Subrogated Action in Another Province was not a Bar to Insured’s Claim in Ontario

The existance of subrogated action in insured’s name in Alberta for property damage was not a bar to insured’s claim for personal injuries in Ontario.

Kelly v. Horn, [2014] O.J. No. 2872, June 16, 2014, Ontario Superior Court of Justice, F.N. Marrocco A.C.J.S.C.J., A.C.R. Whitten and Thomas JJ.

This case involved a motor vehicle accident which occurred in Alberta. The vehicle operated by the defendant/appellant, Travis Horn, which was owned by West Country Oil Field Ltd. and John Taylor, collided with a tractor‑trailer operated by the plaintiff/respondent, Noel Kelly. The tractor‑trailer was owned by Ultra Transportation Inc. After conducting an investigation, Markel Insurance Company paid Noel Kelly for the damage to the tractor‑trailer. The insurer then sought to subrogate against West Country Oil Field Ltd, John Taylor and Travis Horn. The insurer commenced an action in Alberta to enforce its subrogated claim for damage to the tractor‑trailer. It sued in the name of Noel Kelly for the amount it paid to Mr. Kelly to compensate for property damage to the tractor‑trailer. In response to the action West Country Oil Field Ltd, John Taylor and Travis Horn entered into a consent judgment which was satisfied.

Noel Kelly later commenced a personal injury action against the defendants in Ontario. In response, the defendants made Noel Kelly aware that a judgment bearing his name existed in Alberta. This was the first time Mr. Kelly learned about the Alberta legal proceeding. Mr. Horn took the position that Mr. Kelly was precluded from bringing a personal injury action arising out of the same allegations of negligence and the same motor vehicle accident. Mr. Horn brought a motion for summary judgment which was dismissed. This decision was appealed to the Ontario Superior Court of Justice Divisional Court.

The Ontario Superior Court of Justice was satisfied that the motions judge had correctly exercised his discretion on the basis that cause of action estoppel and issue estoppel are two doctrinal branches of estoppel res judicatem which, despite common law roots, are discretionary and designed to protect against injustice. The court was satisfied that Mr. Kelly’s insurer’s subrogated right of recovery for property damage could be differentiated from Mr. Kelly’s personal right of recovery for personal injuries. On that basis, the appeal was dismissed.

This case was digested by Cameron B. Elder and edited by David W. Pilley of Harper Grey LLP.

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