IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120410

Docket: M102610

Registry:
Vancouver

Between:

Karishma Devi
Goundar

Plaintiff

And

Vuong Phi Nguyen
and
Christopher Victor Stewart

Defendants

Before:
The Honourable Madam Justice Humphries

Reasons for Judgment

[1]            
The defendant Nyugen applies pursuant to Rule 7-7(5) to withdraw an
admission of liability filed in a motor vehicle action.  Counsel appearing for
the defendants appears as agent for counsel of record, because counsel of
record has reported herself to her insurer for reasons that will become
apparent.

[2]            
The accident underlying the motor vehicle action occurred on July 22,
2008.  The plaintiff Goundar was making a left hand turn at a light on Nordel
Way in the City of Delta, British Columbia.  Nguyen was going straight through
the intersection in the opposite direction.  The vehicles collided.  Both were
written off.  Goundar’s vehicle struck the defendant Stewart’s vehicle as
well.  There is conflicting information before me as to the location of
Stewart’s vehicle.  The police report says Goundar’s car was pushed into
Stewart’s vehicle which was on a cross street, which is what I understood from
the submissions of defendants’ counsel during the hearing.  The accords with
Nguyen’s statement that Stewart was stopped at a stop light on the cross street
and Goundar’s car hit him after the collision with Nguyen.  However, according
to the lawyer’s affidavit, it appears the lawyer understood that Stewart was
travelling behind Nguyen.  This is not of significance to this application.

[3]            
Nguyen was issued a ticket as a result of the accident, based on the
statement of a witness, Maharajh, who was travelling behind Goundar.  Nguyen
disputed the ticket, the officer did not show up, and she was acquitted.

[4]            
Goundar commenced an action on May 31, 2010, against Nguyen and
Stewart.  ICBC appointed a law firm to represent both Nguyen and Stewart, with
instructions to deny liability, but to canvass the possibility of obtaining a
discontinuance against Stewart in exchange for an admission of liability by
Nguyen.

[5]            
On June 15, 2010, the lawyer who had conduct of the file (“the lawyer”)
wrote to Ms. Nguyen to advise her that the lawyer’s instructions were to admit
liability, unless Ms. Nguyen objected.  No response was received.

[6]            
The lawyer conducted some investigations into the facts of the accident
and concluded, based on information she received from Stewart, that Goundar may
have made an unsafe turn.  She discussed this with the adjuster, received
instructions not to admit liability, and filed a Response to Civil Claim
denying liability on August 31, 2010.

[7]            
The parties exchanged documents and set discovery and trial dates.  The
trial is set to commence on July 16, 2012, for ten days with a jury.

[8]            
On January 5, 2011, the lawyer’s paralegal reminded her of the initial
instructions to seek a dismissal against Mr. Stewart in exchange for an
admission of liability on behalf of Nguyen.  The paralegal did not mention the
subsequent instructions.  Without reviewing the file in its entirety, the
lawyer canvassed with counsel for Goundar the initial proposal suggested by the
adjuster – that is, a discontinuance against Stewart in exchange for an
admission of liability on behalf of Nguyen.  Goundar’s counsel agreed, the
notice of discontinuance against Stewart was filed on January 14, 2011, and an
amended Response was filed on February 1, 2011, admitting liability on behalf
of Nguyen.

[9]            
The parties attended mediation in October 2011, and the adjuster advised
plaintiff’s counsel that ICBC would take steps to withdraw the admission. 
Nguyen was not present at the mediation.

[10]        
On November 1, 2011, the lawyer, having received a request for discovery
of Nguyen, phoned Nguyen to arrange discovery dates.  Nguyen told her, and has
deposed, that she had never received the July 15, 2010 letter, did not know she
was a defendant, and had in fact commenced her own action against Goundar on
July 15, 2010.

[11]        
The lawyer reviewed the file on January 19, 2012 and for the first time realized
she had made an error in admitting liability, contrary to the most recent set
of instructions on the file.

[12]        
This application was set down for the end of January, adjourned when present
counsel for the defendants was appointed to the file, and was heard on March
27, 2012.

[13]        
The parties differ on the approach to be taken.  Defendants’ counsel
says this should be considered as an application to withdraw an admission under
the Rules of Court.  Goundar’s counsel says the defendant Nguyen is
seeking the court’s assistance to withdraw from an enforceable contract and is
estopped from doing so, but even under the Rules, she should not be
permitted to withdraw the admission.

DEFENDANT’S POSITION

[14]        
Counsel for the defendants refers to Hamilton v. Ahmed [1999]
B.C.J. No. 311, for the test for the withdrawal of an admission.  The
court should consider whether there is a triable issue which, in the interests
of justice, should be resolved on the merits and not disposed of by admission. 
Relevant considerations include:

·      
whether the admission was made hastily, inadvertently, or without
knowledge of the facts;

·      
whether the fact admitted was within the knowledge of the party
making the admission;

·      
whether the fact admitted is not true;

·      
whether the fact admitted is one of mixed fact and law;

·      
whether withdrawal of the admission would not prejudice a party;
and

·      
whether there has been delay in applying to withdraw the
admission.

Triable issue

[15]        
Counsel for the defendants says there is a triable issue.  Stewart,
interviewed by the lawyer, said he would not have made the turn in the
circumstances Goundar did.  The lawyer formed the opinion that Goundar could
have turned when it was unsafe to do so.  Counsel for the defendants points to
case law stating what is really common sense:  liability for intersection
accidents is never (one might preferably say “rarely”) cut and dried (Sharpe
v. Dimsdale 2001 BCSC 1225).

Inadvertence

[16]        
Counsel for the defendants says the admission of liability was made
inadvertently and was inconsistent with the lawyer’s most recent instructions. 
Nguyen never agreed to the admission of liability, and has in fact started her
own action against Goundar.

[17]        
 Counsel relies on Kaler v. Scales 2009 BCSC 457, which in turn
cites Davie v. Wilson, 2007 BCSC 1876 for the proposition that where
inadvertence is established, an application to withdraw an admission in
pleadings will be decided on a simple balance of prejudice and the interests of
justice.

Counsel for the defendants also refers to Can Am Produce
v. Moradian [1996] B.C.J. No. 2055 in which the Court of Appeal stated
that a party should not be prevented from having a trial on the merits where
the only prejudice to the opposing party is being deprived of relying on an
admission occasioned through solicitor inadvertence.

Prejudice and delay

[18]        
Counsel for the defendants says the balance of prejudice is in Nguyen’s
favour.  The admission of liability was made without her knowledge, will
prevent her from defending the claim on the merits, and may affect her ability
to prosecute her own action against Goundar.

[19]        
On the other hand, the plaintiff would have had to incur the cost of
medical reports in any event, since quantum of damages was always in issue, and
there is adequate time in the trial estimate to allow the issue of liability to
be tried in July of this year.  While Goundar says she is having difficulty
locating the witness Maharajh, she did not file her claim for two years, and a
further eight months followed before the admission of liability was made.  She
could have made efforts to locate the witness in that time.

[20]        
Counsel points to the Notice of Civil Claim in which, although liability
is admitted, contributory negligence is also pleaded, which should have given
Goundar an indication that the facts of the collision might be in issue to some
extent.

[21]        
Counsel for the defendants says his client would not oppose the
reactivation of the claim against Stewart if the admission is withdrawn,
despite the expiration of the limitation period.

PLAINTIFF’S POSITION

[22]        
The plaintiff says she entered into an agreement with the defendants –
they would discontinue against Stewart in exchange for an admission of
liability by Nguyen.  There was an exchange of consideration and a binding
contract, and they have acted on it.  Unless there was fraud, duress, lack of
capacity or mutual mistake, that is the end of the matter, and the defendants
are estopped from resiling from their position.

[23]        
Alternatively, if the analysis is done under the Rules, the plaintiff
says the defendant Nguyen has not met the test to permit withdrawal of the
admission.

Triable issue

[24]        
Goundar says ICBC looked into this matter thoroughly and was prepared to
admit liability.  When the lawyer decided that the proposal for the exchange of
the discontinuance in return for the admission of liability should not be made,
there was no new information that had come to light.  Just because the lawyer
took a different view after speaking to Stewart does not mean there is a
triable issue.

Inadvertence

[25]        
Goundar says the admission was not made inadvertently.  It was made
deliberately, and was not based on any new information.

Were the facts in the defendant’s knowledge?

[26]        
Goundar says Nguyen’s knowledge is not relevant.  ICBC has exclusive conduct
of the litigation under s. 74.1 of the Insurance (Vehicle) Regulation to
the Insurance (Vehicle) Act, and has always had the same information
available to it.

Prejudice and delay

[27]        
Goundar says there has been delay.  It has been 14 months since the admission
was made, and ICBC began threatening to withdraw the admission in October of
2011.  The application was not filed until January of 2012 and has now been
heard less than four months before trial.

[28]        
Goundar says she has been conducting the litigation in reliance on the
admissions.  She could be exposed to substantial costs for incurred
disbursements if she now faces the risk of an adverse finding on liability. 
Because of the time limits in the rules she has been forced to set medical
examinations and request reports as if liability were not in issue.

[29]        
She says it would not be possible to reactivate the claim against
Stewart in any practical sense at this late date.

[30]        
Goundar says she did not investigate liability due to the admission.  Maharajh,
the witness who gave the statement to the police which formed the basis of the
ticket issued to Nguyen, has not been located despite extensive efforts to do
so.  Those efforts commenced in November of 2011, after the conversation at the
mediation in which the issue of the withdrawal of the admission arose.

[31]        
Goundar deposes that she has suffered emotional upset as a result of
this change in ICBC’s position.  As well, she faces possible further delay if
the trial must be adjourned due to the issue of liability being added.

[32]        
As for the allegation of contributory negligence, Goundar points out
that the amended pleading admits that Nguyen is solely responsible for
the collision.  She also refers to the settlement agreement.  To be fair,
counsel for the defendants does not press this point.

[33]        
As for prejudice to Nguyen, Goundar says there is none.  The admission
of liability is made for this action only.  If it was made without her
knowledge or instructions, it will likely not be held against her in her own
action (Caviglia v. Tenorio (1992) 71 B.C.,L.R. (2d) 255 (S.C.)).  In
any event, she is held to the bargain made by her solicitor (Baldissera et.
al. v. Wing et. al. 2000 BCSC 1788).

REPLY

[34]        
As a general response to the plaintiff’s submissions and case law, counsel
for the defendants says the key difference in this situation is that the lawyer
admits she made a mistake.  She admitted liability contrary to her
instructions.  Goundar replies that the agreement cannot be undone, despite
this admitted error.  Goundar has relied on the admissions, the prejudice to
her is too great, and the remedy for ICBC or Nguyen is to sue the lawyer.

THE LAW

[35]        
Rule 7-7(5) provides:

A party is not entitled to withdraw…

(c) an admission made in a pleading…

except by consent or with leave
of the court.

[36]        
The cases to which I was referred dealing with withdrawal of admissions
treat admissions made by inadvertence with caution.  Many of the cases deal
with deemed admissions through failure to respond to a Notice to Admit.  However,
the considerations remain the same.  The court will consider if the admission
was made inadvertently, if it is in the interests of justice to allow the issue
to be resolved by a trial, and if there will be no prejudice to the party which
cannot be compensated by costs.  If satisfied of those factors, leave to
withdraw such an admission will generally be granted. (Abacus Cities Ltd. v.
Port Moody [1980] B.C.J. No. 1749 and cases cited therein).

[37]        
The balancing of the interests of justice requires the applicant to show
that there is a triable issue in respect of the admission.  The chambers judge
must not make a final determination, but will simply determine if there is an
issue worthy of being tried.  Prejudice resulting only from the benefit of
relying on the admission occasioned by the inadvertence is not of significance (Can-Am,
supra).

[38]        
La v. Le 25 B.C.A.C. 12, a judge of the Court of Appeal in
chambers refused leave on the appeal of a decision of this court upholding a
decision of a master to allow withdrawal of a pleading.  It is somewhat similar
to the present situation.  Counsel for the defendants had admitted liability in
their Statement of Defence on behalf of the driver in a motor vehicle action. 
Thereafter, they became aware of facts that tended to show that the passenger
in the front seat had interfered with the driver.  They sought leave to
withdraw the admission of liability after the expiry of the limitation period
and ten months after the subject had first been mentioned.  Discoveries had
been held and the trial was set to commence in two months.  The court said:

…in the end the matter had to be decided by weighing the
prejudice to the plaintiffs in reopening an issue previously closed by
admissions, on the one hand, against the injustice which might result, on the
other, if the defendant or his insurer were prevented from obtaining a decision
of the court on the merits, as they might be established by evidence.

In these circumstances the
prejudice to the plaintiffs in the granting of the application is essentially
in the delay imposed on them in getting the actions on for trial, and
particularly the loss of the trial dates.  This can, or course, be compensated
for by pre-judgment interest.

[39]        
The plaintiff relies of Phil Whittaker Logging Ltd. v. B.C. Hydro
(1985) 65 B.C.L.R. 384 to import the doctrine of promissory estoppel into the
present analysis.  In that case, liability was denied in the pleadings, but
counsel for the defendant then informed the plaintiff that liability would be
admitted.  When new counsel assumed conduct of the file, she advised
plaintiff’s counsel that the defendant wished to contest liability.  The
plaintiff took out a motion for judgment and the defendant raised the issue of
withdrawal of the admission.  The chambers judge refused to grant leave to
withdraw the informal admission.  Noting at para. 8 that there was no
contention that the admission was made hastily, inadvertently, or without full
knowledge of the evidence, he said at para. 17:

Although the prejudice to the
defendant is considerable if the admission stands, where the admission is made
with full knowledge of the consequences and acted upon by the plaintiff for a
period as long as two years, as here, to permit the withdrawal of the admission
at this late stage is contrary to all principles of fairness. Justice requires
that a party be kept to his agreement unless that agreement has been obtained
by fraud, duress or mistake.

[40]        
The chambers judge went on to consider promissory estoppel in the
context of the plaintiff’s motion for judgment.  He decided that the doctrine
acted as a shield to the plaintiff as it prevented the defendant from asserting
its legal right to put the plaintiff to proof of the allegation of negligence. 
This permitted the granting of judgment, and allowed the court to move on to
assess quantum of damages.

[41]        
In Boyd v. Brais, 2000 BCSC 404, and Rohling v. Proudman, [1998]
B.C.J. No. 1383, cases referred to by the plaintiff, the court refused to
permit the withdrawal of admissions in cases where subsequent counsel or an adjuster
took a different view of the facts.  In each case the court noted that the admission
had not been made inadvertently, hastily, or without knowledge of the facts.

DISCUSSION

[42]        
I am satisfied there is a triable issue on liability, based on the
information put before me as to Goundar’s allegations, potential evidence from
Maharajh, and Nguyen’s ticket on the one hand, and Nguyen’s and Stewart’s
evidence on the other.  As well, Nguyen has her own action which is still
outstanding.  There is a conflict in the evidence about the collision, which
should be resolved by a trial.

[43]        
Although the plaintiff says the relevant admission was made deliberately
and with no new facts available, that is not borne out by the affidavit
material.  The lawyer has set out clearly how she came to make this admission
in the face of her own assessment of the case and contrary instructions.  She
admits she did not remember her instructions had changed and she did not
conduct a review of the file before following a prompt from her paralegal to
follow up on ICBC’s original letter.  The initial suggestion by ICBC to canvass
plaintiff’s counsel regarding the proposal was made without the benefit of Mr. Stewart’s
evidence, and the relevant instructions not to admit liability were in place at
the time the lawyer amended the Response to admit liability.  I am satisfied
that the defendant has demonstrated that the admission was made inadvertently.

[44]        
As for the balancing of prejudice, nothing irrevocable has been done
that cannot be compensated for in costs.  The interests of justice require that
this unfortunate situation be set back on track rather than allow the Goundar
action to proceed on an untested and possibly erroneous foundation which has
come about as a result of a mistake.

[45]        
If the admission of liability is left in place, the possibility of
future remedies exists through an action by ICBC against the lawyer, and also
possibly by Nguyen against ICBC for failure to defend her in this action. 
However, that is not a satisfactory approach.  Goundar’s action would still be
predicated upon a mistaken admission, and the interests of justice are not
served by failing to rectify a mistake in circumstances where any prejudice can
be compensated for in costs.

[46]        
The delay in bringing the application, once the lawyer became aware of
her mistake, is not inordinate.  The trial date is four months away, which
allows time for additional discovery.  While the deadline for expert reports is
approaching, any prejudice arising from that factor can be compensated for in
costs, as set out below.

[47]        
Goundar says this case is taken outside the usual bounds of withdrawals
of admissions by the bargain she struck – discontinuing the action against
Stewart in exchange for an admission of liability on behalf of Nguyen.  The
defendants must be held to their bargain.  However, the Court of Appeal held in
Drake (Guardian ad litem of) v. Clark (1996) 31 B.C.L.R. (3d) 289 that
it is no longer necessary for the doctrine of promissory estoppel to be invoked
in applications to withdraw admissions.  Withdrawal may be made if it is in the
interest of justice.  As well, in this case, unlike Phil Whittaker Logging
Ltd., supra, and the other cases referred to by the plaintiff, the admission
was made inadvertently.

RESULT

[48]        
The defendants are permitted to withdraw the admission of liability on
behalf of Nguyen.  The actions must proceed to trial.  However, the plaintiff
cannot be put in a worse position by the lawyer’s mistake.  Therefore all costs
and disbursements incurred as a consequence of the mistake are to be paid by the
defendants, who are, for all practical purposes, ICBC.  That is, if the
plaintiff is able to establish that she incurred costs because of the admission
of liability that she would not otherwise have incurred, ICBC will be
responsible for those costs and disbursements.

[49]        
If the trial has to be adjourned as a result of the withdrawal of the
admission of liability, the plaintiff may have to obtain updated reports at
additional cost.  ICBC will be responsible for those costs and disbursements,
insofar as they were occasioned by the mistake.

[50]        
On the material before me, it is not clear why Stewart was included as a
party in the first place, but if Stewart is, in the plaintiff’s view, a
necessary party, I will order him added, which I understand counsel for the defendants
is instructed to consent to.

[51]        
Despite the success of the defendant Nguyen’s application to withdraw
the admission, the application was necessary only because of the lawyer’s
error.  Therefore the plaintiff is entitled to the costs of this application at
Scale B.  Those costs are not payable by Nguyen.  ICBC will arrange for the payment
of the plaintiff’s costs.

HEARING TRIALS TOGETHER

[52]        
There is a further application in the chambers record to have the
Goundar and Nguyen actions tried together.  Counsel for Goundar takes the
position that that application should be heard at a subsequent time.  Counsel
for the applicant did not press to have that application argued before at the
hearing of the motion to withdraw the admission.

[53]        
It seems common sense that liability should be determined once, but
counsel did not address this application except in passing.  Therefore it is
adjourned generally, but can be brought on before me at 9:15 any morning
subject to the convenience of counsel.  If more appropriate to bring it to
regular chambers, I am not seized.

“M.A. Humphries J.”
The Honourable Madam Justice M.A. Humphries