IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20130326

Docket: 46340

Registry:
Vernon

Between:

Alasdair Robert
Coombs

Plaintiff

And

Janis Lillian LeBlond
and Glenn Bernard LeBlond,
Executors of the Estate of Lillian Eva LeBlond,
and the Estate of Lillian Eva LeBlond

Defendants

Before:
The Honourable Mr. Justice Betton

Reasons for Judgment

[1]            
The defendants apply for dismissal of the plaintiff’s claim pursuant to
Rule 9‑6, or alternatively Rule 9‑7 of the Supreme Court Civil
Rules.

[2]            
The plaintiff’s claim is for injuries arising out of a motor vehicle
collision. The writ of summons and statement of claim were filed more than two
years after the date of the collision. A representative of the Insurance
Corporation of British Columbia (“ICBC”) sent correspondence to the plaintiff
approximately 22 months after the collision. The issue before this court is whether
the letter and/or its enclosures have the effect of extending the limitation
period for the commencement of the plaintiff’s claim.

Background

[3]            
The motor vehicle collision occurred on February 6, 2007. The plaintiff
was driving east on Highway 97 near Vernon, and alleges that the deceased,
Lillian Eva LeBlond, negligently crossed the highway into the path of the
plaintiff, causing the collision. She died in the collision.

[4]            
 The deceased’s vehicle was insured, and ICBC assumed conduct of the claim
from the outset. Management of the file was transferred to Mr. Doug McCrae,
an adjuster employed by ICBC, on or about May 20, 2008.

[5]            
The plaintiff was aware that he had received physical injuries in the
collision almost immediately. He also became aware of changes to his
psychological well being, and drew a connection between those changes and the
emotional trauma of the accident. It is not necessary for me to make any
findings on the question of causation or as to the severity of any symptoms,
but the fact that the plaintiff was alleging that connection was made known to
representatives of ICBC by February 13, 2007.

[6]            
According to the ICBC file notes introduced into evidence, the first
time that possible settlement of the plaintiff’s claim for his injuries was
raised was on May 23, 2007. This specific note reads:

… I broached settlement but he was not interested
at all, not until the hand issue is resolved.

[7]            
ICBC representatives revisited the possibility of settlement on other
occasions. On February 4, 2008 the plaintiff flatly rejected an offer of
$12,500. He rejected an offer of $25,000 on February 12, 2008, suggesting at
that time that the minimum he would consider would be $200,000. ICBC’s file
notes indicate that on March 6, 2008 the plaintiff inquired about settlement
and was told that ICBC had not wavered from the $25,000 offer.

[8]            
After assuming conduct of the file, Mr. McCrae confirmed the $25,000
proposal on May 21, 2008.

[9]            
On December 8, 2008 Mr. McCrae sent a letter to the plaintiff
enclosing a cheque in the amount of $25,000 together with a document titled “Claim
Payment Proposal”. The letter was marked “WITHOUT PREJUDICE”. The plaintiff did
not execute the claim payment proposal document and did not deposit the $25,000
cheque until sometime after March 5, 2009.

Issues and Positions of the Parties

1.       Did the letter of December 8, 2008 constitute a confirmation of the
plaintiff’s cause of action?

[10]        
Both parties agree that the collective effect of the letter and the
enclosures was to confirm the cause of action, if in fact it is admissible.

2.       Is the letter of December 8, 2008 admissible evidence for purposes
of confirming the cause of action?

[11]        
The defendants say that the plaintiff cannot rely on the December 8,
2008 correspondence as evidence of the defendants’ confirmation of the cause of
action because the communication was “without prejudice”.

[12]        
The plaintiff argues that the correspondence is admissible for that
purpose, given the content of the letter.

Analysis

[13]        
There is no question that the applicable limitation period, pursuant to
the Limitation Act, R.S.B.C. 1996, c. 266 is two years. Section 5
of the Act is as follows:

5 (1) If, after time has begun to run with respect to
a limitation period set by this Act, but before the expiration of the
limitation period, a person against whom an action lies confirms the cause
of action, the time during which the limitation period runs before the date of
the confirmation does not count in the reckoning of the limitation period for
the action by a person having the benefit of the confirmation against a person
bound by the confirmation.

(2) For the purposes of this section,

(a) a person confirms a cause of
action only if the person

(i) acknowledges a cause of action,
right or title of another, or

(ii) makes a payment in respect of
a cause of action, right or title of another,

…

(emphasis added)

[14]        
The letter of December 8, 2008 is addressed to the plaintiff. It is
marked with the words, “WITHOUT PREJUDICE”. The body of the letter reads as
follows:

This letter is further to our past discussions about your
claim. I understand that you have some reluctance to conclude this matter.

However we believe that we have made you a reasonable offer
of settlement for your claim.

At this we would like you to have access to the funds that we
feel represents a fair settlement. Therefore I am providing you with a
Settlement Proposal Document as well as our cheque in the amount of $25,000.00

I would ask that you sign this settlement proposal document
and return it to us as acknowledgment of receipt of these funds. As is outlined
on the form, you may continue to pursue further claims, if you wish.

I thank you for your assistance
and I look forwarding to hearing from you.

[15]        
As indicated, the letter attached a cheque in the amount of $25,000
payable to the plaintiff. The referenced “Settlement Proposal Document” says:

This payment is being tendered by ICBC as a fair and
reasonable assessment of the above-noted claim.

I, Alasdair Coombs, have made a claim for injuries
against Lillian LeBlond (the other owner(s)/driver(s)) with respect to a
motor vehicle accident which occurred on February 6, 2007.

ICBC has agreed to make a payment with respect to my bodily
injury claim for the amount of $25,000.00 in addition to any previous
advance payments made by ICBC. The total of all previous advance payments plus
the present payment is $25,625.31 (the “total payment”).

I acknowledge receipt of the total payment. However, I do not
agree that it fully compensates me for the value of my claim.

By signing this form, I confirm that I understand the
following:

1.         If I
sue the other owner(s)/driver(s), the total payment will be deducted from any
judgment I may obtain. The total payment will be applied to the judgment as
follows:

a)         first, toward past wage
loss;

b)         second, toward special
damages;

c)         third, toward any other
pecuniary damages;

d)         finally, the excess, if
any, toward non-pecuniary damages.

2.         If I
sue the other owner(s)/driver(s) and a court awards me less than the amount of
the total payment, I will not be required to repay ICBC the difference.

3.         If I
sue the other owner(s)/driver(s) and a court awards me less than the amount of
the total payment, ICBC may ask the court to order me to pay the costs of the
litigation because I was not successful in recovering more money than I have
already been paid by ICBC.

4.         The
total payment, or any part of it, is not an acknowledgment of a cause of action
by the other owner(s)/driver(s) or ICBC, and does not waive or extend any
existing limitation period that applies to my claim.

I have read this document and confirm that I understand its
contents.

…

[16]        
Counsel for the defendants properly concedes that the content of the
communication does constitute a confirmation of the plaintiff’s cause of
action. The issue is its admissibility, and on that point the defendants rely
upon the decision of the British Columbia Court of Appeal in Belanger v.
Gilbert (1984), 14 D.L.R. (4th) 428. Like this case, the court there was
called upon to determine whether a letter from an ICBC claims adjuster to
solicitors for the plaintiff was a confirmation of the cause of action. The
court held at paras. 6 through 8 as follows:

6 The letter was not written without
prejudice, but counsel in his able argument put to us that all conversations or
communications with respect to settlement must be deemed to be without
prejudice. Even if the letter had been marked as without prejudice it would
not, in my judgment, assist the appellant in this case. Not all letters so
marked are to be held inadmissible. I refer to the judgment of this court in Schetky
v. Cochrane et al., [1918] 1 W.W.R. 821, 24 B.C.R. 496, and the judgment of
Mr. Justice Martin at p. 827. On that page Mr. Justice Martin
referred to the case of Re Daintrey, Ex p. Holt, [1893] 2 Q.B. 116,
in which he said:

… it was held that an admission
of bankruptcy may be proved in a letter from the debtor to the creditor, though
marked "without prejudice" …

7 And he quoted from the judgment saying:

"In our opinion the rule which
excludes documents marked ‘without prejudice’ has no application unless some
person is in dispute or negotiation with another, and terms are offered for the
settlement of the dispute or negotiation …"

8 Mr. Justice Martin went on:

This lays it down that before the privilege arises two
conditions must exist, viz.: (a) a dispute or negotiation between two or
more parties; and (b) in which terms are offered …

[17]        
Belanger was later applied by this court in the decision of Rogic
v. Ginn, [1996] B.C.J. No. 2689. In Rogic the court was
considering two letters, each of which was marked as being “without prejudice”.
The first letter included $5,000 and a full and final release. The body of the
letter indicated that it had been sent for the purposes of reaching terms for
settlement; that it was intended to be an all inclusive settlement; and,
requested that the release be signed and witnessed and returned. Subsequently,
the adjuster sent a further letter pointing out that the limitation period was
about to expire and stating:

… We hope we will be able to
reach a settlement with you before the end of the limitation period. But if we
cannot, you will have to issue a legal document called a “writ”. …

[18]        
The court referred to the above-quoted passage from Belanger. In
addition, it pointed out the subjective intention of the author of
communication is not determinative of its effect on the limitation period. It
is the objective interpretation that must be considered.

[19]        
The court stated at paras. 30 to 32 as follows:

30 I am satisfied on the authority Belanger
that the letter of November 5, 1993 is privileged and therefore not admissible
to establish a confirmation of the cause of action.

31 The cheque tendered with that letter is
equally not admissible and does not constitute an acknowledgement of the cause
of action since it is qualified by the accompanying correspondence. The whole
of the correspondence must be considered together.

32 In reference to
the letter dated July 11, 1994, although it was marked "Without
Prejudice", that designation taken alone does not necessarily make it
privileged. The letter did not contain any terms of settlement and accordingly
in my view it is not privileged. The purpose of the letter clearly was to warn
the plaintiff of the impending limitation expiry. It indicates the possibility
of settlement but nothing more. To that extent it is similar to the letter
considered by the Court of Appeal in Farrell.

[20]        
This analysis is a helpful interpretation and application of the
comments of the Court of Appeal in Belanger. What is stressed is whether
the communication contains “terms of settlement”.

[21]        
Belanger remains the law with regard to whether alleged “without
prejudice” communications in connection with a settlement are privileged.

[22]        
The purpose of the rule referred to in paragraph 7 of Belanger is
discussed by the British Columbia Supreme Court in Sidhu v. Grewal (1986),
24 D.L.R. (4th) 467 at paragraph 12:

12        Vaughan Williams J., for the Court of Appeal, found
the letter admissible and expounded these reasons (at pp. 119-20):

In our opinion the rule which
excludes documents marked "without prejudice" has no application
unless some person is in dispute or negotiation with another, and terms are
offered for the settlement of the dispute or negotiation, and it seems to us
that the judge must necessarily be entitled to look at the document in order to
determine whether the conditions, under which alone the rule applies, exist.

The rule is a rule adopted to
enable disputants without prejudice to engage in discussion for the purpose of
arriving at terms of peace, and unless there is a dispute or negotiations and
an offer the rule has no application. It seems to us that the judge must be
entitled to look at the document to determine whether the document does contain
an offer of terms. Moreover, we think that the rule has no application to a
document which, in its nature, may prejudice the person to whom it is
addressed. It may be that the words "without prejudice" are intended
to mean without prejudice to the writer if the offer is rejected; but, in our
opinion, the writer is not entitled to make this reservation in respect of a
document which, from its character, may prejudice the person to whom it is
addressed if he should reject the offer, and for this reason also we think the
judge is entitled to look at the document to determine its character. …

(emphasis added)

[23]        
The act of marking a document with the clause “without prejudice” alone
is insufficient to determine whether a document is privileged. Rather, the two
conditions stated in Belanger must be present for a “without prejudice”
letter to be privileged. There must be:

(a)      a dispute or negotiation
between two or more parties, and;

(b)      terms of settlement
offered.

[24]        
There is no issue with condition (a) in the present case. The privilege
issue turns on whether terms of settlement were offered by ICBC in their
letter.

[25]        
In my view, neither the letter of December 8, 2008 nor the attached
claim payment proposal contain such terms. The defendants stress that there are
terms attached, but they are not, in my view, terms of settlement.

[26]        
In Rogic the first letter attaching the full and final release
clearly communicated that the terms of settlement would be payment of $5,000 in
exchange for a full and final release. If that release was signed, the action
was concluded; accordingly, the letter was not admissible.

[27]        
The second letter, as was noted in paragraph 32, did not contain any
such terms and was admissible; however, it did not constitute a confirmation of
a cause of action.

[28]        
The defendants also cite Strassegger v. Harrison Hot Springs Resort
Hotel Ltd., [1999] B.C.J. No. 1878 (S.C.) in support of their position.
I find this case is not helpful to the defendants’ cause. Strassegger
was decided on the ground that the correspondence could not be relied upon as
confirmation of the action, not whether the document was privileged: see paragraph 11.

Conclusion

[29]        
Here the effect of the letter, the cheque, and the claim payment
proposal is to confirm the cause of action. It also informs the plaintiff as to
ICBC’s view that the money represents a reasonable offer of settlement. It does
not, however, impose any terms for the settlement of the action. It provides
only that there be an acknowledgement of the receipt of the monies and that
they would be deducted from any future recovery.

[30]        
In my view, even if the plaintiff had executed the claim payment
proposal, the terms contained in it are not the sort of terms contemplated by
the Court of Appeal in Belanger or this court in Rogic as being terms
of settlement of the dispute or negotiation.

[31]        
Accordingly, the application of the defendants is dismissed.

[32]        
The parties have not made any submissions as to costs. Either party is
at liberty to bring that issue back before me but in the absence of that the
plaintiff should have his costs of this application at Scale B of Appendix B.

"D.A.
Betton J."
The Honourable Mr. Justice Betton