Elliott v. ICPB, 2005 NSCA 115

• Jurisdiction: Nova Scotia
• Judge: Bateman, Freeman and Cromwell, JJ.A.
• Neutral Citation: 2005 NSCA 115
• Citation: 2005 NSCA 115,(2005), 236 N.S.R.(2d) 104 (CA),256 DLR (4th) 674,26 CCLI (4th) 1,[2005] CarswellNS 353,[2005] NSJ No 323 (QL),141 ACWS (3d) 878,236 NSR (2d) 104,[2005] NS.J. No 323 (QL),(2005), 236 NSR(2d) 104 (CA),236 NSR(2d) 104,256 D.L.R. (4th) 674,236 N.S.R.(2d) 104
• Date: 10 August 2005
• Court: Court of Appeal of Nova Scotia (Canada)

Elliott v. ICPB (2005), 236 N.S.R.(2d) 104 (CA);

    749 A.P.R. 104

MLB headnote and full text

Temp. Cite: [2005] N.S.R.(2d) TBEd. AU.012

Hugh Laird Elliott, Helen Geraldine Elliott, Michael David Elliott and Thomas Augustus Elliott (appellants) v. Insurance Crime Prevention Bureau, William A. Wilson, Donald T. Matheson Engineering Limited, Donald T. Matheson, MDS Environmental Services Limited, Dominique Levesque, The Attorney General of Nova Scotia representing Her Majesty the Queen in Right of the Province of Nova Scotia, Francis J. Savage and Marsh Adjustment Bureau Limited (respondents)

(CA 221995; 2005 NSCA 115)

Indexed As: Elliott v. Insurance Crime Prevention Bureau et al.

Nova Scotia Court of Appeal

Bateman, Freeman and Cromwell, JJ.A.

August 10, 2005.

Summary:

The plaintiffs' home was destroyed by fire. The plaintiffs' insurer denied coverage, alleging that the fire was deliberately set. The plaintiffs denied the allegation and sued the insurer to enforce coverage under the insurance policy.

The Nova Scotia Supreme Court, in a decision reported at 141 N.S.R.(2d) 365; 403 A.P.R. 365, allowed the plaintiffs' action. The insurer failed to prove on a balance of probabilities that the fire was deliberately set. Alternatively, if the fire was deliberately set, the insurer failed to prove that the plaintiffs either set it or arranged to have it set. The plaintiffs brought a second action against various defendants, alleging that they were negligent in investigating and reporting in respect of the fire loss, knowing that the insurer would rely on their reports. The defendant Crown sought to strike the plaintiffs' claim, alleging that they failed to give it proper notice of their intended action under s. 18 of the Proceedings Against the Crown Act. The plaintiffs sought default judgment against the Crown or, alternatively, an order directing the Crown to file its defence within a specified time period.

The Nova Scotia Supreme Court, in a decision reported at 174 N.S.R.(2d) 276; 532 A.P.R. 276, dismissed the Crown's application, dismissed the plaintiffs' application for summary judgment and ordered the Crown to file its defence within 10 days. The defendants applied under Civil Procedure Rules 25.01 and 37.10(a) and (g), for an order dismissing the action on the grounds of no existing duty of care and the doctrine of witness immunity.

The Nova Scotia Supreme Court, in a decision reported at 208 N.S.R.(2d) 356; 652 A.P.R. 356, allowed the application on both grounds and dismissed the action against all of the defendants. The plaintiffs appealed.

The Nova Scotia Court of Appeal dismissed the appeal.

Practice - Topic 218

Persons who can sue and be sued - Individuals and corporations - Status or standing - Witness immunity (incl. experts) - The Nova Scotia Court of Appeal held that "witness immunity does not apply to everyone who investigates anything which may result in litigation in which they may be possible witnesses. As one judge succinctly put it, an expert's professional negligence is not immunized whenever the expert later relies on it in court ... The immunity applies only to those statements made for the purpose of preparing evidence for legal proceedings and to those statements which must be protected in order to make the immunity for testimony effective." - See paragraph 106.

Practice - Topic 218

Persons who can sue and be sued - Individuals and corporations - Status or standing - Witness immunity (incl. experts) - The Nova Scotia Court of Appeal held that "To determine whether a defendant is entitled to witness immunity, four questions must be answered: 1. What is the conduct that forms the basis of the appellants' cause of action - that is, what is the 'gist and essence' of the appellants' claim? 2. What is the scope of the claimed immunity and does the 'gist and essence' of the appellants' claim fall within it? 3. Is the scope of the claimed immunity settled by authority? 4. If not, does the claimed immunity meet the test of necessity?" - See paragraph 120.

Practice - Topic 218

Persons who can sue and be sued - Individuals and corporations - Status or standing - Witness immunity (incl. experts) - The plaintiffs' home was destroyed by fire - The plaintiffs' insurer denied coverage, alleging that the fire was deliberately set - The plaintiffs successfully sued their insurer for recovery under their insurance policy - They then brought a second action against various other defendants, alleging that they were negligent in investigating and reporting in respect of the fire loss, knowing that the insurer would rely on their reports - The Nova Scotia Court of Appeal upheld the immunity claims of some defendants and rejected those of others - See paragraphs 101 to 219.

Practice - Topic 5260

Trials - General - Trial of preliminary issues - General principles (incl. when available or appropriate) - Civil Procedure Rule 25.01(1)(a) provided that "The court may, on the application of any party or on its own motion, at any time prior to a trial or hearing, determine any relevant question or issue of law or fact, or both" - The Nova Scotia Court of Appeal stated that a rule 25 application was not a procedure to determine whether there were issues to be tried, but to resolve questions of law and/or fact - Therefore, the test for summary judgment was neither appropriate for nor relevant to that exercise - The court reviewed the principles governing applications under rule 25 - The court held, inter alia, that a judge could draw inferences from the agreed facts on a rule 25 application, provided that they were reasonable and not inconsistent with the expressly agreed facts - See paragraphs 23 to 32.

Torts - Topic 81

Negligence - Duty of care - Requirement that duty be owed to plaintiff - The plaintiffs' home was destroyed by fire - The plaintiffs' insurer denied coverage, alleging that the fire was deliberately set - The plaintiffs successfully sued their insurer for recovery under their insurance policy - They then brought a second action against various other defendants, alleging that they were negligent in investigating and reporting in respect of the fire loss, knowing that the insurer would rely on their reports - The defendants included a deputy fire marshall (Savage) who investigated and reported on the cause of the fire - A chambers judge held that while there was a foreseeable risk of harm to the plaintiffs, there was not the necessary proximity between Savage and the plaintiffs to give rise to a duty of care - The Nova Scotia Court of Appeal agreed - See paragraphs 72 to 77.

Torts - Topic 81

Negligence - Duty of care - Requirement that duty be owed to plaintiff - The plaintiffs' home was destroyed by fire - The plaintiffs' insurer denied coverage, alleging that the fire was deliberately set - The plaintiffs successfully sued their insurer for recovery under their insurance policy - They then brought a second action against, inter alia, the insurance investigators, alleging that they were negligent in investigating and reporting in respect of the fire loss, knowing that the insurer would rely on their reports - The Nova Scotia Court of Appeal held that there was sufficient proximity to make it just and fair to impose a prima facie duty of care owed to the insured by an investigator retained to investigate the cause of a loss on behalf of the insurer - However, for substantial policy reasons, that duty should not be recognized - See paragraphs 43 to 71 and 78 to 99.

Cases Noticed:

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 20].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268, refd to. [para. 20].

Miawpukek Band v. Ind-Rec Highway Services Ltd. (1999), 172 Nfld. & P.E.I.R. 245; 528 A.P.R. 245 (C.A.), refd to. [para. 27].

McCallum v. Pepsi-Cola Canada Ltd. et al. (1974), 15 N.S.R.(2d) 27; 14 A.P.R. 27 (T.D.), refd to. [para. 28].

Curry v. Dargie (1984), 62 N.S.R.(2d) 416; 136 A.P.R. 416 (C.A.), refd to. [para. 28].

Seacoast Towers Services Ltd. v. MacLean (1986), 75 N.S.R.(2d) 70; 186 A.P.R. 70 (C.A.), refd to. [para. 28].

Brown v. Dalhousie University (1995), 142 N.S.R.(2d) 98; 407 A.P.R. 98 (C.A.), refd to. [para. 28].

Fraser et al. v. Westminer Canada Ltd. et al. (1996), 155 N.S.R.(2d) 347; 457 A.P.R. 347 (C.A.), refd to. [para. 28].

Binder v. Royal Bank of Canada et al. (1996), 150 N.S.R.(2d) 234; 436 A.P.R. 234 (C.A.), refd to. [para. 28].

Fortune v. Reynolds et al. (2003), 212 N.S.R.(2d) 94; 665 A.P.R. 94 (C.A.), refd to. [para. 28].

Knock v. Fouillard et al., [2004] N.S.R.(2d) Uned. 64; 2004 NSCA 70, refd to. [para. 28].

Dawnstar Developments Inc. v. Ross and Ross (1989), 89 N.S.R.(2d) 265; 227 A.P.R. 265 (C.A.), refd to. [para. 29].

Derksen et al. v. 539938 Ontario Ltd. et al., [2001] 3 S.C.R. 398; 273 N.R. 356; 150 O.A.C. 1, refd to. [para. 30].

Salmo Investments Ltd. v. Canada, [1940] S.C.R. 263, refd to. [para. 30].

Stettler (County No. 6) v. Conibear, [1975] A.J. No. 89 (D.C.), refd to. [para. 30].

Ponoka-Calmar Oils, Ltd. v. Wakefield (Earl F.) Co., [1960] A.C. 18 (P.C.), refd to. [para. 30].

Bell et al. v. Canada (Attorney General) et al. (2002), 200 N.S.R.(2d) 154; 627 A.P.R. 154 (C.A.), refd to. [para. 30].

Gordon v. Nova Scotia Teachers' Union, [1983] N.S.J. No. 307 (T.D.), refd to. [para. 30].

R. v. Cooper, [1978] 1 S.C.R. 860; 14 N.R. 181, refd to. [para. 30].

R. v. Collard et al. (1987), 49 Man.R.(2d) 175; 39 C.C.C.(3d) 471 (C.A.), refd to. [para. 30].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 47].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201, dist. [para. 48].

Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), refd to. [para. 48].

Halifax Insurance Co. v. Matheson (Donald T.) Engineering Ltd. et al. (1995), 143 N.S.R.(2d) 161; 411 A.P.R. 161 (S.C.), refd to. [para. 51].

Beckstead v. Ottawa (City) Chief of Police, [1997] O.A.C. Uned. 568; 37 O.R.(3d) 62 (C.A.), refd to. [para. 52].

de Jong et al. v. Midland Police Services Board, [2002] O.T.C. 298 (Sup. Ct.), refd to. [para. 52].

Fraser et al. v. Westminer Canada Ltd. et al. (2003), 215 N.S.R.(2d) 377; 675 A.P.R. 377 (C.A.), refd to. [para. 57].

South Pacific Manufacturing Co. v. New Zealand Security Consultants and Investigations, [1992] 2 N.Z.L.R. 282 (C.A.), refd to. [para. 58].

Hamilton v. Marion (Chris) Holdings, [1981] I.L.R. 1-1398 (Ont. H.C.), dist. [para. 69].

London Drugs Ltd. v. Kuehne & Nagel International Ltd. - see London Drugs Ltd. v. Brassart and Vanwinkel.

London Drugs Ltd. v. Brassart and Vanwinkel, [1992] 3 S.C.R. 299; 143 N.R. 1; 18 B.C.A.C. 1; 31 W.A.C. 1, refd to. [para. 70].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 2002 SCC 18, refd to. [para. 82].

Haskett v. Equifax Canada Inc. et al. - see Haskett v. Trans Union of Canada Inc. et al.

Haskett v. Trans Union of Canada Inc. et al. (2003), 169 O.A.C. 201; 63 O.R.(3d) 577 (C.A.), dist. [para. 82].

Sulzinger v. Alexander (C.K.) Ltd., [1972] 1 O.R. 720 (C.A.), refd to. [para. 93].

Hamilton v. Marion (Chris) Holdings, [1981] I.L.R. 1-1398 (Ont. H.C.), refd to. [para. 93].

Bullock v. Trafalgar Insurance Co. of Canada et al. (1996), 9 O.T.C. 245 (Gen Div.), refd to. [para. 93].

Abbasi v. Portage La Prairie Mutual Insurance Co. et al., [2004] 3 W.W.R. 665; 347 A.R. 275 (Q.B. Master), refd to. [para. 93].

Bush v. Continental Insurance Co., [2002] I.L.R. I-4033, refd to. [para. 93].

Graham v. Entec Europe Ltd. (Exploration Associates), [2003] E.W.J. No. 4259 (C.A.), refd to. [para. 93].

Sanchez v. Lindsey Morden Claims Services Inc. (1999), 72 Cal. App.(4th) 249 (Cal. C.A.), refd to. [para. 93].

Charleston Dry Cleaners & Laundry Inc. v. Zurich American Insurance Co. (2003), 355 S.C. 614 (S.C.), refd to. [para. 93].

Morvay v. Hanover Insurance Co. (1986), 127 N.H. 723 (N.H.S.C.), refd to. [para. 93].

Brown v. State Farm & Cas. Co., 2002 OK Civ. App. 107 (Okla. C.A.), refd to. [para. 93].

X (Minors) v. Bedfordshire County Council - see P1 et al. v. Bedfordshire County Council.

P1 et al. v. Bedfordshire County Council, [1995] 2 A.C. 633; 185 N.R. 173 (H.L.), refd to. [para. 95].

H.V.K. et al. v. Children's Aid Society of Haldimand-Norfolk et al., [2003] O.T.C. 347; 37 R.F.L.(4th) 348 (Sup. Ct.), refd to. [para. 96].

Branco v. Sunnybrook & Women's College Health Sciences Centre et al., [2003] O.T.C. 753 (Sup. Ct.), refd to. [para. 96].

Johnson v. State Farm Mutual Automobile Insurance Co. (1998), 72 O.T.C. 206 (Gen. Div.), refd to. [para. 97].

Lowe et al. v. Guarantee Co. of North America et al., [2003] O.T.C. Uned. 667; 67 O.R.(3d) 124 (Sup. Ct.), refd to. [para. 97].

Lynch v. Appell et al., [2001] O.T.C. Uned. C31 (Sup. Ct.), refd to. [para. 97].

Spiers v. Zurich Insurance Co. et al., [1999] O.T.C. 11; 45 O.R.(3d) 726 (Sup. Ct.), refd to. [para. 99].

Pilat v. Federation Insurance Co. of Canada et al., [2003] Sask.R. Uned. 171 (Q.B.), refd to. [para. 99].

Wigmore v. Canadian Surety Co. et al., [1994] 9 W.W.R. 521; 124 Sask.R. 113 (Q.B.), refd to. [para. 99].

Walsh v. Nicholls et al. (2004), 273 N.B.R.(2d) 203; 717 A.P.R. 203; 241 D.L.R.(4th) 643 (C.A.), refd to. [para. 99].

Burke v. Buss, [2002] O.J. No. 2938 (Sup. Ct.), refd to. [para. 99].

Curtis v. State Farm Mutual Automobile Insurance Co. et al., [2003] O.T.C. Uned. 622 (Sup. Ct.), refd to. [para. 99].

Carnahan et al. v. Coates et al. (1990), 71 D.L.R.(4th) 464 (B.C.S.C.), refd to. [para. 106].

Watson v. M'Ewan, [1905] A.C. 480 (H.L.), refd to. [para. 112].

Halls v. Mitchell, [1928] S.C.R. 125, refd to. [para. 112].

Martini v. Wrathall (1999), 180 N.S.R.(2d) 38; 557 A.P.R. 38 (C.A.), refd to. [para. 113].

Horn Abbott Ltd. v. Reeves (2000), 189 D.L.R.(4th) 644 (N.S.C.A.), refd to. [para. 113].

Smith v. Canadian Pacific Railway Co. et al. (2003), 181 Man.R.(2d) 150 (Q.B. Master), refd to. [para. 113].

Darker v. Chief Constable of West Midlands Police, [2001] 1 A.C. 435 (H.L.), refd to. [para. 115].

Taylor et al. v. Director of the Serious Fraud Office et al., [1999] 2 A.C. 177; 233 N.R. 172 (H.L.), refd to. [para. 118].

Mann v. O'Neill (1997), 71 A.L.J.R. 903 (H.C.), refd to. [para. 118].

Roy v. Prior, [1971] A.C. 470 (H.L.), refd to. [para. 119].

Weber v. Ontario Hydro, [1995] 2 S.C.R. 929; 183 N.R. 241; 82 O.A.C. 321, refd to. [para. 122].

Marrinan v. Vibart, [1963] 1 Q.B. 528 (C.A.), refd to. [para. 129].

Samuel Manu-Tech Inc. v. Redipac Recycling Corp. et al. (1999), 124 O.A.C. 125 (C.A.), refd to. [para. 129].

Surzur Overseas Ltd. v. Koros et al., [1999] 2 Lloyds L.R. 611 (C.A.), refd to. [para. 129].

Allen v. Morrison et al., [2004] O.T.C. Uned. A81 (Sup. Ct.), refd to. [para. 129].

Kravit v. Dilli, [1998] B.C.T.C. Uned. 827; 56 B.C.L.R.(3d) 150 (S.C.), refd to. [para. 132].

Monje-Alvarez et al. v. Monje-Alvarez et al. (1992), 14 B.C.A.C. 269; 26 W.A.C. 269; 93 D.L.R.(4th) 659 (C.A.), refd to. [para. 132].

Smith v. Kneier et al. (2001), 288 A.R. 144 (Q.B.), refd to. [para. 132].

Bruce v. Byrne-Stevens and Associates Engineers Ltd. (1989), 776 P. 2d 666, refd to. [para. 138].

Read et al. v. Munt, [2004] O.T.C. 459; 71 O.R.(3d) 22 (Sup. Ct.), refd to. [para. 141].

Boychyn v. Abbey, [2001] O.T.C. 832 (Sup. Ct.), refd to. [para. 141].

R.G-H. and W.G-H. v. Christison et al. (1996), 150 Sask.R. 1 (Q.B.), refd to. [para. 149].

Foran v. Richman (1975), 10 O.R.(2d) 634 (C.A.), refd to. [para. 151].

Fabian v. Margulies (1985), 53 O.R.(2d) 380 (C.A.), refd to. [para. 152].

Web Offset Publications Ltd. et al. v. Vickery et al. (1998), 40 O.R.(3d) 526 (Gen. Div.), affd. (1999), 123 O.A.C. 235; 43 O.R.(3d) 802 (C.A.), leave to appeal dismissed (2000), 256 N.R. 200; 136 O.A.C. 199 (S.C.C.), refd to. [para. 156].

Hamouth v. Stuart Video Technologies Inc., [2005] B.C.J. No. 639 (C.A.), refd to. [para. 158].

Moseley-Williams v. Hansler Industries Ltd., [2004] O.J. No. 5253 (Sup. Ct.), affd. [2005] O.A.C. Uned. 209 (C.A.), refd to. [para. 159].

Varghese v. Landau, [2004] O.T.C. 97 (Sup. Ct.), refd to. [para. 161].

Evans v. London Hospital Medical College et al, [1981] 1 All E.R. 715 (Q.B.), refd to. [para. 162].

Stanton v. Callaghan, [1998] E.W.J. No. 823 (C.A.), refd to. [para. 182].

Hall (Arthur J.S.) & Co. v. Simons, [2002] 1 A.C. 615; 258 N.R. 1 (H.L.), refd to. [para. 185].

Kansa General International Insurance Co. v. Morden & Helwig Ltd. et al., [2001] O.T.C. 841; 57 O.R.(3d) 58 (Sup. Ct.), refd to. [para. 190].

Ayangma v. NAV Canada et al. (2001), 197 Nfld. & P.E.I.R. 83; 591 A.P.R. 83; 203 D.L.R.(4th) 717 (P.E.I.C.A.), refd to. [para. 194].

Starkman v. Canada (Attorney General) et al., [2000] O.T.C. Uned. E44 (Sup. Ct.), refd to. [para. 195].

Kazas v. Peterson, [1992] O.J. No. 1666 (Gen. Div.), refd to. [para. 197].

Rajkhowa v. Watson et al. (1998), 167 N.S.R.(2d) 108; 502 A.P.R. 108 (S.C.), refd to. [para. 198].

Lincoln v. Daniels, [1961] 3 All E.R. 740 (C.A.), refd to. [para. 198].

Sussman v. Eales et al. (1985), 1 C.P.C.(2d) 14 (Ont. H.C.), affd. (1986), 25 C.P.C.(2d) 7 (Ont. C.A.), refd to. [para. 198].

Teskey v. Toronto Transit Commission, [2003] O.J. No. 5314 (Sup. Ct.), refd to. [para. 199].

Hanisch v. Canada et al., [2003] B.C.T.C. 1000; 16 B.C.L.R.(4th) 310; 2003 BCSC 1000, revd. in part (2004), 203 B.C.A.C. 161; 332 W.A.C. 161; 35 B.C.L.R.(4th) 33 (C.A.), refd to. [para. 200].

Crossan v. Mortgage and Appraisals Ltd. et al. (1998), 164 Nfld. & P.E.I.R. 319; 507 A.P.R. 319 (Nfld. T.D.), refd to. [para. 201].

Larche v. Middleton (1989), 69 O.R.(2d) 400 (H.C.), refd to. [para. 206].

Gursikh Sabha Canada et al. v. Jauhal et al. (2002), 168 O.A.C. 362 (C.A.), affing. [2001] O.T.C. 788 (Sup. Ct.), refd to. [para. 206].

Statutes Noticed:

Civil Procedure Rules (N.S.), rule 25.01(1)(a) [para. 18].

Rules of Court (N.S.) - see Civil Procedure Rules (N.S.).

Authors and Works Noticed:

Brown, Raymond E., The Law of Defamation in Canada (1999) (2004 Looseleaf Update, Release 4), pp. 9-5 [para. 118]; 12.4(1) [para. 112]; 12.4(2) [para. 114]; 12.4(4)(a) [para. 112]; 12.4(4)(e) [para. 117]; 12.4(7) [para. 118].

Couch, G.J., Cyclopedia of Insurance Law (3rd Ed. 1997), c. 208, Part VIII [para. 93].

Fridman, Gerald Henry Louis, The Law of Torts in Canada (2nd Ed. 2002), p. 848 [para. 89].

Gatley, Libel and Slander (9th Ed. 1997), p. 290 [para. 156].

Halsbury's Laws of England (4th Ed. 1976), vol. 17, para. 261 [para. 113].

Lindahl, Barry (2nd Ed. 2004) ( 2005 Cumulative Supp. 2005), Modern Tort Law, para. 26:59 [para. 93].

Linden, Allen M., Canadian Tort Law (7th Ed. 2001), pp. 19, 20 [para. 79].

Counsel:

Keith MacKay, for the appellants;

Michael E. Dunphy, Q.C., for the respondents, Insurance Crime Prevention Bureau and William A. Wilson;

Douglas Skinner, for the respondents, Donald T. Matheson Engineering Ltd. and Donald T. Matheson;

Matthew Williams, for the respondents, MDS Environmental Services Ltd. and Dominique Levesque;

Catherine Lunn, for the respondents, Attorney General of Nova Scotia and Francis J. Savage;

John MacDonald, for the respondent, Marsh Adjustment Bureau Ltd.

This appeal was heard on January 11 and 18, 2005, by Bateman, Freeman and Cromwell, JJ.A., of Nova Scotia Court of Appeal. Cromwell, J.A., delivered the following decision on August 10, 2005.