LITIGATING OUT-OF-PROVINCE MOTOR VEHICLE ACCIDENTS IN ONTARIO

Posted November 7, 2013
  • Lawyer Image

With leaves turning color and a chill in the air, Ontario “snowbirds” will be packing up their cars and heading “down South” to the United States to escape our cold, harsh winters.  In addition, many Ontarians take advantage of our close proximity to the United States border to cross-border shop, take in a Buffalo Bills football game or get away for a ski weekend in Ellicottville.

Statistics Canada Data for December of 2012 to April of 2013 show that Ontarians made, on average, approximately 900,000 car trips per month to the United States.

With this volume of traffic leaving the Province it is inevitable that Ontarians will be injured in car accidents in the United States.  Once injured, usually after a relatively brief period of treatment in the United States, accident victims return to Ontario to undergo the bulk of their rehabilitation and to resume what they can of their normal lives.  It is also in Ontario where they make their claims to their own Ontario no-fault benefit insurers (see accompanying article “Out of Province Motor Vehicle Accidents – Am I Covered” by Len Kunka).

In these circumstances, the most convenient forum in which to litigate motor vehicle accident claims is almost always Ontario.  Ontario is not only the residence of the Plaintiff but also his or her family members, friends and relatives, teachers or employers, treating doctors, rehabilitation therapists and others, all of whom will have to testify to prove the Plaintiff’s damages.  Also, often family members or friends are witnesses to the accident as they were also in the car when the accident occurred.  However, sustaining damages in Ontario, and Ontario being the most convenient forum, are not sufficient to allow Ontario Courts to have jurisdiction over these claims.

Just over one year ago in Club Resorts Ltd. v Van Breda, [2012] S.C.J. No. 17, the Supreme Court of Canada set out four presumptive factors that would allow an Ontario Court to assume jurisdiction for foreign accident cases (subject to a Defendant’s ability to rebut any presumption).  These four factors; the Defendant is resident in Ontario, or carries on business in Ontario, or the tort was committed in Ontario, or a contract connected with the dispute was made in Ontario, may well be absent in many car accident cases.  Therefore, if an American Defendant does not voluntarily submit to the jurisdiction of an Ontario Court, the Plaintiff may well be forced to bring his or her claim in the United States.

Ontario Courts have recently had the opportunity to consider the effect of Van Breda with respect to two car accidents which occurred in New York State.

In the first case, Paraie v Cangemi, [2012] O.J. No. 5390, an Ontario motorist was struck from behind by a car owned and operated by a New York resident.  The Ontario Plaintiff brought a claim against the New York motorist and also his own Ontario automobile insurer with respect to uninsured and underinsured motorist coverage.  The Plaintiff argued that the claim against his own insurer was with respect to a contract that was connected with the dispute which was made in the Province and, therefore, the Ontario Court should accept jurisdiction.

Justice Lederer held that a Plaintiff should not be able to “boot strap” American Defendants into an action in Ontario by relying on a contingent claim against their own insurer who just happens to be resident in Ontario.

The action was therefore stayed.

In the second case, Cesario v Gondek, [2012] O.J. No. 5644, an Ontario motorist had the misfortune to be involved in two motor vehicle accidents four weeks apart.  The first accident occurred in New York State and the second accident occurred in Ontario.  The Plaintiff sued the New York and Ontario motorists but, also, his own insurer all in the same action, claiming that the injuries received in the two accidents could not be separately identified and assessed.

Justice Edwards held that as long as one Defendant was domiciled in the Province, Ontario would have jurisdiction.  Significant to this finding was Justice Edwards’ finding that if Ontario did not assume jurisdiction then the Plaintiff might be forced to litigate three separate actions, one in New York State and two in Ontario.  This course might result in the “unjust prospect of inconsistent verdicts”.  Justice Edwards also considered as a significant factor that the New York Defendant’s insurer had registered in Ontario with the Financial Services Commission of Ontario.  It should be noted that hundreds of American Insurers have registered with FSCO.  Therefore, in this case, the Ontario Court remained seized of the claim.

Practically speaking, once injured in an American accident, an Ontario resident should first retain an Ontario lawyer.  The Ontario lawyer, once retained with respect to an American accident, should immediately retain a lawyer in the State where the accident occurred.  This American lawyer will have to advise with respect to the foreign jurisdiction’s substantive law.  In Tolofson v Jensen, [1993] 3 S.C.R. No. 1022, the Supreme Court of Canada held that, generally, the substantive law of the State where the accident/tort occurred will be applied to the case, even when the case is litigated in Ontario.  However, the procedural rules of Ontario (where the case is proceeding) will govern all procedural steps.  American States can have very different substantive laws that govern car accident cases.  Substantive laws include limitation periods, heads of damages recoverable and liability for, and the amount of, interest payable.  Especially with respect to limitation periods, Ontario lawyers must be fully informed so that they do not inadvertently miss a State limitation period (which as a substantive matter of law would be applied in the Ontario action).

Additionally, Ontario lawyers may well want to instruct counsel in the American State to issue a claim in that jurisdiction.  This American claim would only be served and prosecuted if the Ontario Court does not accept jurisdiction.  This American claim would also be prosecuted if the American Defendant refused to submit to the Ontario jurisdiction and it was anticipated that there may be difficulty enforcing an Ontario Judgment in that American State.

In any event, with winter on its way, Ontario lawyers should be prepared to be retained to prosecute claims with extra-jurisdictional complications.

View PDF version: Accident Benefit Reporter | Volume 14, Issue 2 | November 2013

(An earlier version of this Article originally appeared in the May 3, 2013 issue of The Lawyers’ Weekly published by LexisNexis Canada Inc.).

Share on Facebook Share on Twitter Share on Linkedin Share on Google+ Share By Email