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Drews vs Jevco 2000

Indexed as:

Drews v. Jevco Insurance Co.

Between

Barry Drews, plaintiff, and

Jevco Insurance Company, defendant

[2000] B.C.J. No. 1678

2000 BCSC 1236

80 B.C.L.R. (3d) 368

21 C.C.L.I. (3d) 293

98 A.C.W.S. (3d) 1100

Vancouver Registry No. C983853

 British Columbia Supreme Court

 Vancouver, British Columbia

 

Baker J.

(In Chambers)

Heard: March 22, 2000.

 Written submissions: April 6, 2000.

 Judgment: August 16, 2000.

(54 paras.)

Insurance — Automobile insurance — Actions by insured against insurer, defences — Limitation of actions — When time begins to run.

Application by Drews for an order that his action against the defendant Jevco Insurance was not statute-barred. On July 26, 1992 Drews was involved in an accident when he drove a motorcycle in New Brunswick. The motorcycle was insured by Jevco. Drews received temporary benefits from ICBC until September 30, 1997. Drews unsuccessfully attempted to obtain coverage from Jevco. Drews sued ICBC to compel it to continue the benefits. ICBC claimed that Jevco was required to pay the benefits. Neither party joined Jevco to this action. Drews’s action against ICBC was dismissed. The court concluded that Jevco was the primary insurer. Drews sued Jevco on July 29, 1998 for a declaration that it had to pay income replacement, medical and rehabilitation benefits. Jevco claimed that Drews’s action was barred by the expiry of a limitation period contained in section 103 of the Insurance (Motor Vehicle) Act Regulations. The action was not commenced within two years of the date of the accident. It also was not commenced within two years after the date of any benefit payment by Jevco. Jevco submitted that the payments could not come from another insurer. It would be unfair if the limitation period applied to payments from another insurer. Jevco closed its file several years before Drews’s action. It was unaware of ICBC’s payments.

HELD: Application allowed. Drews’s action was not barred by section 103. The words of this provision had to be given their plain and literal meaning. The limitation period did not start to run until the date of last payment of benefits from any insurer. This interpretation did not produce an unreasonable result. The Legislature did not specify that the payment had to be received from the party against whom the action was brought. Although this interpretation was unfair to Jevco, Jevco’s interpretation would be equally unfair to Drews.

Statutes, Regulations and Rules Cited:

Financial Institutions Act, R.S.B.C. 1996, c. 141.

Insurance Company Motor Vehicle Liability Insurance Regulation, s. 2(2), 2(2)(b).

Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231, s. 1.

Insurance (Motor Vehicle) Act Regulations, ss. 103, 103(b), 103(b)(i), 103(b)(ii), 104(1), 204.

Interpretation Act, R.S.B.C. 1996, c. 238, s. 13.

Limitation Act, R.S.B.C. 1979, c. 236, s. 6(3).

Counsel:

Yan Gertsoyg, for the plaintiff.

Marion Stickland, for the defendant.

1     BAKER J.:– Barry Drews, who is a resident of British Columbia, suffered multiple injuries in a motorcycle accident in New Brunswick on July 26, 1992. The motorcycle Mr. Drews was driving was owned by Joel Poulin, a Quebec resident, and was insured under a policy of insurance issued by the defendant, Jevco Insurance Company. Mr. Drews brought this summary trial application seeking a declaration that Jevco must pay him benefits – income replacement, and medical and rehabilitation expenses – under Part 7 of the Revised Regulation (1984) made pursuant to the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231. Jevco says Mr. Drews’ action is barred by the application of section 103(b) of the Revised Regulation.

HISTORY OF THE APPLICATION

2     The motion originally filed by the plaintiff sought a declaration that Jevco is required to pay medical and disability benefits; a declaration that this action was commenced within two years after the date Mr. Drews received his last Part 7 benefit payment; and an order that Jevco pay Mr. Drews the sum of $50,106.27 for benefits owed to the date the application was filed; and benefits accruing due after that date.

3     The motion, and Jevco’s response to it, raised numerous issues including reciprocal pleas of promissory estoppel; the extent of the plaintiff’s disability resulting from the accident injuries; whether the plaintiff is or ever has been “totally disabled”; the quantum of any benefits to which the plaintiff may be entitled; and whether any or all of these issues could be fairly and justly disposed of by summary trial.

4     When setting the motion for hearing, both counsel significantly underestimated the time that would be required for their submissions, with the inevitable result that at the conclusion of the available time, counsel had not completed their submissions on any issue; and some issues had not been addressed at all.

5     I agreed to reserve judgment on two issues, counsel having agreed to complete their submissions on these two issues by filing supplemental briefs. The balance of the issues raised by the plaintiff’s application and the defendant’s response were adjourned generally.

6     The two issues on which I reserved judgment are these:

  1.  In determining whether Mr. Drews’ action against Jevco is barred by the provisions of section 103(b)(ii) of the Revised Regulation to the Insurance (Motor Vehicle) Act, does the limitation period begin to run on the date of the last benefit payment made to Mr. Drews by Jevco, or does the period only begin to run on the date of the last benefit payment received by Mr. Drews, even though that payment was made by another insurer?
  2. If Mr. Drews is unsuccessful on the first issue, can he seek to rely on the provisions of s. 6(3) of the Limitation Act to postpone the running of time under s. 103(b)?

FACTS

7     On July 26, 1992, Mr. Drews was driving a motorcycle on the Trans Canada Highway near St. John, New Brunswick. He was riding in a group of motorcycles, on a bike owned by Joel Poulin, who was a resident of Quebec. The motorcycle driven by Mr. Drews collided with a motorcycle driven by John Howorth and owned by Barry Gardner. Mr. Drews’ motorcycle fell over and skidded along the highway and he was then struck or ridden over by a motorcycle driven by Norman Godbout.

8     Mr. Drews suffered significant multiple injuries and was hospitalized for several weeks. He has required several operations and treatment by various health care specialists.

9     According to the affidavits, information obtained by New Brunswick police shortly after the accident indicated that Mr. Poulin was insured through a broker, Ciasson Proulx & Associes of Quebec; Mr. Gardner had a policy of insurance issued by State Farm Mutual Automobile Insurance Company of New Brunswick; and Mr. Godbout was insured under a policy of insurance issued by Durepos Insurance Ltd. of Quebec.

10     Within a month after the accident, Mr. Drews retained James McNeney of the Vancouver law firm McNeney & McNeney, to act on his behalf. A telephone call was made by Mr. McNeney’s office to an ICBC claims centre on August 12, 1992, but the ICBC representative refused to open a claim or provide a claim number, presumably because the vehicles involved were all out-of-province vehicles and the accident had occurred outside British Columbia.

11     On August 24, 1992, Mr. McNeney wrote to ICBC stating that since it was believed that Mr. Godbout was uninsured, Mr. Drews might be entitled to coverage under the uninsured motorist provisions of his ICBC policy.

12     According to a notation on the bottom of Mr. McNeney’s letter, a copy of the letter was sent to Ciasson Proulx & Associes, Mr. Poulin’s Quebec insurance broker. Mr. McNeney wrote directly to Ciasson Proulx on August 24, 1992, enclosing information about the accident and Mr. Drews’ claim for benefits under Mr. Poulin’s policy.

13     Karyn Samson, an ICBC claims adjuster, telephoned Mr. McNeney on August 27, 1992 and advised him to pursue the Quebec insurer for Part 7 benefits; and the uninsured motorist fund, if necessary, for the tort claims.

14     Ron Hunter was a claims adjuster employed by Lindsey Morden Claims Services in Vancouver in 1992. Lindsey Morden provided claims adjusting services to various insurance companies, including Jevco. Mr. Hunter was instructed to handle Mr. Drews’ claim on behalf of Jevco. Specifically, he says, he was instructed to determine the facts and circumstances of the accident and the nature and extent of injuries sustained by Mr. Drews.

15     Mr. Hunter recalls speaking with Mr. McNeney on several occasions, and also recalls meeting with Mr. McNeney and Mr. Drews at Mr. McNeney’s office on October 14, 1992. On that date, Mr. Hunter obtained a written statement from Mr. Drews about the circumstances of the accident and his injuries.

16     On October 24, 1992, ICBC wrote to Mr. McNeney, advising that Mr. Poulin’s Quebec insurer would be the primary insurer liable for Mr. Drews’ claims. The letter said:

His policy should be pursued for the equivalent of Part 7 benefits”…

and:

“…Mr. Drews’ tort claims should be pursued against the liable party’s insurers or, if uninsured, the appropriate fund in New Brunswick”.

17     On November 17, 1992, Mr. McNeney wrote to La Regie de l’Assurance Automobile du Quebec, indicating that he believed La Regie was the insurer of Mr. Poulin’s motorcycle. La Regie de l’Assurance seems to be either a government department or the Quebec equivalent of ICBC.

18     In the letter to La Regie, Mr. McNeney noted that he had been told that Mr. Poulin had an insurance policy with Ciasson Proulx & Associes but that it now appeared to him that La Regie was responsible to pay benefits to Mr. Drews.

19     On December 1, 1992, Mr. McNeney wrote to ICBC advising that La Regie, later referred to as the Societé de L’Assurance Automobile du Quebec, had refused to pay for expenses incurred outside of Quebec. Mr. McNeney renewed Mr. Drews’ claim to be paid Part 7 benefits by ICBC.

20     By December 17, 1992, Mr. McNeney had received a letter from State Farm Insurance denying coverage on behalf of Mr. Gardner; and a letter from Durepos Insurance confirming that Mr. Godbout’s policy had expired.

21     Sometime prior to January 12, 1993, Mr. Hunter, Jevco’s adjuster, informed Mr. McNeney that Mr. Poulin’s policy of insurance with Jevco was limited to property damage only, and did not provide coverage for collision or bodily injury liability or medical benefits.

22     On January 20, 1993, ICBC began paying total temporary disability benefits to Mr. Drews. ICBC began paying medical and rehabilitation benefits to Mr. Drews on March 29, 1993.

23     After May 31, 1995, ICBC discontinued paying total temporary disability benefits to Mr. Drews, but continued to pay medical and rehabilitation benefits. On July 26, 1995, ICBC wrote to Mr. McNeney advising that on the basis of a preliminary report from ICBC’s New Brunswick lawyers, ICBC was of the view that Guardian Insurance should have been paying no-fault benefits to Mr. Drews on behalf of Mr. Poulin. Guardian Insurance was not the insurer of any party involved in the motorcycle accident, and it is not clear why ICBC referred to Guardian in the letter.

24     Despite having sent the July 26, 1995 letter, ICBC continued to pay Mr. Drew’s medical and rehabilitation expenses until October 30, 1995. After that date ICBC discontinued payment of medical expenses except for one further payment of $9.15 which ICBC paid on September 30, 1997. This payment appears to be reimbursement for the cost of a prescription.

25     Correspondence was exchanged between Mr. McNeney and ICBC in late July 1995 concerning an offer by State Farm Insurance to settle Mr. Drews’ tort claim against Mr. Gardner. Apparently a settlement was concluded, but no details are in evidence before me.

26     In late August or early September 1997, Mr. Drews retained his present counsel, Mr. Gertsoyg. Shortly after he was retained, Mr. Gertsoyg commenced an action against ICBC on behalf of Mr. Drews to attempt to compel ICBC to continue to pay Part 7 benefits.

27     Mr. Gertsoyg followed up on ICBC’s assertion that Mr. Poulin was insured with Guardian Insurance. In response to inquiries made by Mr. Gertsoyg, Guardian Insurance informed him that Mr. Poulin’s vehicle was not insured with Guardian. On November 25, 1997, Jevco informed Mr. Gertsoyg that Mr. Poulin did have a policy of insurance with Jevco. As it had in response to Mr. McNeney’s earlier inquiries, however, Jevco stated:

This policy does not cover no fault insurance benefits or uninsured motorist benefits nor bodily injuries.

28     Mr. Gertsoyg wrote to counsel for ICBC on November 27, 1997, informing ICBC of the position taken by Jevco and asking ICBC to reinstate Mr. Drews’ Part 7 benefits. ICBC declined and in its December 9, 1997 statement of defence, filed in the action commenced against ICBC by Mr. Drews, ICBC pled that by operation of section 204 of the Regulations to the Insurance (Motor Vehicle) Act, Jevco was the insurer obligated to pay Part 7 benefits to Mr. Drews. Despite this pleading, neither Mr. Drews nor ICBC took steps to join Jevco in that action.

29     On July 27, 1998, following a summary trial, Justice Tysoe dismissed Mr. Drews’ claim against ICBC. In his Reasons, Justice Tysoe stated that Jevco was the primary insurer for Part 7 benefits by application of s. 2 of the Insurance Company Motor Vehicle Liability Insurance Regulations under the Financial Institutions Act, R.S.B.C. 1996, c. 141; and ss. 104(1) of the Regulations under the Insurance (Motor Vehicle) Act. He held that as benefits payable by ICBC under Mr. Drews’ own policy of insurance were only available to the extent that those benefits exceeded benefits Jevco was deemed to be required to provide as Part 7 benefits, there was no amount owing by ICBC to Mr. Drews. Justice Tysoe also held that ICBC was not estopped from refusing to pay further benefits even though Mr. Drews asserted that he had relied on ICBC’s payments in not pursuing Jevco.

30     On July 29, 1998, Mr. Drews commenced this action against Jevco.

THE LEGISLATION

31     Section 103 of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, Part 7, says:

No person shall commence an action in respect of benefits under this Part unless

(b)          the action is commenced within two years after

(i)            the date of the accident for which the benefits are claimed, or

(ii)          where benefits have been paid, the date he received the last benefit payment under this Part.

“Benefits” is defined in the Insurance (Motor Vehicle) Act, section 1 as “means benefits prescribed in the regulations”. Section 13 of the Interpretation Act, R.S.B.C. 1996, c. 238 provides:

An expression used in a regulation has the same meaning as in the enactment authorizing the regulation.

32     Section 2(2) of the Insurance Company Motor Vehicle Liability Insurance Regulation made pursuant to the Financial Institutions Act says:

In an action brought in British Columbia against an Insurance company or its insured or an extraprovincial insurance corporation or its insured under a contract of automobile insurance made outside British Columbia the insurance company or extraprovincial corporation

(b)          shall not set up any defence to the action, including a defence as to the limit or limits of liability under the contract made outside British Columbia that might not be set up if the contract were evidenced by a motor vehicle liability insurance policy issued in British Columbia, …

ISSUE 1 – ANALYSIS AND DECISION

33     Jevco says that this action was commenced too late and is barred by s. 103(b)(i) and (ii) of the Revised Regulation. Jevco says that the action was not commenced within two years of the date of the accident, and was not commenced within two years after the date of any benefit payment made by Jevco.

34     Mr. Drews concedes that the action was not commenced within two years of the date of the accident, but says that the action was commenced within two years after the date he received his last Part 7 benefit payment. The evidence establishes that Mr. Drews received a payment of $9.15 from ICBC on September 30, 1997. He commenced this action against Jevco on July 29, 1998.

35     Jevco says that the reference in s. 103(b)(ii) to the last benefit payment received must be interpreted to mean the last payment made by the party against whom the action is brought, and cannot be a reference to a payment made by another insurer. Jevco says that the purpose of section 103 is to ensure that an action is brought against an insurer within a reasonable time, in order that the insurer can properly investigate and assess the claim; set aside a reserve for payment of the claim if it is to be paid; or properly defend the claim if it is assessed to be invalid. Jevco also says that section 103(b) does not contemplate more than one no-fault benefits insurer, and it is not reasonable to impute ICBC’s payment to Jevco. Jevco says that the fact that Mr. Drews received a payment from ICBC on September 30, 1997 should not be taken into account in determining whether Mr. Drews is barred from commencing this action against Jevco.

36     Mr. Drews says that s. 103(b)(ii) should be given its plain and ordinary meaning. He says that the section does not indicate that only one no-fault benefits insurer is contemplated. Mr. Drews says the section does not say that the limitation period runs from the date of the last benefit payment received from the insurer against which the action is brought, and that the court ought not to “read in” words which would restrict or limit an insured’s rights.

37     Mr. Drews also relies on s. 2(2) of the Insurance Company Motor Vehicle Liability Insurance Regulation. Mr. Drews says that ICBC could not defend this action on the basis that it is barred by s. 103(b)(ii) and that Jevco is not entitled to set up any defence to the action that ICBC could not raise if it was the defendant.

38     Neither counsel was able to provide the court with any authority directly on point. The fact pattern presented here appears to be unique and the issue has not previously been litigated.

39     Essentially, counsel for Mr. Drews argues that the words of the section should be given their plain and literal meaning. He says that the limitation period created by the section does not start to run until the date of the last payment of Part 7 benefits received by Mr. Drews, from any source. Counsel for Jevco says that such a “literal” interpretation of the section would produce an unreasonable and absurd result.

40     In its supplemental submissions, Jevco drew the court’s attention to the words of Lord Wensleydale in Gray v. Pearson (1857), 10 E.R. 1216, at p. 1234:

I have been long and deeply impressed with the wisdom of the rule, now, I believe, universally adopted, at least in the Court of Law in Westminster Hall, that in construing wills and indeed statutes, and all written instruments, the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no farther.

41     This principle was restated by Justice LaForest in New Brunswick v. Estabrooks Pontiac Buick Ltd. (1982) 144 D.L.R. (3d) 21 and quoted with approval by Chief Justice Lamer in R. v. McIntosh, 95 C.C.C. (3d) 481 at page 493:

There is no doubt that the duty of the courts is to give effect to the intention of the Legislature as expressed in the words of the statute. And however reprehensible the result may appear, it is our duty if the words are clear to give them effect. This follows from the constitutional doctrine of the supremacy of the Legislature when acting within its legislative powers. The fact that the words as interpreted would give an unreasonable result, however, is certainly grounds for the courts to scrutinize a statute carefully to make abundantly certain that those words are not susceptible of another interpretation. For it should not be readily assumed that the Legislature intends an unreasonable result or to perpetrate an injustice or absurdity.

42     Counsel for Jevco says that the interpretation urged by counsel for Mr. Drews would bring about an unreasonable result, and would perpetrate an injustice against Jevco.

43     Counsel for Mr. Drews, on the other hand, adopts the words of Justice Boyle in Meyer v. Insurance Corporation of British Columbia, [1995] B.C.J. No. 27, at p. 2:

It is not disputed that, where legislation limits rights, the words of limitation must be strictly construed and ambiguity resolved in favour of (in this case) a Plaintiff.

44     I have concluded that giving the words of the regulation their plain and ordinary meaning, as urged by counsel for Mr. Drews, does not produce an absurd or unreasonable result. The words used by the Legislature place an onus on the person claiming benefits to commence an action within two years after receipt of the last payment of benefits under Part 7. The Legislature did not specify that the payment must have been received from the party against whom the action is to be brought. This interpretation of the section is also supported by the fact that the section refers to the insured’s “receipt” of benefits, rather than the insurer’s payment of benefits.

45     Jevco has argued that this result is unfair – that it could not have known that ICBC had made payments for Part 7 benefits to Mr. Drews and that it had closed its file after receiving no further inquiries from Mr. McNeney. The result urged by Jevco would, however, be equally unfair to Mr. Drews, who was twice told by Jevco that its policy did not provide for payment of the type of benefits he was seeking, and who did receive such benefits from ICBC for several years.

46     In saying this, I am not expressing an opinion on the issue of promissory estoppel, which has not yet been fully argued, and is not before me. I merely point out that the “fairness” argument has two faces in relation to the interpretation and application of the Regulation in the unique factual circumstances of this case.

47     In reaching the conclusion I have, I have not relied upon s. 2(2) of the Insurance Company Motor Vehicle Liability Insurance Regulation. It is not necessary for me to do so. The words of the section are not ambiguous. I am unable to conclude that giving the words of the section their plain, literal and ordinary meaning brings about an absurd or unreasonable result. I therefore conclude that s. 103(b) should be interpreted in the manner urged by counsel for Mr. Drews. The limitation period created by s. 103(b)(ii) does not commence to run until the date on which the person commencing the action received the last benefit payment under Part 7. The fact that the payment was made by another insurer is not relevant, in my view. The section does not specify that the source of the last payment of benefits is a relevant consideration.

48     The date Mr. Drews received the last benefit payment under Part 7 was September 30, 1997. He commenced this action within two years after that date. Therefore the action is not barred by s. 103(b) and Mr. Drews is entitled to a declaration to that effect.

ISSUE 2 – APPLICATION OF S. 6(3) OF THE LIMITATION ACT

49     Section 6(3) of the Limitation Act says:

The running of time with respect to the limitation periods fixed by this Act for an action

(a)           for personal injury;

is postponed and time does not commence to run against a plaintiff until the identity of the defendant is known to him and those facts within his means of knowledge are such that a reasonable man, knowing those facts and having taken the appropriate advice a reasonable man would seek on those facts, would regard those facts as showing that

(i)            an action on the cause of action would, apart from the effect of the expiration of a limitation period, have a reasonable prospect of success; and

(j)            the person whose means of knowledge is in question ought, in his own interests and taking his circumstances into account, to be able to bring an action.

50     Having determined the first issue in favour of Mr. Drews, it is not strictly necessary for me to consider whether the postponement provisions of s. 6(3) of the Limitation Act, R.S.B.C. 1979, c. 236 would have been available to Mr. Drews to relieve against the effect of s. 103 of the Revised Regulations. However, for the assistance of the parties in the event that I am found to have erred in concluding that Mr. Drews’ action is not barred by s. 103(b)(ii), I have considered the second issue.

51     I have concluded that I am bound by the decision of this court in Marin v. I.C.B.C., [1993] B.C.J. No. 923, [1993] B.C.W.L.D. 1266, and that s. 6(3) applies only to limitation periods set by the Limitation Act. Therefore, s. 6(3) would not be available to Mr. Drews to postpone the running of time under s. 103(b) of the Revised Regulations.

OTHER ISSUES

52     As agreed by the parties, the plaintiff may renew his application for the other relief set out in his original notice of motion. I have not, by determining the issues dealt with in these Reasons, made a determination as to whether any of the other issues raised by the plaintiff’s application are suitable for disposition by summary trial.

53     Counsel may arrange with the Registry to have subsequent applications heard by me, if they consider it more convenient to do so, given my familiarity with this action. However, I do not consider myself to be seized of any further applications, and counsel are free to set matters for hearing before any other judge in Chambers, in the ordinary course.

COSTS

54     Costs of this application shall be costs in the cause.