IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20130905

Docket: M061223

Registry:
Vancouver

Between:

Lovleen Kaur
Dhaliwal

Plaintiff

And:

Elise Nuff

Defendant

And:

Insurance
Corporation of British Columbia

Third
Party

Before:
The Honourable Mr. Justice Weatherill

Reasons for Judgment

Introduction

[1]            
The plaintiff applies pursuant to R. 3-2 of the Supreme Court Civil
Rules for an order that the writ of summons and statement of claim filed
March 31, 2006, be renewed for a period of two months.

[2]            
The application is opposed by the third party, the Insurance Corporation
of British Columbia (“ICBC”).  The defendant, Elise Nuff, did not appear
despite having been served with the notice of application and supporting
materials.

Background

[3]            
This action concerns a motor vehicle accident that occurred on February
14, 2005 when a vehicle being driven by the defendant allegedly entered an
intersection against a red light and struck the plaintiff’s vehicle.  The
defendant was charged with disobeying a red light and driving without a valid
driver’s licence.

[4]            
On February 15, 2005, the defendant reported the accident to ICBC.  She
provided a statement to ICBC on March 13, 2005.

[5]            
The plaintiff retained counsel on August 10, 2005 and commenced this
action on March 31, 2006.

[6]            
On April 3, 2006, plaintiff’s counsel wrote to the defendant enclosing
copies of the writ of summons and statement of claim.  The letter was sent to 3530
Alcan Road, Kelowna, B.C., an address for the defendant provided to plaintiff’s
counsel by ICBC.  Unbeknownst to plaintiff’s counsel, that address was a post
office box.

[7]            
On June 20, 2006, a legal assistant in the plaintiff’s counsel’s office
received a telephone call from a woman who advised that she had received a copy
of the writ of summons and statement of claim in this matter and asked what steps
she needed to take.  She was advised to seek legal advice.

[8]            
On July 13, 2006, ICBC filed a third party notice pursuant to s. 77 of
the Insurance Vehicle Act, R.S.B.C. 1996, c. 231, alleging that the
defendant was in breach of her insurance contract.  It subsequently filed a statement
of defence to the third party notice in which liability for the plaintiff’s
injuries was denied.

[9]            
ICBC’s attempts to serve the defendant with the third party notice and
its statement of defence were unsuccessful.  Substituted service was ultimately
effected on April 5, 2007 by leaving a copy of those documents with an adult
person at an address on Salt Spring Island and by mailing copies by regular
mail to the same address.  The affidavit of service deposed that the adult
person at that Salt Spring Island address was a woman who identified herself as
“Elsie Bellamy” and confirmed that the defendant, “Elise Nuff” lived at the
same address.

[10]        
The trial of the action, originally scheduled to commence on October 27,
2008 was adjourned by consent because the plaintiff was involved in a second
motor vehicle accident on September 25, 2008.

[11]        
On April 12, 2010, an action was commenced by the plaintiff in respect
of the second accident.  By consent order dated January 24, 2011, the two
actions were ordered to be tried at the same time.  The trial of the two
actions was scheduled for December 3, 2012.

[12]        
In early November 2012, during the course of his preparation for trial,
ICBC’s counsel advised plaintiff’s counsel that he had no record of the
defendant in this action being served.  The issue of service was a preliminary
matter heard at the opening of the trial.  The trial judge, Mr. Justice Funt,
held that the defendant had not been properly served.  The trials were
adjourned.

[13]        
Mr. Justice Funt ordered that any application to renew the writ of summons
should be brought with notice to the defendant.

[14]        
Several weeks later, after initially proceeding to prepare the necessary
materials for an application to renew the writ of summons, counsel for the plaintiff
recognized the potential for a claim being made against him.  He arranged for
the appointment of independent counsel, who is counsel on this application.  In
early January, 2013, after the Christmas break, she received and reviewed the
file and filed this application to renew on March 5, 2013.  The hearing was
originally scheduled for March 18, 2013 but with the consent of ICBC’s counsel,
it was adjourned to April 11, 2013.

[15]        
Since then, events unfolded that have put a new gloss on the foregoing
facts.  Those events are the reason it took from April 11, 2013 until August
23, 2013 for this application to be heard.  The following is a summary of those
events:

a)    on March 24,
2013, a private investigator personally served the defendant with the relevant
pleadings and application materials while she was in a motor home in Hope,
B.C.  As he was leaving, the investigator heard her say “how did he find me?” 
The application materials disclosed that the hearing of this application was
scheduled for April 11, 2013.  The defendant did not appear;

b)    the plaintiff’s
private investigators became suspicious that the person ICBC had served
substitutionally on April 5, 2006 with the third party notice and statement of defence
was likely the defendant who was using a different name, Elsie Bellamy;

c)     on May 19,
2013, a private investigator personally served the defendant at a motor home in
Victoria B.C. with the various materials regarding an application by the
plaintiff for production by ICBC of its CWMS files (chronicling the contact it
had with the defendant) and to search its data base for a record of the birth
dates and photographs of both Elise Nuff and Elsie Bellamy.  The defendant did
not appear at the hearing of the application.  Master Taylor ordered production
of those documents;

d)    the CWMS records
disclosed that the defendant was likely being evasive with ICBC.  The data base
search revealed that Elsie Bellamy and Elise Nuff were born on the same day. 
Photographs revealed that Elise Nuff and Elsie Bellamy had virtually identical
likeness;

e)    it appears that
three days after ICBC’s counsel telephoned the defendant on November 30, 2012,
she obtained a new telephone number; and

f)      on
August 21, 2013, a private investigator personally served the defendant in
Abbotsford, B.C. with the notice of hearing and relevant materials in respect
of the hearing of this application scheduled for August 23, 2013.  She did not
appear and did not file any materials to oppose this application.

Analysis

[16]        
Rule 3-2 of the Rules provides as follows:

Renewal of original
notice of civil claim

(1) An original notice of civil claim does not
remain in force for more than 12 months, but if a defendant named in a notice
of civil claim has not been served, the court, on the application of the
plaintiff made before or after the expiration of the 12 months, may order that
the original notice of civil claim be renewed for a period of not more than 12
months.

Further renewal of
notice of civil claim

(2) If a renewed notice of civil claim has not
been served on a defendant named in the notice of civil claim, the court, on
the application of the plaintiff made during the currency of the renewed notice
of civil claim, may order the renewal of the notice of civil claim for a
further period of not more than 12 months.

When renewal period
begins

(3) Unless the court otherwise orders, a
renewal period ordered under subrule (1) or (2) begins on the date of the
order.

After renewal of
notice of civil claim

(4) Unless the
court otherwise orders, a copy of each order granting renewal of a notice of
civil claim must be served with the renewed notice of civil claim, and the
renewed notice of civil claim remains in force and is available to prevent the
operation of any statutory limitation and for all other purposes.

[17]        
The parties are in agreement that the factors to be considered by
a court when exercising its discretion as to whether or not to renew a writ of
summons were those set out by this court in Bearhead v. Moorhouse (1977),
3 B.C.L.R. 81 (S.C.), (appeal dismissed (1978)
5 B.C.L.R. 380 (C.A.)) (at paras. 13 -17):

a)
whether the application was made promptly;

b)
whether the defendant had notice of the claim before the writ
expired;

c)
whether the defendant was prejudiced;

d)
whether the failure to effect service was attributable to
the defendant; and

e) whether
the plaintiff, as opposed to his/her solicitor, was at fault.

[18]        
The focus in such an application is the interests
of justice: Weldon v. Agrium Inc., 2012 BCCA 53 at para. 37.

a.     Was
the Application made promptly?

[19]        
In considering whether an application to renew a writ of
summons has been made promptly, the court examines the time that has elapsed since
the plaintiff learned the writ had not been served: Fast Fuel Services Ltd.
v. Michelin North America (Canada) Inc., 2008 BCCA 216 at para. 16.

[20]        
Plaintiff’s counsel submits that, while the plaintiff’s former counsel ought
to have known that the defendant was not served, he did not realize there was
an issue regarding service of the defendant until early November 2012 when he
was alerted to that fact by counsel for ICBC.  The issue of whether valid
service had taken place was decided in the negative by Funt J. at the opening
of the trial on December 3, 2012.  The plaintiff herself was unaware that there
was any issue in this regard until later that same day when she was advised by
her counsel that the trial was adjourned because of defective service and that
a renewal application would have to be made.  The plaintiff submits that the
application, filed on March 5, 2013, was made within a reasonable period of
time after Funt J.’s ruling in early December 2012.

[21]        
Counsel for ICBC submits the time period that should be considered is
from the date the plaintiff or her counsel knew or ought to have known
that the writ had not been served.  He says that plaintiff’s counsel ought to
have known in 2006 that service had not been validly effected under the Rules. 
Alternatively, he ought to have known as of November 2006 when he became aware
that ICBC’s attempted service of the defendant had been unsuccessful.  He submits
that a routine review of the file by plaintiff’s counsel would have alerted him
to the fact that valid service had not taken place.  Finally, he argues that
the delay from early November 2012 to early March 2013 (four months) in
bringing this application was unreasonable.

[22]        
While I agree that plaintiff’s counsel ought to have realized in 2006
that the defendant had not been properly served, the time period for assessing
whether an application to renew has been made promptly is when the plaintiff or
her counsel became aware that the writ had not been served: Imperial
Oil Ltd. v. Michelin North America (Canada) Inc. 2008 BCCA 216 at paras.16 –
17; LaMarche v. Hamilton, 1998 CanLII 5247 (BC SC). 
If the time period began to run from the time when the plaintiff or her counsel
ought to have known that the writ had not been served, the entire rationale for
this factor would be defeated.  A party cannot be expected to take steps to
apply for a renewal of the writ if he/she has no knowledge of the need to do
so.  A party is required to act promptly upon becoming aware of the problem,
not when he/she is unaware of it.

[23]        
In my view, the application to renew was made within a reasonable period
of time after plaintiff’s counsel became aware of his error.  He recognized the
need for and retained independent counsel.  The application was made promptly
by independent counsel after she had an opportunity to take instructions,
review the file and prepare the materials.  I agree with plaintiff’s counsel
that as matters unfolded, had the application been made any sooner, the facts
that subsequently came to light may well have never been known.

b.    Whether
the Defendant had Notice of the Claim Prior to the Writ Expiring

[24]        
The plaintiff submits that by virtue of the defendant’s involvement in the
accident, taken together with her provision of a statement regarding the
accident to ICBC, she would have been aware that an action against her would likely
be commenced.  Moreover, the writ of summons and statement of claim were mailed
to the defendant at the address provided for her by ICBC, which would have come
from either or both of her driver’s license and/or the statement she provided
to ICBC.  Plaintiff’s counsel’s office received a telephone call from a woman
advising that she had received these pleadings.

[25]        
Most importantly, given the overwhelming evidence that “Elsie Bellamy”
and the defendant are one and the same person, it is highly probable that the
defendant had notice of the claim by at least April 5, 2007 when “Elsie
Bellamy” was personally served with the third party notice and ICBC’s statement
of defence at her home on Salt Spring Island.

[26]        
Counsel for ICBC submits that there is no evidence indicating the defendant
was aware of the claim before it expired on March 31, 2007.  He argues that the
statement made to ICBC and the substituted service upon the defendant of the third
party notice and statement of defence are not adequate proof of the defendant’s
awareness of the claim.

[27]        
I agree with counsel for the plaintiff that, given the writ of summons
and statement of claim were mailed to the address the defendant provided to
ICBC and given that shortly thereafter a woman telephoned plaintiff’s counsel’s
office advising they had been received and asking what she should do, a
reasonable inference can be drawn that the caller was the defendant and that
she was aware of the claim before the writ expired.  Moreover, given the uncontroverted
evidence of the defendant’s deliberate evasion of this claim, the hearsay
evidence of her statements to an associate within ICBC’s counsel’s office on
November 30 2012 to the effect she was surprised to learn that she was named as
a defendant in this action has little probative value.  The defendant was
served with various notices of applications and supporting materials three
times.  Her reaction to the first personal service upon her was to remark “how
did he find me?”  She responded to being served on May 19, 2013 by “kicking the
documents from the steps onto the pavement and closed the door”.  There is no
evidence of any adverse reaction to her being served on August 21, 2013.

[28]        
The defendant has clearly demonstrated a complete lack of interest in
this proceeding and no intention of becoming involved.  The question of whether
she had notice of the writ prior to its expiry must be weighed in the context
of this conduct.

[29]        
In my view it is more probable than not that the defendant had notice of
the claim prior to March 31, 2007.

[30]        
Regardless, I am persuaded by plaintiff’s counsel that, in considering
this factor, the court should take into account the position the defendant
would have been in had the plaintiff commenced the action shortly before the
two year limitation period expired and not, as was the case here, a full year before
the limitation deadline: see Erickson Estate v. Burmaster 1990 CanLII
1086 (S.C.) at 4 and 5.

[31]        
Here, the accident occurred on February 14, 2005.  The plaintiff had
until February 14, 2007 to commence her action.  Had it been commenced on
February 13, 2007, the writ of summons would not have expired until February
13, 2008.  The defendant had notice of the claim as early as April 5, 2007.

c.     Will
the Defendant be Prejudiced?

[32]        
There is no evidence that the defendant will be prejudiced if the writ
is renewed.  However, ICBC submits that there is no onus on the defendant to
show particular prejudice and that prejudice is to be presumed from the mere passage
of time: Grant v. G&A Developments Ltd. [1992] B.C.J. 1612 (S.C.) at
2; Hutton v. Haberlin, (25 August 2009), Vancouver M064680 (B.C.S.C.); Reid
v. Mutual Life Assurance Co. [1999] B.C.J. No. 388, at para. 28; Mountain-West
Resources Ltd. v. Fitzgerald 2005 BCCA 48 at para. 7; Hudon v. Johnson,
2006 BCSC 1750 at para. 6.

[33]        
The presumption of prejudice is not a presumption of law.  It is a
rebuttable presumption of fact: Tundra Helicopters v. Allison Gas Turbine
2002 BCCA 145 at paras. 35 – 37.  The question remains whether, on a balance of
probabilities, prejudice or the absence thereof, has been established.

[34]        
ICBC argues that deemed prejudice from the passage of time is compounded
by the fact that ICBC has taken the position the defendant is in breach of her
insurance contract and has denied coverage.  If the writ is renewed, ICBC says
it may commence a recovery action against the defendant and pursue collection
remedies against her.  The defendant also may be unable to renew her insurance
or driver’s license.

[35]        
The relevant time period for assessing prejudice is from and after the
expiry of the writ: Seeliger v. Eagle Ridge Hospital, 2007 BCCA 582 at
para. 38; Imperial Oil Ltd. v. North America (Canada) Inc., 2008 BCCA
216 at para. 16.  Mere delay is insufficient to show prejudice.  The relevant prejudice
is the delay which imperils the defendant’s ability to mount an adequate
defence to the claim: Seeliger at para. 39.

[36]        
There must be some nexus between the delay and any prejudice that is
shown: Weinlich v. Campbell, 2005 BCSC 1865 at para. 58. Weinlich
was a case that involved an application to add a party as a defendant.  However,
the same principles apply to the renewal of a writ.  The prejudice, presumed or
actual, must have been caused by the plaintiff: McIntosh v. Nilsson Bros.
Inc., 2005 BCCA 297 at para. 10.  The specific prejudice asserted by ICBC
on behalf of the non-appearing defendant relates to her driving a vehicle
without a valid driver’s licence and is not that which flows from the
plaintiff’s delay in service.  The prejudice being advanced was caused in its
entirety by the defendant herself and had nothing to do with the plaintiff or
the delay.  No attempt has been made by ICBC to tie the loss of insurance
coverage to the relevant period of delay.

[37]        
I have found the defendant likely had notice of the claim since at least
April 5, 2007.  Since then, she has not only ignored it but has taken
deliberate steps to evade it.  There is no evidence before me that the
defendant will be unable to mount an adequate defence due to the delay, if she
chooses to do so.

[38]        
A question arose during argument regarding whether ICBC had standing to
argue prejudice on behalf of the defendant. Counsel advised that
there is no reported case in British Columbia where this issue has been
discussed in the context of an application to renew an expired writ. 

[39]        
Section 77(4) of the Insurance (Vehicle) Act provides: 

(4) On being made
a party under subsection (3), the insurer has the right to contest the
insured’s liability to any party claiming against the insured, and to contest
the amount of any claim made against the insured, as if the insurer were a
defendant in the action, including the right to

(a) deliver a
response to civil claim to the claim of any party claiming against the insured,

(b) deliver other
pleadings,

(c) have production
and discovery from any party adverse in interest, and

(d) examine and cross examine witnesses at
trial.

[40]        
Plaintiff’s counsel argues that s. 77(4) gives ICBC
the right to engage in the action as if it was a defendant but not the
defendant.  She argues that s. 77(4) does not give ICBC the rights of the
defendant, including the right to raise the argument that she has been prejudiced. 

[41]        
Plaintiff’s counsel relies on the decision of the
Alberta Court of Appeal in Wennekers v. Kingsway General Insurance Co.,
2009 ABCA 422.  There, the plaintiff pedestrian was struck by the defendant’s
vehicle.  The insurer denied liability under the defendant’s policy.  The
plaintiff applied ex parte for an order to serve the defendant
substitutionally.  The insurer added itself as a third party and applied to set
aside the order for substitutional service.  The Alberta Court of Queen’s Bench
held that the Alberta legislation (equivalent to s. 77) did not give the
insurer standing to bring the application.  The Alberta Court of Appeal agreed:

[7] The chambers judge found that
Kingsway, as third party by order, did not have standing to bring that
application. She held that Rule 27 can only be invoked by the defendant herself
and that s. 635(15) of the Insurance Act is not broad enough to
confer such a right upon an insurer added as a third party by order. The
chambers judge reasoned as follows:

“While a third party
insurance company may have rights as if it were a defendant, this is not the
same as having the ability to exercise the Defendant’s rights. In the present
action, Kingsway might have equal rights to a defendant, but this does
not give them the rights of the Defendant, Aileen Bailey. The rights of
the third party are equal in rank but not identical. The parties remain
distinct. A third party by order is not a replacement for, or counsel or agent
to, any other party. As a result, it is not in the capacity of Kingsway to
bring an application to set aside an Order for Substitutional Service upon the
Defendant, Aileen Bailey.

[12] The defendant and the
insurer may have diverging and even conflicting interests. That being so, the
Court ought not to allow one party to an action (albeit by third party order)
to exercise the rights of another without his or her knowledge or consent; the
interests of the parties, while they will almost certainly align as regards the
plaintiff’s case, are not necessarily identical.

[42]        
In my view, Wennekers is distinguishable
from the situation before me. Wennekers involved an application to set
aside an order for substitutional service.  Rule 27 of Alberta’s Rules of
Court provides that the only party who can apply to set aside service is
the party on whom the service was effected.  That was the basis of the courts’
decisions.

[43]        
In my view, s. 77(4) cannot be construed as narrowly
as plaintiff’s counsel suggests.  It provides that the insurer “has the right
to contest the insured’s liability to any party…”.  Unlike the Alberta
legislation which limits those rights to specific matters, the rights under s.
77(4) are not limited in any way.  Moreover, ICBC is not attempting to exercise
the rights of the defendant.  Rather, it is asserting that the writ should not
be renewed.  If successful, the plaintiff’s claim will be barred and the
defendant’s liability will have been eliminated.  The phrase “contest the
insured’s liability” is broad enough to include asserting that a writ should
not be renewed.

d.    Was
the Failure to Effect Service Attributable to the Defendant?

[44]        
The answer is no.  The failure to effect service was attributable to
counsel for the plaintiff.

e.     Was
the Plaintiff, as Opposed to her Solicitor, at Fault?

[45]        
It is clear that the fault was not that of the plaintiff but was rather
the fault of her then counsel.  He has accepted full responsibility for his
error.

[46]        
Where the fault is attributable to the plaintiff’s solicitor and there
is no prejudice to the defendant, the renewal is usually granted: Lowe v.
Christensen, (1984), 54 B.C.L.R. 88 (C.A.) at para. 93; Johnson v. Cooke,
2000 BCSC 1681 at para. 71; Sutherland v. McLeod, 2004 BCCA 653 at para.
43.

f.     
Interests of Justice

[47]        
Counsel for ICBC submits that, by any measure, the over six year delay
in this case is such that any dispassionate and fully informed reasonable
person would find that a renewal of the writ would bring the administration of
justice into disrepute.  He says that there comes a point in time when every
potential defendant should be entitled to feel secure after a passage of time
from threat of legal action.

[48]        
I agree.  However, this is not a case of a “potential” defendant. 
Rather, it is a case of an action having been commenced against an actual
defendant.  Once the action was commenced, there was no longer any “potential”
that the defendant would be sued.  The issue is whether that actual defendant was
aware of the action.  She plainly was aware of the claim.

[49]        
Only a compelling case of prejudice should defeat an application to
renew unless the plaintiff’s conduct in causing the delay is so egregious that
refusal can be justified: Fast Fuel Services at para. 21.

[50]        
In my view, there is no compelling case of prejudice here.  The failure
to properly serve the defendant was an oversight by plaintiff’s then counsel
that was brought to his attention in early November 2012 when counsel for ICBC,
upon reviewing his file in preparation for trial, raised it.

[51]        
In my view, the circumstances of this case are such that the balancing
of the interests of the parties, taking into account the administration of
justice, favour a renewal of the writ.

Conclusion

[52]        
The writ of summons and statement of claim filed March 31, 2006 are
renewed for a period of two months.

[53]        
Cost will be in the cause.

“Weatherill J.”