



COURT OF APPEAL FOR ONTARIO

CITATION: Hengeveld v. The Personal Insurance Company, 2019
    ONCA 497

DATE: 20190617

DOCKET: C65834

Hoy A.C.J.O., Lauwers and Zarnett JJ.A.

BETWEEN

Ryan Hengeveld, Susan
    Hengeveld, Matthew Hengeveld, a minor by his litigation guardian, Susan
    Hengeveld, Benjamin Hengeveld, a minor by his litigation guardian, Susan
    Hengeveld, Erin Hengeveld, a minor by her litigation guardian, Susan Hengeveld,
    Andrew Hengeveld, a minor by his litigation guardian, Susan Hengeveld, Bernard
    Hengeveld and Lutsche Bakker, plaintiffs

Plaintiffs

and

The Personal Insurance Company

Defendant
    (Appellant)

and

James
    Dallyn Virtue and Rasha Mohamed Said El-Tawil

Third Parties (Respondents)

Sandra G. Zilli and Sachin Kumar, for the appellant

David B. Williams and Jennifer P. Butkus, for the
    respondents

Heard: May 10, 2019

On appeal from the judgment of Justice Michael D.
    McArthur of the Superior Court of Justice, dated August 2, 2018, with reasons
    reported at 2018 ONSC 4712.

Zarnett J.A.:

Introduction

[1]

Individuals
    pursuing a lawsuit learn that evidence that might assist in proving their case
    has been destroyed. They start a second lawsuit against the insurance company
    they say should have preserved the evidence. The company alleges that any
    failure to preserve evidence is the result of faulty arrangements made by the
    plaintiffs lawyers. May the company bring third party proceedings for
    contribution and indemnity against the plaintiffs lawyers? That is the issue
    raised on this appeal.

[2]

The
    plaintiffs, Ryan Hengeveld and his family, sued the appellant The Personal
    Insurance Company for failing to preserve the car that Mr. Hengeveld was
    driving when he was seriously injured in a motor vehicle accident. They allege
    this might impair their ability to prove their case in a separate personal
    injury action against those the Hengevelds allege caused the accident and
    injuries.

[3]

In response to the Hengevelds action against it Personal
    Insurance brought third party proceedings for contribution and indemnity against
    the Hengevelds lawyers,
the respondents Mr. Virtue and Ms. El-Tawil,
    alleging they breached their duty to the Hengevelds to see that evidence
    necessary for their personal injury action was preserved.

[4]

The lawyers moved successfully to strike out the
    third party claim on the basis that it disclosed no reasonable cause of action.

The motion judge held that because the allegations
    in the third party claim related to conduct falling within the scope of the lawyers
    retainer by the Hengevelds, it was conduct that was attributable in law to the Hengevelds.
[1]
The lawyers alleged
    negligence could therefore be raised by Personal Insurance in its defence to
    the Hengevelds claim. The third party claim was unnecessary.

[5]

Personal Insurance appeals. In my view the
    motion judge correctly concluded that the third party claim should be struck.
    Accordingly, I would dismiss the appeal.

The Facts

[6]

The plaintiff Ryan Hengeveld was injured in a
    motor vehicle accident on January 27, 2014, while he was operating a Hyundai
    automobile insured by Personal Insurance.

[7]

Mr. Hengeveld and his spouse, children and
    parents retained the respondent lawyers to act for them in connection with
    their damages arising out of the accident.

[8]

On January 6, 2016, the Hengevelds commenced the
    personal injury action for damages as a result of the injuries Mr. Hengeveld
    suffered in the accident. Personal Insurance is not a party to that action. The
    defendants to the personal injury action are the owner and operator of the
    other vehicle involved in the accident, the persons alleged to have been
    responsible for the safety and condition of the road where the accident
    occurred, the manufacturer of the Hyundai, and the dealership at which it was
    purchased.

[9]

On October 20, 2017, the Hengevelds commenced this
    action against Personal Insurance  the action out of which the third party
    claim and this appeal arise. The thrust of the Hengevelds claim is that Personal
    Insurance agreed, in 2014, to preserve the Hyundai in safe storage knowing it
    would be important to the resolution of liability issues in the personal injury
    action, but failed to do so. The Hengevelds allege that Personal Insurance
    disposed of the Hyundai, in breach of contract and/or negligently. They allege that
    this may impair their ability to prove liability against one or more of the defendants
    in the personal injury action.

[10]

Personal Insurance defended. Its statement of defence asserts that, as
    insurer of the Hyundai, it fully indemnified the Hengevelds for the damage to
    the vehicle. In exchange, Personal Insurance became the owner of the Hyundai and
    was entitled to dispose of it for salvage. It denies that it had any obligation
    to preserve the Hyundai for any longer than it actually did, and states that
    it was the [Hengevelds] responsibility to secure and ensure the preservation
    of the vehicle as they intended to rely on it as evidence in [the personal
    injury action]. The statement of defence alleges that the Hengevelds were
    negligent in failing to ensure the preservation of the Hyundai, failing to make
    adequate inquiries of Personal Insurance to confirm whether the Hyundai was
    being preserved, failing to make a valid contract with Personal Insurance for
    preservation of the Hyundai, and failing to send an expert to inspect the
    Hyundai in a timely manner, among other things. It is alleged that this caused
    or contributed to the Hengevelds damages; Personal Insurance pleads and relies
    upon the
Negligence

Act
,

R.S.O.
    1990, c. N.1.

[11]

Personal Insurance then issued its third party claim against the lawyers.
    It claims contribution and indemnity from the lawyers for any amounts it must
    pay the Hengevelds.

[12]

The third party claim incorporates by reference Personal Insurances
    statement of defence, including the pleading of the
Negligence

Act
, and alleges that the lawyers were retained
    by the Hengevelds following the January 2014 accident to pursue the damages
    arising out of it, and that retainer included securing and preserving the
    evidence required to pursue the Hengevelds claims. It was the lawyers who
    contacted Personal Insurance in February 2014 about preserving the Hyundai, advising
    it that they had been retained by the Hengevelds; Personal Insurance told the lawyers
    where the Hyundai was so that it could be inspected, and the lawyers arranged
    an inspection in March 2014, but then secured no promises from Personal
    Insurance to keep the Hyundai. They also failed to arrange either to take possession
    of it themselves or for further inspection. Personal Insurance, having made no
    promises to preserve the Hyundai, sold it for salvage shortly after; it heard from
    the lawyers that they wanted another inspection some 19 months after the first
    inspection.

[13]

The third party claim states that if Personal Insurance is found liable
    to the Hengevelds, the lawyers are liable for contribution and indemnity
    because they breached their duties to the Hengevelds as the Hengevelds lawyers.
    The particulars of the lawyers alleged negligence include failing to take
    adequate steps to ensure preservation of the Hyundai; failing to cause it to be
    inspected by an engineer or other expert in a timely way; and failing to
    communicate adequately with, make proper inquiries of, or establish a proper
    contract with Personal Insurance about the preservation of the Hyundai. The
    particulars of negligence asserted against the lawyers in the third party claim
    overlap significantly with the particulars of the Hengevelds negligence
    asserted in the statement of defence.

The Motion Judges Decision

[14]

The lawyers moved successfully under Rule 21.01(1)(b) of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194, to strike out
    the third party claim as disclosing no reasonable cause of action.
[2]
The motion judge described the
    test for striking out a claim under that rule as whether it was plain and
    obvious that the third party claim was certain to fail, assuming the facts alleged
    in it to be true. He noted that this was not a case where Personal Insurance
    and the lawyers were both involved in the initial loss (by which he appears to
    have meant the motor vehicle accident of January 2014 that is the subject of
    the personal injury action). He held that, because the negligent acts and
    omissions alleged against the lawyers fell within the scope of their agency on
    behalf of the Hengevelds, they were not the proper subject of a third party
    claim: the Hengevelds would be responsible for anything done or not done by
    their lawyers acting as their agents. He stated, at para. 24:

In such situations where the plaintiff is
    responsible, Third Party Claims are unnecessary since the defendant could plead
    those matters in defence and, if the plaintiff was found at fault, damages
    would be reduced. Any neglect on part of the solicitors would be attributable
    to the plaintiff and make a third party proceeding unnecessary.

The
    Appellants Position

[15]

Personal Insurance argues that the motion judge erred in treating
    the initial loss as the January 2014 motor vehicle accident, and therefore in
    approaching the matter on the basis that Personal Insurance and the lawyers were
    not involved in the initial loss. Both Personal Insurance and the lawyers were
    involved in the loss complained of in the Hengevelds action against Personal
    Insurance, namely the disposal of the Hyundai and whatever detrimental effect
    that may have on the Hengevelds claim in the personal injury action. Personal
    Insurance submits that this is the relevant initial loss. Since its third
    party claim is not about the lawyers failure to assist the Hengevelds in
    mitigating their damages, this courts decision in
478649 Ontario
    Ltd. v. Corcoran
(1994),

20 O.R. (3d) 28, should have been applied for the proposition that, where
    the plaintiffs lawyer and the defendant are both involved in the initial loss
    (that is, where it is alleged they each caused or contributed to the plaintiffs
    initial loss) a defendant may take third party proceedings against the lawyer.

[16]

Personal Insurance also argues that the cause of action underlying
    the Hengevelds claim against it is spoliation. Since that is a novel cause of
    action, matters related to it are not amenable to disposition on an r. 21
    motion.

Analysis

[17]

In my view, the resolution of the issue on this appeal does not turn
    upon what constitutes the initial loss. It turns upon whether the negligence
    alleged against the lawyers in the third party claim is attributable to the Hengevelds
    as plaintiffs. I begin by explaining why attributing the fault of a third party
    to a plaintiff matters to whether there is a cause of action by a defendant against
    that third party. I then discuss two situations in which the negligence of a plaintiffs
    lawyer is attributable to the plaintiff. Finally, I discuss how those
    principles apply in this case.

(1)

Where Negligence of a Third Party is
    Attributable to the Plaintiff No Cause of Action for Contribution and Indemnity
    Exists Against That Third Party

[18]

Rule 29.01(a) permits a defendant to commence a third party claim
    against any person not already a party to the action who is or may be liable
    to the defendant for all or part of the plaintiffs claim.

[19]

A third party claim, like any action, must have a substantive
    component  it must assert a cause of action. Here the third party claim does
    not rely on any duty allegedly owed by the lawyers to Personal Insurance. It relies
    on the contribution and indemnity provisions of the
Negligence Act

(ss. 1, 2 and 5) to claim that the lawyers should be
    liable to Personal Insurance for all or part of the Hengevelds claim. But Personal
    Insurance also relies on the contributory negligence provision of the
Negligence
    Act

(s. 3) to assert that the Hengevelds themselves
    are responsible for all or part of their own claimed damages. The interaction
    of those provisions is therefore important.

[20]

The
Negligence Act

provides, in s.
    1, that where damages have been caused or contributed to by the fault or
    neglect of two or more persons, each is jointly and severally liable to the
    plaintiff who has suffered those damages, but as between themselves each is
    liable to make contribution and indemnify each other in the degree in which they
    are respectively found to be at fault or negligent. Section 2 permits a
    defendant who has settled with the plaintiff for more than its proportionate
    share of the plaintiffs damages to make a claim for contribution and indemnity
    against another person 
who is, or would if sued have been, liable for
    those damages
. Section 5 of the Act contemplates the situation where a defendant has been sued but
    believes there is another wrongdoer who caused or contributed to the plaintiffs
    injury and has not yet been sued. It allows a defendant to pursue a right of
    contribution and indemnity against that person by third party claim, according
    to the rules of court for adding third parties.

[21]

A third party claim based on the contribution and indemnity
    provisions of the
Negligence Act
does not
    require that the third party owe a duty of care to the defendant. It is
    sufficient that the third party owe a duty of care to the plaintiff, making the
    third party someone who, if sued by the plaintiff, would have been liable in
    respect of the damage the plaintiff suffered:
Corcoran
,
at pp. 35-36.

[22]

The contribution and indemnity provisions of the
Negligence
    Act
must be understood in light of the purpose they
    serve. As a general rule a wrongdoer who caused or contributed to a plaintiffs
    injury is liable to compensate that plaintiff in full, even if another
    wrongdoer caused or contributed to the plaintiffs injury:
Athey v.
    Leonati
,

[1996]
    3 S.C.R. 458, at para. 22. The contribution and indemnity provisions allow a
    wrongdoer not solely at fault but at risk of being held liable for 100% of the
    plaintiffs injury to recover indemnity from another wrongdoer to the extent of
    the latters relative degree of fault:
Endean v. St. Josephs General
    Hospital
, 2019 ONCA 181, at para. 48.

[23]

However, a plaintiffs own contributory negligence will reduce its
    claim for damages against a defendant. Section 3 of the
Negligence
    Act
provides:

In any action for damages that is founded upon
    the fault or negligence of the defendant if fault or negligence is found on the
    part of the plaintiff that contributed to the damages, the court shall
    apportion the damages in proportion to the degree of fault or negligence found
    against the parties respectively.

[24]

Accordingly, under the
Negligence Act
s

contributory negligence
    provision, a defendant may raise fault or negligence
on the part of the
    plaintiff
that caused or contributed to the plaintiffs damages as a
    defence. If successful, the plaintiffs claim against the defendant will be
    reduced according to the plaintiffs relative degree of fault. Under the
Negligence

Act
s
contribution and indemnity provisions, a defendant
    may raise
a third partys
fault or negligence that caused or contributed
    to the plaintiffs damages as a third party claim. If successful, the defendant
    will remain 100% liable to the plaintiff but may obtain indemnity from the
    third party according to the third partys relative degree of fault.

[25]

But a defendant may not double dip.
Where the fault or neglect which a defendant argues caused or
    contributed to the plaintiffs injury is fault or neglect that will reduce the plaintiffs
    claim, there is no risk that a defendant will have to pay 100% of the
    plaintiffs loss notwithstanding

that
fault or neglect. The basis
    for a claim under ss. 1, 2 and 5 of the
Negligence Act
 to allow a wrongdoer to obtain indemnity for a payment to the
    plaintiff that exceeded the wrongdoers degree of fault  does not exist in such
    circumstances because of the direct reduction of the plaintiffs claim.

[26]

This principle was applied in
Taylor v. Canada (Health)
,
    2009 ONCA 487, 95 O.R. (3d) 561. In that case, a defendant to a class action sought
    to add third parties from whom the defendant wished to claim contribution on
    the basis that they may have been liable for part or all of the class members
    injuries. But in order to preclude the [defendants] attempt to assert a third-party
    claim and with the intention that [t]he possibility of third party claims
    will be obviated, the plaintiff amended her statement of claim to specifically
    plead that her claim against the defendant was limited to the defendants
    proportionate share of fault: at paras. 9-10. In the circumstances, it was
    clear that she was prepared to reduce the damages claimed by the proportion of
    fault that would be attributed to the proposed third parties.

[27]

This
    court upheld the motion judges striking of the third party claim as disclosing
    no reasonable cause of action, stating at para. 20:

[C]ontribution rights arise only where a defendant is required
    to pay more than its proportionate share of a plaintiffs damages. In the
    present case, Ms. Taylor has limited her claim and those of the class members
    to those losses attributable to [the defendants] negligence. In other words,
    she is not seeking all of her damages from [the defendant]; she seeks only the
    portion of her damages attributable to [the defendants] neglect and not the
    portion of her damages that may be attributable to the neglect of the doctor or
    the hospital. ... Because she is not seeking 100% of her damages, the full
    compensation principle articulated in
Athey v. Leonati
does not apply;
    equally, resort to s. 5 of the
Negligence Act
is unnecessary.

[28]

Taylor
was a case where the attribution to the plaintiff of the proposed
    third parties negligence came about by the plaintiffs express wish.
[3]
But the same result flows from
    attributing negligence to the plaintiff as a matter of law, since s. 3 of the
Negligence
    Act
has the same effect in respect of the attributed negligence:
    it reduces the plaintiffs claim so that the defendant is only at risk of being
    held liable for the portion of the plaintiffs damages attributable to the
    defendants negligent conduct and to the distinct negligent conduct of other
    parties (i.e. negligent conduct that is distinct from the plaintiffs negligent
    conduct). This makes contribution rights against third parties in respect of the
    negligence attributed to the plaintiff inapplicable.

[29]

Accordingly, whether a claim by a defendant seeking contribution and
    indemnity from a third party for alleged negligence that caused or contributed
    to the plaintiffs damages discloses a reasonable cause of action is a function
    of whether that negligence is attributable to the plaintiff. If it is
    attributable to the plaintiff, the defendant has no cause of action against the
    third party.

(2)

When A Plaintiffs Lawyers Negligence Will Be
    Attributed to the Plaintiff

[30]

Several decisions of this court have considered the propriety of a
    third party claim under the
Negligence

Act
where the third parties are the plaintiffs lawyers: see
Corcoran
;
Davy Estate v. CIBC World Markets Inc.
,
2009 ONCA 763,
97
    O.R. (3d) 401
; and
Macchi S.P.A. v. New Solution
    Extrusion Inc.
,
2008 ONCA 586. Those cases adopt, as their starting point, the
    decision of McLachlin J.A. (as she then was) in
Adams v. Thompson,
    Berwick, Pratt & Partners
(1987),
15 B.C.L.R. (2d) 51 (C.A.).

[31]

In
Adams
,

property developers
    sued a firm of engineers alleging that their negligence in designing a
    subdivision delayed the sale of lots. The engineers issued third party
    proceedings against the plaintiffs lawyers alleging they had breached certain
    duties to the plaintiffs which, if fulfilled, would have allowed the plaintiffs
    to reduce the delays. In deciding the third party claim should be struck,
    McLachlin J.A. stated, at pp. 55-56:

It thus may be stated with confidence, in my
    view, that a third party claim will not lie against another person with respect
    to an obligation belonging to the plaintiff which the defendant can raise
    directly against the plaintiff by way of defence. Where the only negligence
    alleged against the third party is attributable to the plaintiff, there is no
    need for third party proceedings since the defendant has his full remedy
    against the plaintiff. On the other hand, where the pleadings and the alleged
    facts raise the possibility of a claim against the third party for which the
    plaintiff may not be responsible, the third party claim should be allowed to
    stand.



Generally speaking, all acts falling within
    the scope of an agency between the proposed third party and the plaintiff fall
    into the category of acts for which the plaintiff is responsible and hence are
    not the proper subject [of] third party claims.

Another situation where a third party claim
    cannot be raised because the obligation is essentially that of the plaintiff is
    where the claim is one that the proposed third party should have advised or
    assisted the plaintiff to mitigate his damages. In that situation, like the
    situation of agency, third party proceedings are redundant because the
    defendant can obtain any relief to which he may be entitled by reduction of the
    plaintiffs claim if he makes out the defence of failure to mitigate.

[32]

McLachlin J.A. describes two situations in which a lawyers negligence
    will be attributed in law to the plaintiff.
[4]
One is where the alleged negligence is committed by the lawyer as agent for the
    plaintiff, within the scope of the agency. A second, and different, situation
    is where the lawyers alleged negligence relates to advice about the plaintiffs
    duty to mitigate a loss that has already occurred. Although both situations
    share the same result  the negligence will be attributed to the plaintiff and
    can be raised directly against the plaintiff by the defendant, making a third
    party claim redundant  it is important not to conflate them.

[33]

The bulk of the third party claim in
Adams
was found to reflect an agency situation.

The defendant engineers argued that the plaintiffs lawyers
    had been negligent in filing and amending, on the plaintiffs behalf, the
    prospectus required to qualify lots for sale. McLachlin J.A. said, at p. 57:

Insofar as the solicitors were retained to file
    and amend the prospectus and otherwise deal with others on the [plaintiffs]
    behalf, they were clearly acting as the plaintiffs agents, given that agency
    arises where one person expressly or impliedly consents that the other, the
    agent, similarly consenting, should represent him or act on his behalf. [Citations
    omitted.]

[34]

The agency situation also applied in
Macchi
.
There the plaintiff sued to recover a loan
    and added as defendants persons it said had provided inaccurate information on
    which the plaintiff had relied in registering a
financing statement,
    undermining its validity
. The defendants issued third party
    proceedings against the lawyer who made the registration, alleging that he
    failed in his duties to make proper searches and enquiries required to effect a
    proper registration. The defendants also claimed that the plaintiff was
    contributorily negligent due to those same failures.

[35]

Wilton-Siegel
    J. struck the third party claim, finding that the lawyer had acted as agent for
    the plaintiff in the registration:
Macchi

s.p.a. v. New
    Solution Extrusion Inc
.
,
2007 CanLII 48653 (Ont. Sup.
    Ct.). At para. 21, he stated:

First,
[the plaintiff]
retained [the lawyer] to act as its agent in filing a valid registration
    statement in respect of a security interest under the PPSA.
[The plaintiff]
did not cease to bear the consequences of
    any negligence on the part of [the lawyer] by engaging him as its agent to
    attend to the registration. It remained responsible for the consequences of an
    invalid registration under the PPSA even if it resulted from negligence on the
    part of [the lawyer].

[36]

This court upheld that decision, stating, at para. 1:


On the pleadings as they stand, any negligence alleged against
    the proposed third party is attributable to the plaintiff. The statement of
    claim shows that [the plaintiff] has not distanced itself from responsibility
    for, or the consequences of, any negligence on the part of its counsel.

(3)

In This Case the Lawyers Alleged Negligence Was
    Committed as Agent for the Hengevelds

[37]

In my view, the agency situation described in
Adams
is also
    present in this case. Here, the Personal Insurance pleadings make clear that
    the retainer of the lawyers included taking steps, on behalf of the Hengevelds,
    to preserve evidence, and that the lawyers dealings with Personal Insurance  what
    they did and failed to do  were dealings undertaken on the Hengevelds behalf.
    Personal Insurance specifically pleads the scope of the lawyers agency as
    embracing the lawyers alleged negligent conduct. There is no pleaded
    negligence arising from acts outside of the lawyers retainer. Personal
    Insurance itself attributes the lawyers conduct to the Hengevelds by alleging that
    the Hengevelds were negligent in making and failing to make arrangements about
    the Hyundais preservation and inspection: arrangements they allege were
    actually made by the lawyers on the Hengevelds behalves. Nor have the Hengevelds
    distanced themselves from responsibility for, or the consequences of, any
    negligence on the part of their counsel:
Macchi
(C.A.), at para. 1.

[38]

On a fair reading of the motion judges decision, he found that this
    was a situation of agency. Whether or not his comment about the initial loss
    was correct, it does not affect the result. Even if the initial loss for these
    purposes is the disposal of the Hyundai and the alleged negligence is that the respondent
    lawyers, acting as the Hengevelds agents, caused or contributed to that loss 
    the same loss that Personal Insurance allegedly caused or contributed to  that
    negligence (i) is attributable to the Hengevelds, (ii) may be raised (as it has
    been) by Personal Insurance to obtain a reduction of the Hengevelds claim, and
    (iii) cannot support a third party claim.

(4)

The Appellants Arguments Do Not Take This Case
    Outside of the Agency Situation

[39]

The arguments of Personal Insurance that it and the respondent lawyers
    were involved in the initial loss do not distinguish this case from the agency
    situation. They could only distinguish it from the second situation described in
Adams,
in which the plaintiffs lawyer is alleged to have
    provided negligent advice respecting mitigation
.
[5]


[40]

Even if Personal Insurance is right that this case does not involve
    a
claim of negligent advice resulting in a failure to mitigate
, that does not assist it. In
Adams
, McLachlin J.A. (as she then was) considered the consequence
    of an allegation of negligent mitigation advice
only
    as an alternative, on the assumption that the situation was not one of agency:
Adams
, at p. 57. This underscores the point that where there is an agency
    situation, it bars the third party claim on its own.

[41]

Davy Estate
does not stand for the
    proposition that a third party claim falling outside of the negligent
    mitigation advice category will be allowed to proceed. In
Davy
    Estate

the
    issue was whether a third party claim against the plaintiffs lawyers for
    failing to give proper advice

concerning mitigation could give rise to a
    claim for contribution and indemnity under the
Negligence

Act
. The court held that it could not. In that context, the court
    distinguished the situation where two wrongdoers are involved in causing or contributing
    to the plaintiffs initial loss from
a claim of negligent advice resulting
    in a failure to mitigate
, where the defendant who caused the
    initial loss wishes to third party the plaintiffs lawyers on the basis that
    they failed to properly advise the plaintiff to minimize the loss
after
the initial loss was incurred. The court emphasized the importance of the
    distinction, at paras. 18-19:

A plea of failure to mitigate is of an entirely different
    character. Such a plea arises after the loss has been suffered and relates to
    events or conduct unrelated to the cause of the initial loss. In my view, the
    defendant has no claim in law against the plaintiffs solicitor for advice
    given to the plaintiff as to how to mitigate the loss caused by the defendants
    own wrong.

The
Negligence

Act
does not diminish
    the amount that the plaintiff can recover from either wrongdoer on account of
    the fault of the other, but allows the wrongdoer named as a defendant to claim
    contribution by way of third party proceedings against the other wrongdoer
    based upon their respective degrees [of] fault. A plea that the plaintiff
    failed to mitigate is not embraced by [s. 1 of the
Negligence Act
]. It
    is a defence to the plaintiffs initial claim that reduces the amount that the
    plaintiff may recover from the defendant by shifting some portion of the
    responsibility for the wrong to the plaintiff.

[42]

It was in that context, namely, to identify why an allegation of
    negligent mitigation advice cannot support a third party claim, that the
    distinction was drawn between that type of claim and claims for contribution
    and indemnity against a party alleged to have been implicated in the events
    giving rise to the initial loss and who is therefore jointly and severally
    liable with the defendant for the entire loss:
Davy Estate
, at para. 23. In drawing that distinction, the court in
Davy

Estate

was not suggesting that a third party claim
    falling outside of the negligent mitigation advice category will necessarily be
    allowed to proceed.
Davy

Estate

reaffirmed
    the principle set out in
Macchi
,
that where the plaintiff has not
    distanced itself from responsibility for, or the consequences of, any
    negligence on the part of its counsel in the course of its agency, the agency situation
    in
Adams

applies such

that no
    third party claim can be brought against counsel: at para. 23. Because the
    agency situation is present here, the argument of Personal Insurance must fail.

[43]

The argument that the reasoning in
Corcoran

applies therefore also fails. In
Corcoran
,
a realtor was sued for
    negligently misrepresenting the value and development potential of commercial
    property. The realtor commenced a third party claim against the plaintiffs
    lawyer on the transaction, alleging that he was negligent in advising the
    plaintiff about the contents of the agreement of purchase and sale. In allowing
    the third party claim to stand, the court said, at p. 35:

This may not be a case where the fault alleged
    against the third party is in fact the fault of the plaintiff, but rather a
    case where the plaintiff may not be responsible for the negligence alleged
    against its solicitorThe plaintiff may be able to say it acted reasonably in
    retaining the third party to advise it on the terms of the agreement and
    accordingly should not be responsible for any negligence on the part of its
    solicitor[.]

[44]

In
Corcoran

the plaintiff
    retained and received advice from two professionals  its lawyer and its
    realtor. There was no finding of the type of agency situation described in
Adams
, making the lawyers allegedly negligent conduct
    attributable to the plaintiff
. There was no
    suggestion that the lawyer acted on behalf of the plaintiff in dealing with
    others in a manner analogous to filing a prospectus (as in
Adams
), filing a financing statement (as in
Macchi
), or dealing with Personal Insurance about the preservation of
    evidence (as in this case). Unlike in

Corcoran
,

Personal Insurance here
    has not pointed to any alleged act of negligence which the Hengevelds could say
    was, although committed by their lawyers, not their responsibility vis-à-vis Personal
    Insurance.

Corcoran
was distinguished
    in
Macchi
,
an
    agency situation case, and it is similarly distinguishable here.

(5)

The Novelty of the Hengevelds Cause of Action
    Against Personal Insurance Is Immaterial

[45]

Finally, Personal Insurance argues that the foundation of the action
    against it is spoliation, a cause of action which has been described as not
    fully settled in the jurisprudence and not something which should be dealt with
    under r. 21:
Spasic Estate v. Imperial Tobacco Ltd
.
(2000),
49 O.R. (3d) 699
, at para. 12. That submission is not germane. Regardless of how
    well-founded or novel the

Hengevelds
cause of action against Personal
    Insurance may be,
Personal Insurances ability to

bring a third party
    claim
is foreclosed under fully established legal principles. It is plain
    and obvious that the third party claim discloses no reasonable cause of action 
    it has no reasonable prospect of success and was properly struck:
R.
    v. Imperial Tobacco Canada Ltd.
, 2011 SCC 42, [2011] 3
    S.C.R. 45, at para. 17.

Conclusion

[46]

In
Davy

Estate
, at para.
    28, the court referred to the obvious mischief that could arise from allowing
    one party to sue another partys lawyer. That concern will not prevail where
    the defendant has a valid legal claim against the lawyer. Here, for the
    foregoing reasons, there is no valid legal claim. The policy discouraging such
    mischief coincides with the result the law requires.

[47]

I would dismiss the appeal with costs to the respondents fixed at $7500.00,
    inclusive of disbursements and applicable taxes.

Released: AH JUN 17, 2019

B. Zarnett J.A.

I agree. Alexandra Hoy
    A.C.J.O.

I agree. P. Lauwers
    J.A.





[1]
Conduct that is attributed to a plaintiff by some applicable principle of law
    is also referred to as conduct that is imputed to the plaintiff: see David
    Cheifetz,
Apportionment of Fault in Tort
(Aurora, Ont.: Canada Law Book, 1981) at 212.



[2]
The lawyers also moved to have the third party claim dismissed or stayed under
    Rule 21.01(3)(d) as an abuse of process of the court. In light of the motion
    judges ruling that the third party claim should be struck as disclosing no
    reasonable cause of action under r. 20.01(1)(b), he concluded that it was not
    necessary to make a determination as to abuse of process.



[3]
Attributing a proposed third partys negligence to the plaintiff can also come
    about through a settlement in which a plaintiff agrees with the settling party
    that any negligence that would have been attributed to the settling party at
    trial will be attributed to the plaintiff. This can occur through a Pierringer agreement
    or order, which requires the plaintiff to restrict its claim to the damages
    arising from the allegedly negligent acts of the defendants who are
not
part of the settlement, among other things: see
Endean
, at paras. 52-53.



[4]
These two situations may not be exhaustive. It is not necessary to decide the
    point here.



[5]

There are certain duties a plaintiff has that cannot be
    avoided by delegating them to another party such as its lawyers, including the
    duty to mitigate. Where the plaintiff did not fulfill its duty to mitigate its
    loss, that failure will be attributed to the plaintiff even if the failure was
    because it received poor advice about how to do so from its lawyers. Deficient
    advice about how to mitigate a loss cannot form the basis of a third party
    claim against the plaintiffs lawyers by the party who caused the loss:
Adams
, at p. 56
; Corcoran
,
at p. 34;
Davy

Estate
,
at para. 18.


