MacKean et al. v. Royal & Sun Alliance Insurance Co. of Canada et al., (2015) 358 N.S.R.(2d) 88 (CA)

• Judge: Farrar, Oland and Bryson, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: October 15, 2014
• Jurisdiction: Nova Scotia
• Citations: (2015), 358 N.S.R.(2d) 88 (CA);2015 NSCA 33

MacKean v. Royal & Sun (2015), 358 N.S.R.(2d) 88 (CA);

    1131 A.P.R. 88

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. AP.019

Cindy L. MacKean and Dalton Holley, through his litigation guardian Cindy L. MacKean (appellants) v. Royal & Sun Alliance Insurance Company of Canada and Joseph Allen Goodall (respondents)

(CA 424628; 2015 NSCA 33)

Indexed As: MacKean et al. v. Royal & Sun Alliance Insurance Co. of Canada et al.

Nova Scotia Court of Appeal

Farrar, Oland and Bryson, JJ.A.

April 10, 2015.

Summary:

Pursuant to the uninsured motorist (Section D) provisions of her insurance policy with Royal & Sun Alliance Insurance Company of Canada (RSA), MacKean and her son (plaintiffs) sued RSA for injuries that they sustained in a motor vehicle accident that was allegedly caused by an uninsured motorist (Goodall). Goodall was subsequently added as a defendant. The plaintiffs settled their claim against RSA upon a payment of $500,000 to MacKean and $5,000 to her son. The claim against Goodall continued and was assigned by the plaintiffs to RSA. Goodall did not defend the action and default judgment was entered against him with damages to be assessed. RSA filed a motion seeking an assessment of damages against Goodall in the total amount of $505,000. It submitted that the only issue to be determined on the motion was whether the agreement between RSA and the plaintiffs to settle the claim for $505,000 was reasonable.

The Nova Scotia Supreme Court, in a decision reported at (2014), 340 N.S.R.(2d) 204; 1077 A.P.R. 204, dismissed the motion. The normal burden of proving damages on an assessment was not relaxed for a reimbursement claim by an insurer. The plaintiffs were required to prove their damages on a balance of probabilities based on admissible evidence. RSA appealed.

The Nova Scotia Court of Appeal allowed the appeal and remitted the matter to the Supreme Court for an assessment of damages. The unique character of Section D coverage rendered reasonable settlements relevant to the quantification of loss in such cases.

Damages - Topic 101

General principles - Evidence and proof - General - [See Insurance - Topic 2900 ].

Damages - Topic 705

Time for assessment - General principles - Personal injury cases - The plaintiffs sustained injuries in an accident caused by an uninsured motorist (Goodall) - The plaintiffs obtained default judgment against Goodall with damages to be assessed - The plaintiffs sued Royal & Sun Alliance Insurance (RSA) under the uninsured motorist provisions of an insurance policy - RSA settled the claim by paying the plaintiffs a total of $505,000 - RSA pursued a subrogated claim against Goodall - RSA's motion for an assessment of damages based on the settlement amount was dismissed - On appeal, RSA argued that damages should be assessed as of the date of the motion for an assessment of damages rather than the date of settlement - The Nova Scotia Court of Appeal stated that "The assessment of damages is usually done as of the motion because damages are assessed 'once and for all' at one time ... In cases where the plaintiff has settled a general damage claim some considerable time prior to the assessment, the court may need more contemporary evidence to assess the reasonableness of settlement. That would not normally be so for special damages and out-of-pocket types of expenses. In this case settlement occurred in December of 2009. The motion for an assessment of damages was not filed until November 2013. That delay warranted some recent evidence on general damages." - See paragraphs 55 to 61.

Insurance - Topic 2900

Subrogation - Action by insurer - Measure of damages - MacKean and her son (plaintiffs) sustained injuries in an accident caused by an uninsured motorist (Goodall) - The plaintiffs obtained default judgment against Goodall with damages to be assessed - The plaintiffs sued Royal & Sun Alliance Insurance (RSA) under the uninsured motorist (Section D) provisions of MacKean's insurance policy - RSA settled the claim by paying the plaintiffs a total of $505,000 - RSA pursued a subrogated claim against Goodall and moved for an assessment of damages in the amount of $505,000 - RSA submitted that the only issue to be determined on the motion was whether the settlement agreement was reasonable - The motion judge rejected this submission and stated that the plaintiffs were still required to prove their damages on a balance of probabilities based on admissible evidence - The Nova Scotia Court of Appeal allowed RSA's appeal - Section D coverage was limited to what the insured was legally entitled to recover from an uninsured driver - The settlement was therefore relevant because it was effected by the same principle that courts used to calculate damages - The onus was still on the plaintiffs to establish that the settlement was reasonable - In terms of access to justice, there was nothing wrong in principle with a simpler, quicker, less expensive and proportional basis for assessing damages in undefended cases such as this one - See paragraphs 24 to 54.

Insurance - Topic 4101

Automobile insurance - Uninsured or underinsured motorist coverage - General - [See Insurance - Topic 2900 ].

Cases Noticed:

R. v. Mohan, [1994] 2 S.C.R. 9; 166 N.R. 245; 71 O.A.C. 241, refd to. [para. 12].

Central Halifax Community Association v. Halifax (Regional Municipality) et al. (2007), 253 N.S.R.(2d) 203; 807 A.P.R. 203; 2007 NSCA 39, refd to. [para. 12].

Biggin & Co. v. Permanite Ltd., [1951] 2 K.B. 314 (C.A.), refd to. [para. 13].

Hamstra et al. v. British Columbia Rugby Union et al., [1997] 1 S.C.R. 1092; 211 N.R. 89; 89 B.C.A.C. 161; 145 W.A.C. 161, refd to. [para. 16].

General Accident Assurance Co. of Canada et al. v. Kloc (1985), 53 O.R.(2d) 353 (Dist. Ct.), not folld. [para. 17].

Grosvenor Fine Furniture (1982) Ltd. v. Terrie's Plumbing & Heating Ltd. et al. (1993), 113 Sask.R. 105; 52 W.A.C. 105 (C.A.), dist. [para. 17].

Waterloo Insurance Co. and Zurbrigg et al., [1983] I.L.R. 1-1707 (Ont. C.A.), refd to. [para. 30].

Somersall v. Friedman et al. (2002), 292 N.R. 1; 163 O.A.C. 201; 2002 SCC 59, refd to. [para. 31].

Colbourne v. MacLean et al. (2005), 239 N.S.R.(2d) 119; 760 A.P.R. 119; 2005 NSSC 324, refd to. [para. 39].

Sable Offshore Energy Inc. et al. v. Ameron International Corp. et al. (2013), 446 N.R. 35; 332 N.S.R.(2d) 1; 1052 A.P.R. 1; 2013 SCC 37, refd to. [para. 46].

Hryniak v. Mauldin (2014), 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 47].

Garner v. Bank of Nova Scotia (2014), 341 N.S.R.(2d) 180; 1081 A.P.R. 180; 2014 NSSC 63, agreed with [para. 48].

Hole v. Chard Union, [1894] 1 Ch. 293, refd to. [para. 58].

Darley Main Colliery Co. v. Mitchell (1886), 11 App. Case. 127, refd to. [para. 60].

Andrews et al. v. Grand & Toy (Alberta) Ltd. et al., [1978] 2 S.C.R. 229; 19 N.R. 50; 8 A.R. 182, refd to. [para. 60].

Watkins v. Olafson et al., [1989] 2 S.C.R. 750; 100 N.R. 161; 61 Man.R.(2d) 81, refd to. [para. 60].

Johnson v. Agnew, [1980] A.C. 367 (H.L.), refd to. [para. 60].

Counsel:

C. Patricia Mitchell and Leah Grimmer, for the appellants, Cindy MacKean and Dalton Holley;

Royal & Sun Alliance Insurance Company of Canada, respondent (not participating);

Joseph Allen Goodall, respondent (not participating).

This appeal was heard in Halifax, N.S., on October 15, 2014, before Farrar, Oland and Bryson, JJ.A., of the Nova Scotia Court of Appeal. Bryson, J.A., delivered the following reasons for judgment for the court on April 10, 2015.