Court Denies Plaintiff’s Application for an Advance or Periodic Payment
In White v. Meiting,1 the Supreme Court of Newfoundland and Labrador denied a plaintiff’s application for an advance or periodic payment. In doing so, the court clarified the criteria which must be satisfied by a plaintiff who seeks an advance payment of special damages pursuant to Rule 44A of the Rules of the Supreme Court, 1986. It also considered the circumstances under which a plaintiff may be entitled to a periodic payment under section 26.2 of the Automobile Insurance Act.2 In its decision, the court agreed with the analysis set forth in Wade v. Bartlett.3
The plaintiff, Eric White, was a pedestrian struck by a vehicle operated by the defendant, Miao Meiting. White claimed to have been seriously injured as a result of the accident.
The court had to determine if White was entitled to an advance or periodic payment: (a) for pre-trial loss of income; and (b) for the lost value of certain business inventory which White claimed he was forced to sell at a gross undervaluation.
Issue 1: Whether the plaintiff was entitled to an advance payment under Rule 44A
Pursuant to Rule 44A, the court may order an advance payment of “special damages” if: (a) the defendant “has admitted liability for all or part of the special damages claimed”; or (b) the plaintiff has obtained judgment against the defendant with damages to be assessed. There was no judgment in favour of White and, consequently, an admission of liability with respect to all or part of the special damages was required before the court could order an advance payment.
As to whether the necessary admission of liability was present, the court considered two factors: the effect of a prior advance payment made to White; and Meiting’s admission that she was liable for the accident.
White had received advance payments pursuant to section 26(1) of the Automobile Insurance Act. That section provides that where an automobile insurer makes an advance payment, on behalf of its insured, to a plaintiff, the payment constitutes, to the extent of the payment, a release of the plaintiff’s claim against the insured. In addition, under section 26(4), the payment is “without prejudice” to the insured or the insurer “either as an admission of liability or otherwise”. In the circumstances, the court held that an “advance payment by an insurer pursuant to section 26 of the Act does not constitute an admission of liability for the purposes of Rule 44A”.4
As for Meiting’s admission of liability, it was only with regard to the accident. Meiting had not admitted that the accident caused the adverse health effects for which White claimed damages, nor had she admitted the nature or the quantum of the damages claimed. The court agreed with Meiting who submitted that the requirement of an admission of liability, under Rule 44A, goes beyond the issue of liability for the accident. The court had to consider other potential issues as well. In particular, Meiting alleged that White was contributorily negligent. She also challenged “both the cause and the extent of the damages claimed by” White.5 In the circumstances, the court held as follows: “Because contributory negligence, causation and the extent and proof of damages all remain live issues for trial, this is not an appropriate case for an advance payment pursuant to Rule 44A”.6
Nevertheless, the court considered White’s attempt to establish causation for his alleged injuries and to prove his claim for special damages. In this regard, the court quoted from Wade v. Bartlett to the effect that Rule 44A “does not and cannot alter the substantive law” and that “it does not lessen the standard of proof”.7 In Wade v. Bartlett, the court held that Rule 44A “does not lessen the obligation to establish by evidence that a claimed loss would not have been incurred but for the injury, nor does it lessen the obligation to specifically plead and prove the special damages claimed”.8
Applying this standard to the issue of causation for White’s injuries, the court noted that White relied on medical reports which the court described as hearsay and which, on their face, did not establish causation for the medical conditions which White attributed to the accident.
With respect to White’s claim for lost inventory, the court found no evidence to support the alleged loss. White filed his own Affidavit regarding the value of the inventory, but he failed to submit any financial documentation to substantiate his valuation.
As to the claim for loss of income, the court noted that because White was self-employed and his income was subject to fluctuations, his claim was incapable of precise assessment. Consequently, it was not a claim for special damages, but a claim for general damages. The court confirmed that “Rule 44A only permits an advance payment on account of special damages”.9
Issue 2: Whether the Plaintiff could apply for a periodic payment under section 26.2 of the Automobile Insurance Act?
Under section 26.2 of the Automobile Insurance Act, an injured person, to whom compensation for bodily injury or death is payable under an automobile policy, may apply to the court for an order directing that the insurer pay the compensation periodically.
The court adopted the holding in Wade v. Bartlett to the effect that section 26.2 only applies to an insured claiming against their own insurer. A third party claimant, such as White, who claimed against an insured person could not avail of section 26.2.
Lessons for Insurers
With respect to Rule 44A, insurers should be aware that an advance payment is only available to a plaintiff when the defendant has admitted liability for all or part of the damages claimed, or where the plaintiff has obtained judgment against the defendant with damages to be assessed. Furthermore, the court can order advance payments only with respect to special damages, and the plaintiff faces the same standard of proof that would apply to a trial with regard to the claim.
As for section 26.2 of the Automobile Insurance Act, the court confirmed that the section is only available to claimants with a direct contractual claim against an automobile insurer.
1 White v. Meiting, 2019 NLSC 34.
2 Automobile Insurance Act, RSNL 1990, c. A-22.
3 Wade v. Bartlett, 2010 NLTD(G) 195.
4 White v. Meiting, para. 13.
5 White v. Meiting, para. 18.
6 White v. Meiting, para. 19.
7 Wade v. Bartlett, para. 38.
8 Wade v. Bartlett, para. 38. This represents a more onerous test than appears to apply in New Brunswick and Prince Edward Island where the plaintiff can succeed on the motion by establishing that he or she will more likely than not prove at trial that the defendant is liable for the damages in question. See “To Order an Advance Payment to a PEI Motor Vehicle Accident Plaintiff – or Not – That Was the Question”, published on our website on March 15, 2019.
9 White v. Meiting, para. 21.