IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20140326

Docket: M111666

Registry:
Vancouver

Between:

Lien Anh Ngo

Plaintiff

And

Thien Luong

Defendant

Before:
The Honourable Mr. Justice Ehrcke

Reasons for Judgment

INTRODUCTION

[1]            
Are British Columbia residents who are involved in a motor vehicle
accident in Saskatchewan able to sue for damages in tort in British Columbia,
or are they bound by Saskatchewan’s no-fault insurance scheme?

[2]            
This is an application brought by the plaintiff with consent of the
defendant under Rule 9-4 of the Supreme Court Civil Rules for a decision
on a point of law. The question to be decided is whether certain provisions of
the Automobile Accident Insurance Act, R.S.S. 1978, c. A-35 as
amended [AAIA], are properly characterized as substantive or procedural
law, as that will affect whether or not the present action, brought in British
Columbia, is to be determined in accordance with those Saskatchewan provisions.

RULE 9-4

[3]            
Rule 9-4(2) provides:

9-4 (2)  If, in the opinion of
the court, the decision on the point of law substantially disposes of the whole
action or of any distinct claim, ground of defence, set-off or counterclaim,
the court may dismiss the action or make any order it considers will further
the object of these Supreme Court Civil Rules.

FACTS

[4]            
The defendant and the plaintiff, who are husband and wife, reside in
Burnaby, British Columbia. On July 26, 2009, they were travelling in
Saskatchewan in the defendant’s motor vehicle, which was registered in British
Columbia. He was driving, and she was his passenger. The defendant lost control
of the vehicle, and it flipped over. The plaintiff suffered personal injuries
in the accident.

THE PLEADINGS

[5]            
The plaintiff filed her notice of civil claim in this action in British
Columbia on March 29, 2011, seeking damages for her injuries, which she says
were caused by his negligent driving. She claims general damages for pain and
suffering and loss of enjoyment of life, special damages, past wage loss,
future wage loss, loss of earning capacity, and future care costs.

[6]            
The defendant filed a response to civil claim on August 23, 2011, and an
amended response to civil claim on July 20, 2012, in which he pleaded that the
plaintiff has no right of action for bodily injuries allegedly caused by the
Saskatchewan accident by reason of the AAIA. Specifically, the defendant
pleads and relies on ss. 40.1, 40.2 and 40.3 of the AAIA.

ISSUE

[7]            
As both parties are residents of British Columbia, they agree that this
Court has jurisdiction to hear the matter. The disagreement is the extent to
which the law of Saskatchewan applies. They are in agreement that matters of
procedure in this Court are governed by the law of British Columbia as the lex
fori (law of the forum), but that the substantive law of Saskatchewan
applies as the lex causae or lex loci delicti (law of the place
where the wrong occurred).

[8]            
Accordingly, the question to which the parties seek an answer is whether
the AAIA is properly characterized as procedural law or as substantive
law. If it is substantive, then it applies to this case, even though the suit
is brought in British Columbia. If it is procedural, then it would only apply
to a trial in Saskatchewan, and therefore, it would have no application to the
present proceedings in British Columbia.

SASKATCHEWAN’S AAIA

[9]            
In 1994, Saskatchewan adopted a comprehensive no-fault insurance scheme
by way of The Automobile Insurance Amendment Act, 1994, S.S. 1994, C.
34, s. 18 (the “1994 Amendment”).

[10]        
Under the 1994 Amendment, there was no right to choose a tort claim in
place of the no-fault scheme. Section 102 removed the right of action for all
persons for “bodily injuries caused by an automobile arising out of an
accident…” and replaced it with a right to certain benefits regardless of
fault. That section provided:

102  Notwithstanding any other Part of this Act or any other
Act or law, but subject to the other provisions of this Part:

(a)  no person has a right of
action respecting, arising out of or stemming from bodily injuries caused by an
automobile arising out of an accident that occurs on or after the date this
Part comes into force;

(b)  no action or proceeding lies
or may be instituted in any court respecting, arising out of or stemming from
bodily injuries caused by an automobile arising out of an accident that occurs
on or after the day this Part comes into force; and

(c)  the right to benefits stands in lieu of all rights of
action to which a person is or may be entitled to respecting, arising out of or
stemming from bodily injuries caused by an automobile arising out of an
accident that occurs on or after the day this Part comes into force.

[11]        
The Saskatchewan Court of Appeal in Cebryk v. Paragon Enterprises
(1984) Ltd., 2010 SKCA 146 described the legislative intent of the 1994
Amendment as being the implementation of a no-fault insurance scheme:

50        The declared and
otherwise obvious intention of the 1994 Amendment was to implement a no-fault
insurance scheme to provide a person injured in a motor vehicle accident with
immediate access to a broad range of benefits without regard to who was at
fault, and thereby avoid costly court proceedings associated with proving
causation or establishing the level of compensation to which the injured
insured or third party is entitled. These objectives are accomplished by the
payment of compensatory benefits out of the no-fault insurance fund to the
injured insured and others entitled to benefits under the AAIA.

[12]        
The scheme encountered criticism, and in 2002 the AAIA was
further amended by The Automobile Accident Insurance Amendment Act, 2002,
S.S. 2002, c. 44, s. 13 (the “2002 Amendment"), which repealed
s. 102 and enacted s. 40.1, which was similar to s. 102 except
that it did not include clause (c). It provides:

40.1     Notwithstanding any other Act or law but subject to
this Part and Part VIII :

(a)  no person has any right of
action respecting, arising out of or stemming from bodily injuries caused by a
motor vehicle arising out of an accident that occurs on or after the day this
Part comes into force; and

(b)  no action or proceeding lies or may be commenced in any
court respecting, arising out of or stemming from bodily injuries caused by a
motor vehicle arising out of an accident that occurs on or after the day this
Part comes into force.

[13]        
Unlike the 1994 Amendment, the 2002 Amendment provides an option for
Saskatchewan residents to choose tort coverage. Part II relates to tort
coverage, and Part VIII relates to no fault coverage. The relevant portions of
ss. 40.2 and 40.3 provide:

40.2(1) A Saskatchewan resident may provide the insurer with
a tort election that sets out
that resident’s intention to:

(a)  elect to obtain coverage
pursuant to Part II;

(b)  waive the resident’s right to
obtain benefits pursuant to Part VIII; and

(c)  elect to bring an action for
loss or damage for bodily injury caused by a motor vehicle arising out of an
accident.

…

(4)        Notwithstanding section 40.1 but subject to
sections 41 and 41.1 of this Act and section 44 of The Workers’ Compensation
Act, 1979, a tort election received by the insurer entitles the person
named in it to bring an action for loss or damage respecting arising out of or
stemming from bodily injury caused by a motor vehicle arising out of an
accident,

(5)        A
tort election received by the insurer is only effective as at the date and time
it is received and the tort election remains in effect until:

(a)  it is revoked; or

(b)  the person ceases to be a
Saskatchewan resident.

40.3(1) A tort election must be:

(a)  in writing; and

(b)  in the form provided by the
insurer.

…

(5)        A tort election must be served on the insurer:

(a)  by personally delivering the
tort election at any office of the insurer; or

(b)  by mailing the tort election
by ordinary mail to the head office of the insurer.

(6)        Notwithstanding
any other law, a tort election that is sent by ordinary mail pursuant to clause
(5)(b) must be received by the insurer before it is effective.

[14]        
The legislation does not specifically mention out-of-province drivers,
but only Saskatchewan residents are given the opportunity to make a tort
election. Moreover, even for Saskatchewan residents, a tort election is only
effective if it is made before there has been an accident, and only if the
claimant has not ceased to be a Saskatchewan resident.

[15]        
Section 101 provides that (subject to the transition provisions in
ss. 218-218.2) Part VIII dealing with no-fault benefits applies to anyone
injured in a motor vehicle accident who has not provided the insurer with a
tort election:

101(1) Notwithstanding any other provision of this Part or
any other Act or law but subject to sections 218 and 218.1, this Part applies
only to accidents that occur on or after the date that this Part comes into force.

(1.1)     This Part applies to any person who sustained
bodily injury caused by a motor vehicle arising out of an accident on or after
the date that this Part comes into force and who has not provided the insurer
with a tort election in the manner prescribed by Part IV.

(1.2)     A person who is
entitled to benefits pursuant to this Part is not entitled to benefits pursuant
to Part II other than a death benefit pursuant to Part II relating to the death
of an insured.

[16]        
A tort election was not made by the plaintiff in this case, nor would it
have been available to her as a non-resident.

THE DISTINCTION BETWEEN SUBSTANTIVE AND PROCEDURAL LAW

[17]        
The distinction between substantive and procedural law was described in
this way in Castel & Walker, Introduction to Conflict of Laws, 6th
Ed. (Toronto: Butterworth’s, 2005) at p 6-1:

“Procedure” has been described as
the “mode of proceeding by which a legal right is enforced as distinguished
from the law which gives or defines the right, and which by means of the
proceeding the court is to administer, the machinery as distinguished from the
product.” In other words, procedure pertains to the methods of presenting to a
court the operative facts upon which legal relations depend. It is primarily
concerned with the machinery for enforcing a right by action in the courts and
it has been held to include, inter alia, the form of the action, the
parties to the action, the determination of the proper court, the rules of
practice and pleadings, questions of evidence and the execution of foreign or
domestic judgments.

[18]        
The leading authority in Canada on the distinction between substantive
and procedural law is Tolofson v. Jensen; Lucas (Litigation Guardian of) v.
Gagnon, [1994] 3 S.C.R. 1022. Tolofson was a British Columbia resident
injured in a Saskatchewan motor vehicle accident. The suit was brought in
British Columbia, and an issue arose of whose limitation period applied. The
Supreme Court of Canada held that as the accident occurred in Saskatchewan,
Saskatchewan’s substantive law applied, and that included its limitation
period, which the Court found to be substantive, not procedural. As
Saskatchewan’s (shorter) limitation period had expired, Tolofson’s action was
barred, even though the case was brought in a British Columbia court.

[19]        
The Court explained the method by which laws may be characterized as
substantive or procedural:

76        In any action involving the application of a
foreign law the characterization of rules of law as substantive or procedural
is crucial for, as Cheshire and North, Cheshire and North’s Private
International Law (12th ed. 1992), at pp. 74-75, state:

One of the eternal truths of every
system of private international law is that a distinction must be made between
substance and procedure, between right and remedy. The substantive rights of
the parties to an action may be governed by a foreign law, but all matters
appertaining to procedure are governed exclusively by the law of the forum.

77        The reason for the distinction is that the forum
court cannot be expected to apply every procedural rule of the foreign state
whose law it wishes to apply. The forum’s procedural rules exist for the
convenience of the court, and forum judges understand them. They aid the forum
court to "administer [its] machinery as distinguished from its product"
(Poyser v. Minors (1881), 7 Q.B.D. 329, at p. 333, per Lush L.J.). Although
clearcut categorization has frequently been attempted, differentiating between
what is a part of the court’s machinery and what is irrevocably linked to the
product is not always easy or straightforward. The legal realist Walter Cook
has commented (The Logical and Legal Bases of the Conflict of Laws
(1942), at p. 166):

If we admit that the `substantive’
shades off by imperceptible degrees into the `procedural’, and that the `line’
between them does not `exist’, to be discovered merely by logic and analysis,
but is rather to be drawn so as best to carry out our purpose, we see that our
problem resolves itself substantially into this:  How far can the court of the
forum go in applying the rules taken from the foreign system of law without
unduly hindering or inconveniencing itself?

78        This pragmatic approach is illustrated by Block
Bros. Realty Ltd. v. Mollard (1981), 122 D.L.R. (3d) 323 (B.C.C.A.). In
that case the issue was whether the requirement of s. 37 of the Real
Estate Act, R.S.B.C. 1979, c. 356, that a real estate agent be
licensed in British Columbia, should be categorized as procedural or
substantive. The parties had executed a real estate listing agreement in
Alberta for land situated in British Columbia. The plaintiff, an agent licensed
in Alberta, sold the land to Alberta residents. The defendant vendor failed or
refused to pay the commission. The plaintiff sued in British Columbia. The lex
causae was Alberta. The defendant pleaded that the British Columbia
licensing requirement was procedural. The court, however, ruled that it was
substantive, notwithstanding that the section read: "A person shall not
maintain an action . . .", language traditionally relied on for a finding
that a statute is procedural because it purported to extinguish the remedy, but
not the right. The court expressly relied on policy reasons for its decision.
It stated at pp. 327-28:

If, however, the contract is
governed by the law of Alberta and if the contract is valid under the law of
Alberta, the characterization of s. 37 as procedural would deprive the
plaintiff of the opportunity to enforce his legal rights in a British Columbia
Court. The only purpose of s. 37 is to enforce the licensing sections, and
it should be examined in this context. I think that legislation should be
categorized as procedural only if the question is beyond any doubt. If there is
any doubt, the doubt should be resolved by holding that the legislation is
substantive.

79        This approach makes
sense to me. It is right to say, however, that it is significantly different
from the early common law position as it relates to statutes of limitation.

[20]        
The plaintiff in the present case concedes that the AAIA as it
existed following the 1994 Amendment, but prior to the 2002 Amendment, was
substantive law, so that a British Columbia resident who was involved in a
motor vehicle accident in Saskatchewan was bound by the Saskatchewan no-fault
provisions.

[21]        
According to the plaintiff, however, that changed with the 2002
Amendment, and the AAIA must now be categorized as procedural, with the
effect that it does not apply to persons who, like the plaintiff, bring their
case in a British Columbia court.

[22]        
Counsel for the plaintiff articulated the argument in this way at para. 14
of the written submissions:

14.       However, in 2002 the AAIA
was amended. It now allows Saskatchewan residents to choose either tort
coverage or no-fault coverage. The 2002 amendments changed the nature of the
law, transforming it from a substantive law that eliminated a cause of action
into a procedural law that governs how certain rights are enforced following a
motor vehicle accident. It is no longer a law that dictates the rights of
civilians. Rather, it is one that allows individuals to choose between two
procedures for pursuing their rights when injured in an accident.

[23]        
In support of that conclusion, the plaintiff advances this principle at para. 21:

21.       Where a legal system allows
residents to choose between different options, that scheme must be considered
procedural law. Simply put, substantive law must apply equally to all
citizens. The ability for individual citizens to decide whether a given law
will apply to them is a strong indicator that the law is procedural.
[Italics in original.]

[24]        
Counsel for the plaintiff was not able to refer me to any case authority
to support the principle expressed in the paragraph above, and it does not
appear to me to be a sound principle.

[25]        
In my view, the AAIA was substantive law before the 2002
Amendment, and it remains substantive law after the 2002 Amendment. The fact
that Saskatchewan residents are now given an option to make a tort election
prior to the occurrence of a motor vehicle accident does not change the proper
characterization of the law.

[26]        
Both before and after the 2002 Amendment, the AAIA defines the
rights of persons injured in motor vehicle accidents in Saskatchewan. It is not
concerned merely with the procedure or mechanism for enforcing those rights.

[27]        
The substantive rights of a person who is injured in a motor vehicle
accident in Saskatchewan after 2002 and who did not make a tort election prior
to the accident are those rights set out in Part VIII. That is true for anyone
who did not make a prior tort election, regardless of whether that person is a
Saskatchewan resident or not. The only difference is that the out-of-province
claimant never had the possibility of making such an election. But once the
accident has occurred and the claimant, whether from Saskatchewan or not, has
not previously made a tort election, the claimant’s rights are those defined by
Part VIII of the AAIA. Thus, the statute does not, as submitted by the
plaintiff, set out a procedural election by which a claimant who has been
injured in an accident can then select the means by which he or she enforces
his or her rights. The rights are already defined by the statute at the moment
the accident has occurred. Since the AAIA defines what the claimant’s
rights are and not the means of their enforcement, the AAIA is
substantive, not procedural law.

[28]        
This categorization of the AAIA has the consequence that a
British Columbia plaintiff who is injured in a Saskatchewan motor vehicle
accident is in no better position bringing his or her suit in British Columbia
than in Saskatchewan. The fact that this categorization eliminates a motive for
forum shopping is an additional indicator that the categorization of the law as
substantive is the correct categorization.

CONCLUSION

[29]        
The order sought by the plaintiff on this motion under Rule 9-4 was:

A declaration that this action is
not barred by the provisions of the Automobile Accident Insurance Act,
R.S.S. 1978, c. A-35, as pleaded at paragraphs 6 – 8 of the Defendant’s
Response to Civil Claim.

[30]        
As I have found the AAIA to be substantive, rather than
procedural law, and as the AAIA is therefore applicable to the
plaintiff’s claim regardless of the fact that it is brought in a British
Columbia court, the plaintiff’s request for a declaration that this action is
not barred by the provisions of the AAIA is dismissed.

The
Honourable Mr. Justice W.F. Ehrcke