The traditional view has been that a motor vehicle accident victim had no right to claim directly against the at-fault motorist insurer until Judgment was obtained. Section 258(1) of the Insurance Act permits a non-party to the insurance contract, ie. a victim, to maintain an action against the insurer but “only upon recovering a Judgment” against the at-fault motorist.
The recent decision of Master Roger of the Ontario Superior Court in Williams v. Pintar; Jevco Insurance Company, Third Party, provides an avenue for plaintiff counsel to bring the at-fault party’s insurer into the litigation at the outset.
The facts in Williams are simply stated. Williams, an uninsured pedestrian, was struck by a vehicle operated by Pintar. Pintar’s prior vehicle was insured by Jevco but Jevco took the position that Pintar’s newly acquired vehicle, which was involved in the accident, was not insured by Jevco at the time of the loss. Jevco denied coverage to Pintar but added itself as a statutory third party to the litigation pursuant to Section 258(14) of the Insurance Act.
Presumably, not content to have the question of insurance coverage adjudicated after obtaining a Judgment against the at-fault motorist, plaintiff counsel brought a motion to add Jevco as a defendant and seek declaratory relief against Jevco. Specifically, Pintar’s counsel sought among other declarations the following:
A declaration and determination of the rights of the plaintiff in respect to payment under policy number….issued by Jevco.
Jevco resisted the proposed amendments and the addition of itself as a party defendant. Jevco’s counsel argued that in the absence of a Judgment as contemplated in Section 258(1) of the Insurance Act, the plaintiff has no relationship contractual or otherwise with Jevco and, therefore, no cause of action directly against Jevco.
Master Roger agreed, in part, with the submission of Jevco’s counsel. He agreed that the plaintiff could not claim a declaratory order providing for payment by Jevco of any Judgment rendered against Pintar. That relief would not be tenable in law as no direct cause of action existed between the plaintiff and Jevco. However, the Statement of Claim could be amended to add Jevco as a party defendant and also be amended for a declaration and determination of the rights of the plaintiff in respect to the payment under the Jevco policy.
Master Roger relied on a line of cases that stand for the proposition that a judge of the Superior Court of Justice has general power to make a declaration whether or not there is a cause of action at the instance of a party who is interested in the subject matter of the declaration.
Master Roger also pointed out that allowing the amendments would be consistent with the principles articulated in the recent Supreme Court of Canada decision of Hryniak v. Mauldin. The judicial process must be fair and result in a just adjudication of disputes but the process must be accessible, proportionate, timely and affordable. By permitting the amendments, the plaintiff is not required to first proceed with potentially a long complex personal injury trial before adjudication of the issue of coverage and recovery. Master Roger also reasoned that the amendments may allow the issue of coverage to be resolved by way of motion for summary judgment.
In my view, Master Rogers’ decision makes a great deal of sense. Early and expeditious adjudication of coverage/recovery issues is in the interest of both plaintiffs and defendants.