which if engaged, would create a reverse onus on Mr. Naugler to show that the injury did not arise solely from his conduct.
[6] A motion for summary judgment brought by Mr. Naugler in 2005 was ultimately unsuccessful. see, Jeffery v Naugler 2006 NSCA 117.
[7] An amended statement of claim was filed by the plaintiff on October 26, 2006. The effect of the amendment was to allow for the possibility that the metal object did not come off Mr. Naugler’s truck, but may have been projected from the highway, and into the plaintiff’s vehicle. To that point in time, considerable resources had already been dedicated by the plaintiff and defendant Naugler to discoveries, expert reports and, of course, the summary judgement application and appeal.
[8] The claim was further amended on April 3, 2007 to add the defendant, ING, who is the plaintiff’s insurer. This aspect of the claim seeks recovery, for Ms. Jeffery’s injuries, pursuant to Section D of the Standard Automobile Policy. She pleads that the damages were caused, or contributed to, by an unidentified vehicle, owned and operated by an unidentified person.
[9] On May 1, 2007 the defendant ING crossclaimed against the defendant Naugler.
[10] All claims and the crossclaim have been denied and Defences filed.
[11] On April 30, 2009, the plaintiff filed a request for a Date Assignment Conference (DAC). The defendant ING objected since it had not yet conducted a discovery of the plaintiff. The defendant Naugler also objected as he was seeking further document production from the plaintiff, and that an independent medical examination (IME) of the plaintiff be conducted. The dispute was scheduled for an Appearance Day hearing in June, 2009.
[12] These issues were resolved by a consent order which provided that:
1. ING would complete discoveries by November 17, 2009,
2. The plaintiff would provide documents by November 1, 2009;
3. If the defendants wanted the plaintiff to attend for an IME, they were to provide notice of this by November 30, 2009.
[13] A Date Assignment Conference was held on November 6, 2009. It was agreed that liability and damages were in issue and that 15 trial days would be required. There is no indication in the Memorandum of the conference that bifurcation was being considered. The trial is scheduled to commence, before a judge alone, on November 28, 2011.
[14] Discovery of the plaintiff by counsel for each of the defendants took place on November 19, 2009. Counsel for Mr. Naugler advised in April of 2010, that two IMEs of the plaintiff were being sought.
[15] This motion for bifurcation was filed February 23, 2010 and heard May 27, 2010.
Position of the Defendants
[16] The Insurance Act R.S.N.S. 1989, c. 231 and Regulations made pursuant thereto, provide that a Section D insurer is not liable where a claimant is legally entitled to recover any sum of money under the third party liability section of any motor vehicle liability policy. see, s. 139 Insurance Act; ss. 3(1) and 4(1)(d) of the Uninsured Automobile and Unidentified Automobile Coverage Regulations, N.S. Reg. 94/96; and s. 3 of the Section D provisions in the Standard Automobile Policy. Section D coverage, has been referred to as the “coverage of last resort”.
[17] Counsel submits that it is well established that the Section A insurer must respond to the claim though only one percent of liability can be affixed to the identified and insured driver.
[18] Assuming that some liability is found for the plaintiff’s injuries, the defendants submit that by reason of law, the facts of this case can only support liability attaching to one of them. They argue that the determination of who is liable is a narrow fact finding exercise that could be resolved in a two day hearing and that it is unjust and inconvenient to require both defendants to incur the expense of a much lengthier damage assessment hearing when only one will be called on to answer to that aspect of the claim.
[19] Defendants’ counsel further represents that there is time available in the court schedule that would permit the trial of the liability issue to be conducted soon enough that the time allotted for the trial in November, 2011 could still be used, but for the assessment of damages.
Position of the Plaintiff
[20] The plaintiff submits that the liability aspect of the trial will involve one question: where did the piece of metal come from? Ms. Jeffery is expected to testify that the metal came from the truck. If her evidence is accepted, then Mr. Naugler will be found liable. If her evidence is not accepted as it relates to the point at which the metal originated, then liability, in her submission, will rest with ING.
[21] The plaintiff agrees that it is not possible for both defendants to be found partly responsible. Liability will fall on one or the other. Counsel submits that it is “highly unlikely that liability will be found against neither defendant.”
[22] The plaintiff submits that the following factors operate against severance:
- The merits of the case are irrelevant to the issue of severance;
- that the motion is brought at the “11th hour” and after substantial costs have already been incurred in pretrial proceedings;
- that several witnesses will testify whose evidence will be relevant both to issues of liability and damages;
- that granting severance introduces a real risk of further delay;
- that an assessment of Ms. Jeffery’s credibility in relation to liability is also relevant to the assessment of credibility as related to an assessment of damages;
- that severance will cause the plaintiff to incur the cost and stress of two trials and two sets of pretrial proceedings, as well as the potential for two appeals.
- that Ms. Jeffery should not be subjected to costly multiple proceedings as she is unable to work as a result of her injuries and is now dependant on Canada Pension Plan disability benefits. Following the death of her husband in 2004, the plaintiff has struggled financially and is impecunious.
Analysis
[23] Nova Scotia Civil Procedure Rule 37 provides the court with the discretion to separate or sever parts of a proceeding in the manner proposed by the defendants. The relevant provisions of that rule are:
37.01 A judge may consolidate proceedings, trials, or hearings or may separate or sever parts of a proceeding, in accordance with this Rule.
...
37.05 A judge may separate parts of a proceeding for any of the following reasons:
(a) a party joined a party or claim inappropriately;
(b) although appropriately joined in the first place, it is no longer appropriate for the party or claim to be joined with the rest of the parties and claims in the proceeding;
(c) the benefit of separating the party or claim from another party or claim outweighs the advantage of leaving them joined.
[24] This provision replaces Nova Scotia Civil Procedure Rule (1972) 5.03 which reads:
5.03. (1) Where a joinder of causes of actions or parties in a proceeding may embarrass or delay the trial or hearing of the proceeding or is otherwise inconvenient, the court may order separate trials or hearings, or make such other order as is just.
(2) Where a counterclaim or a third party proceeding ought to be disposed of by a separate proceeding, the court may order the counterclaim or third party proceeding to be struck out or tried separately, or it may make such other order as is just.
[25] As applied to the facts of the case at bar, the focus of the court’s inquiry under the previous rule related to an assessment of inconvenience, delay or embarrassment, if the trial was to go forward as a single proceeding.
[26] The only reported case to date that considers the new rule is Ocean v. Economical Mutual Insurance Company, 2010 NSSC 314, where the decision was framed around the principles set out in Rajkhowa v. Watson 2000 NSCA 50. Smith A.C.J. states at paragraph 21:
In the case of Rajkhowa v. Watson, 2000 NSCA 50 the Nova Scotia Court of Appeal dealt with the issue of severing liability and damages and in the course of its decision, stated the following principles:
- It is a basic right of a litigant to have all issues in dispute resolved in one trial unless it is just and convenient considering the interests of all parties and the proper administration of justice to do otherwise (¶ 27).
- In a judge alone trial the normal practice is that liability and damages are tried together although the court should be prepared to order separate trials whenever it is just and convenient to do so (¶ 51).
- In order to determine what is just and convenient, the court must consider the effect of such a decision on all of the parties as well as its effect on the court system (¶ 53).
[27] This has certainly been the general test applied to date and, in my view may continue to instruct the inquiry to be made under the new rule, which directs the court to ask:
(a) Was a party or a claim joined “inappropriately” at first instance?
(b) If the answer to the first question is no, then the court must determine whether it continues to be appropriate for the party or claim to be joined in the proceeding?
(c) Does the benefit of separating the party or claim from another party or claim outweigh the advantage of leaving them joined?
[28] The onus is on the defendants to satisfy the court that severance should be granted.
[29] In the case at bar, all parties have advanced their arguments on the basis of factors set out in the case law that predates the new rule. Those may be summarized as follows ( with case references):
- whether the proceedings “will be lengthier by reason of severance” and whether the plaintiff would be required to go through two trials and two sets of pretrial proceedings, Lockhart v Village of New Minas 2005 NSSC 93 at paras. 29, 30;
- the extent of overlap of issues and evidence between the severable portions of the proceedings ( Lockhart, supra, at para. 33)
- whether severance would allow the parties to dispense with a major issue that may save time and resources in the long term (Mitsui & Co. (Point Acoini) Ltd. v. Jones Power Co. 1999 NSCA 39, at pp. 6 and 12.
- the relative complexity of the respective severable portions of the proceeding. i.e., whether one portion of the proceeding could proceed more expeditiously on its own than if tied to the more complex portion of the proceeding. Kirby v. Strickland 2008 NSCA 14 at para. 29.
- whether “substantial cost has already been incurred on both issues” of liability and damages. Piercey v. Lunenburg (County) District School Board 1993 NSSC 7; 128 N.S.R. (2d) 232 at para. 20.
- whether “several of the witnesses will give evidence on both the issues of liability and damages” Piercey, supra, at para 20.
- the reasonable likelihood that an appeal against the determination of liability may follow. Piercey, supra at para 21.
- whether the plaintiff’s credibility is a significant issue to be resolved in the determination of liability as well as damages Rajkhowa, supra, at para. 38
- whether there is a reasonable basis to conclude that a trial on liability only will bring that matter to a conclusion, or only add to the cost and delay of the final determination. Fraser v. Westminer Canada Ltd. (1998) 168 N.S.R. (2d) 84 (NSSC), at para 22; Stevens (Guardian ad litem of) v. Welsh (2003) 216 N.S.R. (2d) 253 (NSSC) at para 14.
[30] I have also been referred to and considered the criteria for severance as cited in Nauss v. Rushton 2001 NSSC 167 at para. 24, which incorporates some of the points set out above.
Application of Rule 37.05
(a) Was a party or a claim joined “inappropriately” at first instance? (Rule 37.05(a))
[31] I am satisfied that it was appropriate that both defendants were joined in the claim and that the claims, though founded on differing legal grounds, are appropriately joined as they arise from a single and relatively narrow fact situation.
[32] There is evidence that the piece of metal was subjected to expert examination and testing and found to be consistent with that to be found as part of a motor vehicle. It is a more substantial problem to say that it was manufactured as a part of the truck, but it will be argued that it may still have been on the truck. The court will have the task of sorting out where the metal came from.
[33] Assuming, for the purposes of this motion, that the plaintiff will be able to make out the claim that the metal object was projected back into her vehicle, liability will attach to one or the other of the defendants.
[34] I conclude that it was initially appropriate to join both defendants and both claims in this one proceeding.
(b) If the answer to the first question is no, then the court must determine whether it continues to be appropriate for the party or claim to be joined in the proceeding? (Rule 37.05(b))
[35] Nothing has changed since 2007 (when ING was joined) that renders it, prima facie, inappropriate to have the two defendants and the claims against them tried together. The facts and legal grounds on which they were initially joined still exist as they have since at least 2007.
[36] I conclude that it continues to be appropriate that these two defendants and the respective claims against them are joined in this proceeding.
(c) Does the benefit of separating the party or claim from another party or claim outweigh the advantage of leaving them joined? ( Rule 37.05(c))
[37] It is in consideration of the question posed by Rule 37.05 (c) that judicial statements from cases pre-dating the implementation of the new rules provide particular guidance.
[38] In my view, the underlying basis of the court’s determination has not been changed by the new rule. As the Court of Appeal stated in Kirby, supra, at para. 19:
The judicial exercise of that discretion comes down to this: applying proper legal principles the judge must weigh all of the circumstances involved and determine a course of action that will best attain the object of the Rules which is to secure the just, speedy and inexpensive determination of every proceeding.
[39] What are the “proper legal principles” that apply under the new rule? Other than the “appropriateness” criteria referred to in Rule 37.05 (a) and (b), no one factor or group of factors is singled out in Rule 37.05 as determinative of when severance may be warranted. Delay, embarrassment and inconvenience continue to be relevant factors, but are no longer enumerated considerations. There is no enunciated presumption that a trial is to proceed as one, or in separate stages.
[40] The new rule has codified what the Court of Appeal previously determined - that there is, and has been, a broad discretion resting with the court which could be “ ... adapted to the particular circumstances of the case” as it seeks to resolve questions of severance. see, Kirby, supra, at para. 19. The factors which a court may consider are now open-ended, providing that they assist the court in weighing the respective advantages and disadvantages of severance. The relevant factors may include those which have been identified by courts previously, a number of which I have set out above.
[41] I now turn to the application of these principles to the case at bar.
[42] What are the benefits of severance?
[43] There is an attraction to the defendants’ argument, which presents a simple and apparently logical basis on which to sever. A short trial settling liability eliminates one of the defendants thus relieving one party from having to expend time and resources in responding to a lengthy damages assessment hearing. As a judge alone trial, so the argument goes, the separation in time of several months between the two phases of the trial, is subject only to that judge’s availability, and the availability of witnesses and counsel.
[44] What are the disadvantages of bifurcation?
[45] Only the successful party in the liability determination stands to gain by being released after the liability finding. There is no saving of time or expense to the court or the remaining parties, since the court will still need to hear complex medical evidence in the second stage of the trial.
[46] There is a potential that bifurcation will cause the plaintiff and remaining defendant to spend more total time in court than they might in a single trial of all issues. It will certainly mean that the same civilian witnesses for the plaintiff will be required to testify at hearings as to liability and as to damages, with attendant costs and inconvenience to the plaintiff. It is likely that they will need to give some of the same evidence in the damages hearing as they gave in the liability hearing.
[47] The defendants will not bear these disadvantages as their witnesses testifying in relation to liability are unlikely to have information that is relevant to damages.
[48] Examination of the plaintiff and her civilian witnesses would be artificially cut off if there was to be a bifurcation of the issues. How the metal was projected into the vehicle is the only issue relevant to the liability question as framed by the defendants. The plaintiff’s physical response to that event would go to the factual basis on which the medical opinions would rest. So, conceptually, the evidence of what occurred after the object entered plaintiff’s vehicle would be inadmissible on the liability question.
[49] I do not accept that the examination of witnesses can, or should be so precisely defined in this case. To do so would, I believe, unreasonably restrict the ability of counsel for each of the parties to demonstrate the credibility, or lack thereof, of the plaintiff and her witnesses. It would limit the opportunity for the judge to assess the witnesses.
[50] The cause of action will be 10.5 years old by the time it gets to trial. The defendant Naugler has, as is his right, aggressively defended the matter throughout. Discoveries, obtaining of expert opinions, the summary judgment application and objections to the setting of a trial date served to extend this matter.
[51] A product of these various pretrial proceedings was the recognition by the plaintiff that ING should be named as a party which she did, over three years ago and 2.5 years before the Date Assignment Conference. By all appearances the plaintiff has, for her part, diligently moved the litigation forward.
[52] Because of the lengthy time requirements for trial and the court’s own schedule of availability, the DAC judge presiding was only able to offer the required 15 days some two years after the DAC. Anything that might have the effect of putting the 2011 trial date in jeopardy must be avoided or risk a further lengthy delay in obtaining trial dates.
[53] The trial of the liability issue would seem to involve the evidence of four witnesses in the plaintiff’s vehicle and that of the defendant Naugler. I have been referred to the expert opinion reports of three persons that speak to the source of the metal object. It may be unduly optimistic to conclude that a trial will only take two days including submissions and decision. The plaintiff’s counsel opines that it will take at least four days and I am inclined to agree. It is not possible at this point to assess when the presiding judge could render a decision on that portion of the trial. A longer liability hearing risks pushing the damages assessment part of the proceeding to a later date.
[54] There is a risk of appeal by the unsuccessful defendant on the liability phase. Neither defendant has undertaken not to appeal, nor would I have expected them to. If an appeal takes place it will inevitably put the November 2011 trial dates at risk and it could delay the plaintiff’s case even further.
[55] The risk of such an appeal, creates a potential that the plaintiff will be required to respond to an increased number of court proceedings with attendant costs. This is a problem that stands in addition to that of delay. This is particularly of concern given the substantial costs already generated by the litigation of this claim and the apparently meagre resources of the plaintiff.
[56] The defendants have refrained from obtaining the desired IMEs of the plaintiff, wanting to have them conducted only after the liability question is resolved. Such an approach only serves to increase the jeopardy to the established trial date, whether the IMEs are obtained after a liability finding on trial, or after appeal as to the liability determination.
[57] The defendants should have identified the bifurcation of liability and damages issues well before the DAC. Had they done so, the motion could have been resolved and a comprehensive timetable set to allow for the trial, whether in two stages or in one. By waiting for 3 months after the DAC to bring the motion for bifurcation, the defendants created a contingency that the DAC did not allow for.
[58] While not determinative of the issue, it is worth noting that while the defendants confirmed the availability of time slots for the hearing of the liability question at times well in advance of the November 2011 trial date, they did not inquire as to the availability of the trial judge assigned to the trial, for those earlier dates. I do not have evidence that the existing commitments of the appointed trial judge would permit the schedule hoped for by the defendants. The DAC would normally have addressed such a concern.
[59] The defendants’ concerns over the costs of defending in a situation where one is almost certainly going to be successful in defending the claim is somewhat mitigated by the availability of trial strategies that advance their common interest. For example, their reply to the damages claim could be conducted cooperatively to mitigate the cost. They may not feel the need to each call expert medical evidence.
[60] Whether they cooperate or not, costs of the successful defendant that are incurred in a single trial on liability and damages would likely be addressed by the unsuccessful defendant. Alternatively, they could fall on the plaintiff if there was no finding of liability against both defendants.
Conclusion
[61] In summary, the proposed bifurcation offers limited or no advantages but significant possible adverse consequences to ensuring that this case is resolved in a just, speedy and inexpensive manner, having regard to the interests of all participants.
[62] There is little prospect of the liability hearing bringing a conclusion to the case.
[63] To the extent that anyone benefits by separating out the issues of liability and damages, it is only the defendant who succeeds on the liability issue who may avoid participation in the lengthier damages hearing, but that success may be qualified. Appeals of the liability finding may increase the costs and time delay. The successful defendant after a single trial of all issues stands to gain an award of costs to offset some of the negative consequences to them of having to participate through the trial of both issues.
[64] Bifurcation would negatively impact on the just determination of the case by artificially breaking up the narrative of the evidence. It would require plaintiff and her witnesses to testify twice, months apart, with some overlap of evidence being inevitable. Costs to the plaintiff would be increased unreasonably.
[65] Further delays are a predictable consequence if bifurcation is ordered. Since over 10 years will have passed between the accident and the established trial date, nothing should be done that could jeopardize that date. Bifurcation presents just such a risk.
[66] On balance I have concluded that the benefits of separating the issues of liability and of damages into two separate hearings do not outweigh the advantage of leaving them joined. As a result, the motion is dismissed. If the parties are unable to agree on costs, then I will receive their written submissions.
Duncan J.