



COURT OF APPEAL FOR ONTARIO

CITATION: Dams v. TD Home and Auto Insurance Company, 2016 ONCA 4

DATE: 20160106

DOCKET: C59717

Blair, Hourigan and Brown JJ.A.

BETWEEN

Wolfgang Dams and Tammy Dams

Plaintiffs (Respondents/Appellants by way of cross-appeal)

and

TD Home and Auto Insurance Company

Defendant (Appellant/Respondent by way of cross-appeal)

Dwain C. Burns, for the appellant/respondent on
    cross-appeal

Matthew A. Caldwell and Christopher J. Haber, for the
    respondents/appellants on cross-appeal

Heard: October 29, 2015

On appeal from the judgment of Justice James W. Sloan of
    the Superior Court of Justice, dated November 13, 2014.

Brown J.A.:

Overview

[1]

On July 26, 2009, the respondent, Wolfgang Dams, and his friend,
    Gary Black, were riding their motorcycles along Old Bronte Road in Oakville,
    Ontario. Mr. Dams stopped his motorcycle at the intersection of Old Bronte Road
    and Bronte Road  a four-lane divided highway  preparing to make a right-hand
    turn onto Bronte Road. Mr. Black stopped his bike behind that of Mr. Dams.

[2]

According to Mr. Dams, he looked to his left and saw a cube van
    approaching in the northbound passing lane about 100 yards to the south and a
    red vehicle in the curb lane much further to the south. He turned his bikes
    front wheel slightly to the right and began to pull out very slowly. When he
    took a further glance to the left, he saw a dark vehicle approaching in the
    curb lane which would have hit him had he proceeded onto Bronte Road. Mr. Dams
    braked, but the angle of his front wheel, combined with his slight forward
    momentum, caused his bike to fall on him. He suffered an ankle injury.

[3]

At the time of the accident, Mr. Dams was insured under an automobile
    insurance policy issued by the appellant, TD Home and Auto Insurance Company
    (TD Home). In October 2009, Mr. Dams applied to TD Home for certain accident
    benefits, which he received. Then, in May 2010, Mr. Dams commenced a tort
    action against TD Home seeking damages under the Uninsured Automobile Coverage
    provisions of his policy.

[4]

At trial, TD Home argued that Mr. Dams was prohibited from
    bringing his action because he had failed to comply with certain reporting
    provisions in his policy. The trial judge rejected that defence and granted Mr.
    Dams relief from forfeiture in respect of his non-compliance. The trial judge
    assessed liability by allocating 60% of the responsibility for the accident
    against Mr. Dams and 40% against the driver of the unidentified vehicle.

[5]

TD Home appeals from both findings. It submits that the trial
    judge erred in granting Mr. Dams relief from forfeiture. It also appeals from
    the apportionment of liability, contending that the trial judge erred in
    finding negligence on the part of the unidentified driver. Mr. Dams
    cross-appeals on the issue of liability, arguing that the trial judge erred in
    finding any liability against him.

[6]

For the reasons set out below, I would dismiss the appeal and
    cross-appeal. The trial judge possessed the jurisdiction under s. 129 of the
Insurance
    Act,

R.S.O. 1990, c. I.8,
to grant Mr. Dams relief
    from forfeiture related to his failure to comply in a timely fashion with
    certain reporting requirements concerning uninsured automobile coverage. On the
    issue of liability, it was open to the trial judge on the evidence before him
    to make the findings he did, and to apportion liability accordingly.

First Issue: Did the Trial Judge Err in
    Granting Relief from Forfeiture?

The Issue Stated

[7]

There is no dispute that Mr. Dams failed to
    comply with two reporting requirements prescribed by the statutory regime for
    accidents involving unidentified automobiles. Section 3 of the Schedule
    attached to the
Uninsured Automobile Coverage
regulation, R.R.O. 1990, Reg. 676 (the Schedule) made under the
Insurance
    Act
, imposes several obligations on a person insured under a contract of
    insurance who claims that an unidentified automobile has caused that person bodily
    harm or injury. Two of those obligations are that:


(i)

the person must report the accident to a police
    officer within 24 hours after it occurs or as soon as is practicable after that
    time: s. 3(2); and


(ii)

the person must give the insurer a written
    statement within 30 days after the accident occurs or as soon as is practicable
    after that date setting out the details of the accident: s. 3(3).

Both obligations are also set out in
    s. 5.3.5 of the Ontario Automobile Policy (O.A.P. 1).

[8]

Section 8(1) of the Schedule states that [n]o
    person is entitled to bring an action to recover an amount provided for under
    the contract, as required by subsection 265(1) of the Act, unless the
    requirements of this Schedule with respect to the claim have been complied
    with. Section 5.9 of O.A.P. 1 reproduces the substance of s. 8(1).

[9]

Mr. Dams did not notify TD Home about the
    accident until October 14, 2009, some 2.5 months after the accident. Based on
    the information it received, TD Home treated the matter as an accidents
    benefits case and did not conduct any investigation.

[10]

The trial judge found that Mr. Dams had no idea
    that he could bring an action for his pain and suffering until he had a chance
    meeting with a lawyer in February 2010. He thereupon tried to file a report
    with the police, but the police essentially told him it would be no use at that
    point of time. Mr. Dams then sent a statutory declaration to TD Home, some six
    months after the accident.

[11]

Although Mr. Dams failed to comply with the
    police report and accident statement information requirements within the times
    stipulated by the Schedule, he sought relief from forfeiture of unidentified
    automobile coverage under s. 129 of the
Insurance Act
and s. 98 of the
Courts of Justice Ac
t, R.S.O. 1990, c. C.43. Those sections provide:

Insurance Act

s. 129. Where there has been
    imperfect compliance with a statutory condition as to the proof of loss to be
    given by the insured or other matter or thing required to be done or omitted by
    the insured with respect to the loss and a consequent forfeiture or avoidance
    of the insurance in whole or in part and the court considers it inequitable
    that the insurance should be forfeited or avoided on that ground, the court may
    relieve against the forfeiture or avoidance on such terms as it considers just.

Courts of Justice Act

s. 98. A court may grant relief
    against penalties and forfeitures, on such terms as to compensation or
    otherwise as are considered just.

[12]

The trial judge granted Mr. Dams relief from
    forfeiture.

Positions of the Parties

[13]

TD Home submits that the trial judge erred in
    granting Mr. Dams relief from forfeiture. Coverage for damages caused by
    unidentified automobiles is subject to the terms, conditions, provisions,
    exclusions and limits as are prescribed by the regulations:
Insurance Act
,
    s. 265(1). TD Home argues that the two reporting requirements contained in s. 3
    of the Schedule are preconditions to being able to commence an action for
    unidentified coverage, as stated by s. 8(1) of the Schedule and s. 5.9 of
    O.A.P. 1. TD Home contends that relief from forfeiture for Mr. Dams is not
    available under s. 129 of the
Insurance Act
or s. 98 of the
Courts
    of Justice Act
because those provisions can only relieve from imperfect
    compliance with a policy term, not from non-compliance with conditions
    precedent to a claim, such as those contained in s. 3 of the Regulation.

[14]

Mr. Dams submits that relief under s. 129 of the
Insurance Act
or s. 98 of the
Courts of Justice Act
is
    available in the circumstances of this case because the case law has treated
    the failure to give timely notice of a claim as imperfect compliance with a
    term of a policy, not a condition precedent to a claim. Further, Mr. Dams
    provided a reasonable explanation for his failure to comply promptly with the
    reporting requirements, and the trial judge found that TD Home did not suffer
    any prejudice as a result of those delays.

Analysis

[15]

The starting point for the analysis is the
    decision of the Supreme Court of Canada in
Falk Bros. Industries Ltd. v.
    Elance Steel Fabricating Co.
, [1989] 2 S.C.R. 778. In that case, Elance
    Steel Fabricating Co. claimed against a surety company under a bond on account
    of a debt due from Falk Bros. Elance gave notice of its claim 28 days after the
    expiry of the notice period specified in the bond. The case required the
    Supreme Court to interpret a section in
The Saskatchewan Insurance Act
,
    R.S.S. 1978, c. S-26, identical in language to s. 129 of the
Ontario
    Insurance Act
.

[16]

The Supreme Court observed, at p. 782, that
    sections like s. 129 are remedial in nature and as such should be given an
    appropriately broad interpretation. The purpose of allowing relief from
    forfeiture in insurance cases is to prevent hardship to beneficiaries where
    there has been a failure to comply with a condition for receipt of insurance
    proceeds and where leniency in respect of strict compliance with the condition
    will not result in prejudice to the insurer: at p. 783. However, the courts
    power under provisions like s. 129 only extends to cases of such statutory
    conditions as to proof of loss or other matters or things that are required to
    be done or omitted with respect to the loss: at p. 786.

[17]

The court then addressed the question of whether
    the failure to give notice of a claim under an insurance policy amounted to
    imperfect compliance with a statutory condition as to the proof of loss, in
    which case relief under the statutory provision would be available, or whether
    it was non-compliance or breach of a condition precedent, in which case there
    could be no relief. It concluded, at pp. 785-786, that the failure to give
    notice of a claim in a timely fashion constitutes imperfect compliance with a
    statutory condition as to the proof of loss and falls within the terms of the
    relief provision. By contrast, the failure to institute an action within the
    prescribed time period would be a more serious breach, akin to non-compliance. Because
    Elances failure to give notice of its claim within the prescribed time
    constituted imperfect compliance rather than non-compliance, Elance was
    eligible to claim relief from forfeiture.

[18]

In the years following
Falk Bros.
, this
    court has re-affirmed on several occasions that the discretion possessed by a
    court under s. 129 of the
Insurance Act
is limited only to those
    policy conditions  statutory or contractual  that relate to proof of loss:
Williams
    v. York Fire & Casualty Insurance Co.
, 2007 ONCA 479, 86 O.R. (3d)
    241, at para. 33;
Kozel v. The Personal Insurance Company
, 2014 ONCA
    130, 119 O.R. (3d) 55, at para. 35. The courts power under s. 129 concerns
    things or matters required to be done in relation to the loss  i.e. to
    instances of imperfect compliance with the terms of a policy after a loss has
    occurred:
Williams
, at para. 33;
Kozel
, at para. 58.

[19]

TD Home argues that the reporting requirements
    contained in s. 3 of the Regulation are akin to conditions precedent in the
    nature of limitation periods, because s. 8(1) of the Regulation provides that
    no person can bring an action to recover an amount under the contract of
    insurance unless the requirements of this Schedule with respect to the claim
    have been complied with.

[20]

I am not persuaded by this argument, for two
    reasons.  First, the decision of the Supreme Court in
Falk Bros.
stands squarely against it. The reporting requirements contained in s. 3 of the
    Schedule are functionally similar to the notice of claim requirement at issue
    in
Falk Bros.
Both operate with the view of providing the insurer with
    timely information about the loss so that it can investigate the matter, if it
    so choses. The nature of Mr. Damss failure to comply in the present case
    clearly falls within the class of cases covered by the statutory language in s.
    129  i.e. a statutory condition as to the proof of loss to be given to the
    insured or other matter or thing required to be done omitted by the insured
    with respect to the loss.
[1]

[21]

Second, to assess the effect of s. 8(1) of the
    Schedule on the availability of relief under s. 129 of the
Insurance Act,
the Schedule must be read in its entirety. Section 8(1) applies to all the
    requirements of the Schedule concerning uninsured automobile coverage. In
    addition to the reporting requirements imposed by s. 3, the Schedule also
    requires a person entitled to make a claim to give notice of the claim and to
    provide a proof of claim: s. 6. To accept the interpretation of s. 8(1)
    advanced by TD Home would result in that section of the Schedule precluding
    relief from forfeiture for imperfect compliance with the obligation to provide
    a proof of loss, a matter for which s. 129 specifically affords relief from
    forfeiture. Such an interpretation of the Schedule would run counter to the
    very purpose of the statutory provision. In my view, such an untenable
    interpretation signals that s. 8(1) of the Schedule does not transform all the
    requirements imposed on a claimant by the Schedule into conditions precedent to
    a claim for which relief from forfeiture is not available. Instead, s. 8(1)
    must be read in the light of s. 129 of the
Insurance Act
and the principles
    set down by the Supreme Court in the
Falk Bros.
case. When so read,
    relief from forfeiture under s. 129 of the
Insurance Act
is available
    where a claimant has failed to meet the time periods for the reporting
    requirements set out in s. 3 of the Schedule.

[22]

Consequently, the trial judge did not err in
    holding that Mr. Dams was entitled to claim relief from forfeiture under s. 129
    of the
Insurance Act
in respect of his failure to make a report to the
    police and to provide an accident statement to TD Home within the times
    stipulated by s. 3 of the Schedule. Since TD Home limited its argument to the
    jurisdiction of the trial judge to grant relief from forfeiture and did not
    contend that the trial judge had failed to look at all relevant factors when
    considering whether to grant relief from forfeiture, the conclusion that the
    trial judge could grant relief from forfeiture under s. 129 disposes of this
    part of the appeal.

Second Issue: Did the Trial Judge Err in his
    Apportionment of Liability for the Accident?

The Positions of the Parties

[23]

TD Home submits that the trial judge erred in
    apportioning any liability against the unidentified driver because there was no
    evidence of any negligence on the part of the unidentified driver. TD Home
    argued that the unidentified driver was proceeding lawfully northbound on
    Bronte Road; it had the right of way as it approached the uncontrolled
    intersection of Old Bronte Road and Bronte Road; there was no evidence that it
    failed to keep a proper lookout as it approached the intersection; it was
    entitled to move into the curb lane; and there was no evidence that it was
    making a passing manoeuvre in the curb lane as it approached the intersection.

[24]

Mr. Dams submits that the trial judge erred in
    apportioning any liability against him because the unidentified driver was the
    sole cause of the accident: the dark vehicle was speeding when it was passing
    the cube van in the curb lane; and the unidentified driver failed to yield the
    right of way to Mr. Dams by quickly moving into the curb lane just as Mr. Dams
    was planning lawfully to enter Bronte Road.

Analysis

[25]

Several rules of the road were in play when Mr.
    Dams stopped his motorcycle before entering onto Bronte Road from Old Bronte
    Road and as the unidentified driver approached that intersection.

[26]

Mr. Dams was required to stop his motorcycle at
    the marked stop line on Old Bronte Road and yield the right of way to traffic
    approaching the intersection on another highway so closely that to proceed
    would constitute an immediate hazard:
Highway Traffic Act
, R.S.O.
    1990, c. H.8 (
HTA
), s. 136(1). Having so
    yielded the right of way, Mr. Dams was entitled to proceed onto Bronte Road:
HTA
,
    s. 136(1)(b).

[27]

Although the unidentified driver who was
    proceeding northbound on Bronte Road had the right of way over Mr. Dams as he
    approached the intersection, the unidentified driver was subject to several
    obligations:


(i)

The driver was not entitled to drive his vehicle
    from the passing lane to the curb lane unless

the driver first ascertains
    that it can be done safely:
HTA
, s. 154(1)(a);


(ii)

The driver was entitled to overtake and pass to the
    right of the cube vehicle which was in the passing lane 
only where the movement can be made in safety:
HTA
, s.
    150(1);


(iii)

The driver was required to obey the posted speed
    limit of 60 km/hour:
HTA
, s. 128; and


(iv)

When approaching the intersection, the driver was
    required to maintain a proper look-out and proceed with such care and prudence
    through the intersection as appropriate in the particular circumstances:
Fiddler
    v. Vasilakos
, 2014 ONSC 5774, at para. 28;
Hynna v. Peck
, 2009
    BCSC 1057, at para. 81.

[28]

TD Home submits there was no evidence before the
    trial judge which would entitle him to find that the unidentified driver was
    negligent when approaching the intersection. Mr. Dams contends that there was
    no evidence to support a finding that he was negligent when he slowly moved
    forward from the stop sign towards Bronte Road.

[29]

I do not accept either submission.

[30]

In respect of the unidentified driver, the trial
    judge made several findings of fact:


(i)

As the unidentified driver approached the
    intersection, the driver would have had a plain view of the motorcycle which
    was moving forward;


(ii)

Although the unidentified driver had the right
    of way to change lanes into the curb lane, the driver should have proceeded
    with the utmost caution for two reasons: (a) the driver would have seen the two
    motorcycles, one of which was creeping forward; and (b) in the area just north
    of the intersection, several residential driveways exited onto Bronte Road; and


(iii)

The utmost caution the driver should have
    exercised included reducing the speed of the vehicle or moving back into the
    passing lane until it passed the motorcycles.

On the evidence before the trial judge,
    including the opinion evidence of the expert accident reconstruction expert,
    those findings were open to the trial judge to make.

[31]

Although Mr. Dams testified that when he first
    looked to his left to check the approaching traffic he had not seen the dark
    vehicle following the cube van in the passing lane, the trial judge did not
    accept his evidence. The trial judge accepted the evidence of Mr. Black that
    when he was stopped at the stop sign, he could see the dark vehicle come from
    behind the cube van in the passing line. The trial judge also accepted the
    evidence of the accident reconstruction expert that even under the worst
    visibility circumstances, part of the dark vehicle would have been visible to
    Mr. Dams. From that evidence, the trial judge found that Mr. Dams should have
    seen at least part of the dark vehicle as it followed the cube van in the
    passing lane and before it moved into the curb lane. It was open to the trial
    judge to make those findings on the evidence before him.

[32]

Those findings by the trial judge of negligence
    on the part of both the unidentified driver and Mr. Dams entitled him to
    apportion liability for the accident. The trial judge described the case as a
    difficult one to assess. Nevertheless, in light of the careful findings of fact
    which he made, I see nothing unreasonable in the trial judges allocation of
    60% liability to Mr. Dams given that s. 136(1)(b) of the
Highway Traffic
    Act
required him to yield the right of way to the dark vehicle which, in
    the circumstances, constituted an immediate hazard approaching the
    intersection. I see no basis for appellate interference in the trial judges
    allocation of liability between the parties.

Disposition

[33]

For the reasons set out above, I would dismiss
    the appeal and cross-appeal.

[34]

The parties agreed that the successful party
    would be entitled to costs of the appeal in the amount of $10,000. Since the
    respondents enjoyed the greater success on the appeal, I would award them their
    costs of the appeal in the amount of $10,000, inclusive of HST and
    disbursements.

Released: January 6, 2016 (RAB)                           David
    Brown J.A.

I
    agree R.A. Blair J.A

I
    agree C.W. Hourigan J.A.





[1]
The type of policy in issue can affect how a court treats the breach of a
    reporting requirement.  For example, in
Stuart v. Hutchins
(1998), 40
    O.R. (3d) 321 (C.A.), this court held that relief from forfeiture under s. 129
    of the
Insurance Act
was not available for a failure to report a claim
    where the policy of insurance was a claims made and reported policy, not an
    occurrence policy.  See also,
Kozel
, at para. 44.


