Stead v. Smith
Leonard Stead, Applicant, and
Gerrick M. Smith, Respondent
Nova Scotia Judgments:  N.S.J. No. 72
Action S.H. No. 52602 (1985)
73 N.S.R. (2d) 82
Supreme Court of Nova Scotia - Trial Division
Halifax, Nova Scotia (In Chambers)
April 10, 1986
Insurance (motor vehicle) -- Unsatisfied judgments -- Action against unsatisfied judgment fund -- Procedure -- Judgment Recovery not required to comply with R. 21.01(2) where representing uncooperative defendant -- Judgment Recovery not expected to reply to notice to admit -- Civil Procedure Rules (N.S.), RR. 21.02, 21.03 -- Motor Vehicle Act, R.S.N.S. 1967, c. 191, s. 195.
Following a hit and run motor vehicle accident in which a pedestrian was injured, the plaintiff commenced a negligence action. The defendant did not co-operate or participate in the action in any way. No defence was entered and, pursuant to s. 195 of the Motor Vehicle Act, the plaintiff gave notice of default of defence to Judgment Recovery. Judgment Recovery duly filed a defence to the action and the plaintiff later served a notice to admit requiring Judgment Recovery to admit or deny all facts relevant to the plaintiff's case. Judgment Recovery replied by saying it was not in a position to admit any facts and the plaintiff thereupon applied for summary judgment.
HELD: The application was dismissed. Judgment Recovery could not be expected to comply with the admission requirement of RR. 21.01 and 21.03 where it obviously could not get any co-operation from the defendant.
Paul Thomas and Mark Arnold, for the Applicant.
Christopher Robinson, for the Respondent.
KELLY J. (orally):-- This is an application for an order for summary judgment pursuant to various Civil Procedure Rules of our court and more specifically Rules 21.03 and 13.04 and 13.03(e). The matter arises out of a motor vehicle accident situation where a pedestrian was struck by a driver of a motor vehicle who departed from the scene and for all intents and purposes that person, who is the defendant in this matter, has not been participating in the pleadings and the preparation for the trial of this matter which is scheduled to take place in approximately two weeks' time.
As a defence was not entered to the originating pleadings and notice was given to Judgment Recovery by virtue of s. 195 of the Motor Vehicle Act of Nova Scotia. The provisions of that Act require that notice of default of defence be given to Judgment Recovery and that upon receipt of such notice Judgment Recovery may file a defence "on behalf of and in the name of the defendant and may take any steps that the defendant might take in an action". This section further provides:
"(5) Where Judgment Recovery (N.S.) Ltd. files a defence pursuant to subsection (2) or intervenes in an action pursuant to subsection (4), it may, on behalf of and in the name of the defendant, whether or not the defendant is an infant, conduct the defence, counsent [consent] to judgment in such amount as it considers proper or do any other act that a defendant might do and all acts of Judgment Recovery (N.S.) Ltd. shall be deemed to be acts of the defendant, provided, however, that where the defendant is an infant no judgment by consent shall be entered without the approval of the court or a judge thereof."
On the basis of this authority a defence was entered by Judgment Recovery, discovery of the plaintiff took place and the matter was set down for trial. However, during the intervening period the plaintiff's counsel served upon the defendant a Notice to Admit as provided for under our rules of court and listed in that Notice a number of matters for which it required an admission or denial from the defendant. Almost all of the factors necessary for the successful pursuit of the plaintiff's claim in this matter were included in the Notice to Admit, including admission of such acts as failing to maintain proper lookout, failing to maintain adequate control of the vehicle, and failing to apply the brakes or take any effective or evasive action under the circumstances. In general terms the admission of these items would constitute an admission of liability on the part of the defendant.
The Notice to Admit is made under Rule 21.02 of our Civil Procedure Rules which provides as follows:
"(1) A party may by a notice to admit in Form 21.02A request any other party to admit, for the purposes of the proceeding only, the truth of any relevant fact or the authenticity of any relevant documents specified in the notice.
Unless the court otherwise orders, the truth of any fact or the authenticity of any document specified in the notice to admit shall be deemed to be admitted for the purposes of the proceeding only unless, within the period specified in the notice, which shall not be less than ten days, the party receiving the notice to admit serves upon the party giving the notice a statement that
specifically denies the truth of any such fact or the authenticity of any such document and sets forth in detail the reasons why he cannot make the admissions, or
declares the admission of the truth of any such fact or the authenticity of any such document cannot be made on the grounds of privilege or irrelevancy or the request is otherwise improper, and sets forth in detail the reasons therefor."
Subsections (3) and (4) provides, among other things, that a copy of certain documents should be provided and that admissions or denials can be withdrawn under certain circumstances. Rule 21.03 provides that when an admission of the truth of any fact or the authenticity of any document is made by a party by his pleadings or otherwise, any other party may apply to the court for such judgment or order as he may be entitled to on the admission without waiting for the determination of any other question between the parties. The court may give judgment or make such order as it thinks fit.
Under that Rule the plaintiff in this matter is now seeking a summary judgment on the basis that the Reply forwarded by the defendant is inadequate and totally deficient under the provisions of Rule 21.02(2). The Reply of Judgment Recovery states as follows:
"In response to the Notice to Admit filed by the Plaintiff on the 21st day of March, 1986, Judgment Recovery (N.S.) Limited is not in the position to admit any of the items therein and should not be taken to have admitted any of those items. Judgment Recovery (N.S.) Limited hereby gives the Plaintiff notice that it will require the Plaintiff to strictly prove its case at trial."
The argument of counsel for the plaintiff is that such a response does not constitute an adequate reply or one which is within the terms specified in Rule 21.02(2)(a) or (b), in that the defendant, Judgment Recovery, did not specifically deny the truth or declare the admission of the truth. It is submitted that failure to comply with this Rule should result in a summary judgment against them on liability. There is no question that if in fact all of the items listed in the notice to admit are deemed to be admitted under Rule 21.02(2), in effect liability had been proven or has been admitted in this matter and Summary Judgment would be an appropriate resolution of the application.
Counsel for Judgment Recovery submit that Judgment Recovery is in a different position than a normal defendant in that in some instances, particularly where it receives no co-operation from the defendant, it cannot comply with the spirit of the rules, that is, to provide the defendant for full examination and to respond clearly and appropriately to a notice to admit facts or documents. I am advised that the defendant has evaded attempts to arrange discovery by Judgment Recovery and that they have issued a notice for discovery and have failed to locate the defendant for service. They believed the defendant was attempting to evade service and was clearly not co-operating in this matter. It would have been, as well, possible under our rules for the plaintiff to obtain from this court an order for discovery on the defendant, Smith, but they did not take this course, presumably because they felt Smith would not be available for service.
The argument of the counsel for the plaintiff that the Reply given does not technically comply with Rule 21.02(2), does have some merit. In replying to this argument counsel for Judgment Recovery submit that their Reply to the notice to admit can be read as specifically denying the truth of the facts on the basis that they do not have the information available to them from the defendant, Smith, and that they therefore are not in the position to admit any of the items submitted in the notice to admit. They require the plaintiff to "strictly prove" its case at trial. Counsel for the plaintiff took exception to this requirement but I have no difficulty with the phrase as even if it had not been specified the plaintiff would be required to prove its case at trial in any event.
In a pedestrian situation the onus of proof of liability is specified under s. 221(1) of our Motor Vehicle Act. This section provides that where injury occurs to a person on a highway "... by reason of the presence of a motor vehicle on the highway ..." the onus of proof rests essentially with the owner or operator of the motor vehicle to satisfy the court that the damage did not arise solely through the negligence or improper conduct of the owner or operation of the vehicle. In other words, the essential onus will remain on Judgment Recovery in the event of a trial and admittedly that onus will be very difficult for them to discharge without the presence or co-operation of the defendant Smith. They argue that other evidentiary factors can be brought to the attention of the trial court including other witnesses who might have observed the incident and thus it might be possible for them to advance the additional factor of contributory negligence and other possible matters which would require a full hearing of this matter.
I am satisfied that Judgment Recovery, acting in its capacity as legislated representative of the defendant in this matter, has done everything that it properly can to comply with the spirit of disclosure that are emphasized in our rules of court.
The essential issue, of course, is whether Judgment Recovery, in acting for the defendant in these matters, is in any different position than an ordinary defendant. I have been referred to Van Kooten v. Doy et al (1981), 31 O.R. (2d) 247, a matter before the divisional court of Ontario. The equivalent agency to our Judgment Recovery was involved in that action, an appeal by the defendants from an order of the Master striking out that the statement of defence because of a failure of the defendants to attend a discovery pursuant to a notice served by a third defendant. The issue there was whether the discretionary power of the Master to strike out a statement of defence could be exercised so as to take away the minister's right to defend which was given to the Minister in Ontario under the Motor Vehicle Accident Claim's Act.
In discussing the position of the Minister, Mr. Justice Holland stated at p. 250:
"The statue appoints the Minister as the protector of the public fund from which judgments under this Act may be paid in proper circumstances and confers wide powers on the Minister in the fulfilment of this obligation. It must be accepted that in many, if not most of these cases, the defaulting defendant cannot be located. If the Minister's right and obligation to defend could be lost by the Minister's inability to produce the defaulting defendant for discovery, the right conferred by the statute would be illusory and nugatory. The Minister, having thus obtained jurisdiction to act by reason of the default, would be rendered sterile because, the very default bringing the Minister into the action could result in any defence filed by the Minister being struck out leaving the Minister without status to carry out his statutory function. We believe that this right which may also be described as an obligation on the part of the Minister to defend, where he so elects, cannot be lost by inability to produce the defaulting defendant."
Further, in that case, after reviewing the comments of the Ontario Court in Crooks v. Janzen Plumbing and Heating Ltd. et al.,  1 O.R. 455, Mr. Justice Holland continued at p. 251:
"Those comments, we feel, apply with equal force to the issue in the appeal before us where, as here, the Minister is brought in to represent a defaulting defendant pursuant to the statute. The statutory authority to defend given to the Minister cannot be ousted by the Minister's inability to produce a defaulting defendant for discovery. In those circumstances we are of the view that a proper exercise of the discretion given to the Master is to refuse to strike out the defence so filed. It is unnecessary to consider here whether there could be circumstances such as bad faith or other improper conduct on the part of the Minister or anyone acting under his instructions which would warrant a departure from this general principle. It is sufficient to say, in the present case, that if the Minister learns of the whereabouts of these defendants he should regard himself as being under an obligation to so advise the other parties and if he is able, to produce those parties for discovery."
I apply those comments to the matter before us as I feel that Judgment Recovery Limited is in a different position by reason of the provisions of the Motor Vehicle Act and by reason of the very position in which it frequently finds itself when representing the trust interests of its fund without the co-operation of the named defendant and indeed, frequently in the absence of the named defendant as appears to be the situation before us.
I refer as well to Widstrom v. Semenko and Attorney-General of British Columbia (1958), 26 W.W.R. 20 reversing,  11 D.L.R. (2d), 735 and specifically to the statement of Sheppard, J.A., at page 21 of the judgment of the court:
"That right of the Attorney-General to intervene and defend ... is a right separate and independent from that of the defendant as it may be asserted by the Attorney-General against the will of the defendant or where the defendant has consented to judgment. The defences which the Attorney-General may raise do not in any way depend on instructions he may receive from the defendant; the Attorney-General may raise defences without any instructions as in the present case where the defendant cannot be located or against the express wishes of the defendant, as after a consent to judgment."
I adopt those comments as well as being appropriate to the position of Judgment Recovery Limited in this Province under our legislation.
Under all of these circumstances I feel it is not appropriate to exercise my discretion in this matter under the rules of our court and specifically under Rule 21.02 and 21.03, as I feel it would be unjust to require Judgment Recovery to comply with the rules any further than it has already complied in this situation. I therefore dismiss the application.