The Ontario Court of Appeal decision of Tuffnail v. Meekes, 2020 ONCA 340 (CanLII)  (“Tuffnail”), is an important one. It provides clarity on: joint and several liability; the role of OPCF 44R insurers (and particularly  subrogation rights of insurers); Pierringer Orders; prejudgment interest; and, when it is or is not appropriate to allow a party to amend their pleadings after a jury verdict has been rendered.

The facts of Tuffnail are sad. The plaintiff was seriously injured when he was involved as a passenger in a single-motor vehicle accident following a wedding reception. Another passenger was killed. The driver had been served alcohol at the reception.

The plaintiff sued the driver as well as the groom – where the groom was the social host of the reception. The plaintiff also sued his OPCF44R insurer, where the driver only had third party liability limits of $200,000.00.

The OPCF44R insurer and the groom commenced third party claims against the bartender from the wedding reception – alleging that the bartender’s negligence and/or breach of the Liquor Licence Act caused or contributed to the accident.

The plaintiff did not sue the bartender.

There was a companion action that agreed to be bound by the jury’s findings of liability in the Tuffnail trial.

In Tuffnail, the Court of Appeal provided guidance on an insurer’s right of subrogation under s. 20 of the OPCF44R. Writing for a unanimous panel which included Justice David Doherty and Associate Chief Justice Frank Marrocco, Associate Chief Justice Alexandra Hoy commented that an  insurer’s right of subrogation is derivative in nature and, in exercising the right of subrogation, the insurer advances a cause of action that is only a cause of action that the plaintiff would otherwise have against the party responsible for causing the loss.

The Court considered subsections 278 (1) and (2) of the Insurance Act:


278(1) An insurer who makes payment or assumes liability therefore under a contract is subrogated to all rights of recovery of the insured against any person and may bring action in the name of the insured to enforce those rights.

Pro-rating recovery

(2) Where the net amount recovered whether by action or on settlement is, after deduction of the costs of the recovery, not sufficient to provide complete indemnity for the loss or damage suffered, the amount remaining shall be divided between the insurer and the insured in the proportion in which the loss or damage has been borne by them.

In Tuffnail, the OPCF44R insurer commenced a subrogated third party claim against the bartender pursuant to section 278 of the Insurance Act. The OPCF44R insurer  sought  contribution and indemnity for damages that it was required to pay the plaintiff. The amount the OPCF44R insurer was required to pay the plaintiff was ultimately reduced by the apportioned damages found against the bartender, pursuant to Section 7(b) of the OPCF44R Endorsement:

7. The amount payable under this change form to an eligible claimant is excess to an amount received by the eligible claimant from any source, other than money payable on death under a policy of insurance, and is excess to amounts that were available to the eligible claimant from

(b) the insurers of a person jointly liable with the inadequately insured motorist for the damages sustained by an insured person;

The plaintiff did not sue the bartender, but the court held that the bartender was severally liable with the individual defendants for the loss under the Negligence Act (the jury also found that the plaintiff bore a small degree of contributory negligence for the loss). The court also found that the groom was entitled to recover a proportionate share of the plaintiff’s damages from the bartender by way of his third party claim.

The court noted that the OPCF44R insurer did not have an independent cause of action against the bartender, but  that it was able to make a subrogated claim against the bartender on behalf of the plaintiff, with the express purpose of offsetting the amount of damages the OPCF44R insurer was required to pay.  The court concluded that, within the meaning of s. 7 (b) of the OPCF44R, the bartender was “jointly” liable with the individual defendants  including the underinsured driver.

After the jury returned their verdict, the bartender sought leave to amend his pleadings to include a limitation defence. The court rejected this request, in finding that the parties may have led different evidence during the trial regarding discoverability. The proposed change might have changed both strategy and settlement discussions throughout the litigation. This amounted to non-compensable prejudice.

In Tuffnail, the underinsured driver admitted at least 1% liability and settled with the plaintiff prior to trial. The plaintiff did not execute a Pierringer agreement or obtain a Pierringer Order. As such, the style of cause was not altered and the jury was charged to determine liability against all of the defendants and third parties. The Court of Appeal found that including the apportioned share of fault of the underinsured driver in the charge to the jury was not an error by the trial judge. Absent a Pierringer Order,  the underinsured driver remained a party to the action.

At paragraph 89 of the decision, the court provided guidance on the mechanism of Pierringer Orders: Pierringer Orders require the statement of claim to be amended to limit the claim against the non-settling defendants to their several liability or proportionate share of joint liability to the plaintiff. The court also clarified that a Pierringer Order does not entitle the court to apportion fault to non-parties and then reduce the plaintiff’s recovery by that apportioned share of fault.

In Tuffnail, the trial judge trial judge improperly exercised her discretion to award prejudgment interest at a rate higher than the bank rate. The Court of Appeal addressed the circumstances the court can consider when choosing to exercise discretion to award prejudgment interest at a rate other than the default rate prescribed by sections 127 and 128 of the Courts of Justice Act. The court endorsed the view that some external or prior unfairness can sometimes make the retrospective application of the amendment to the Insurance Act particularly unfair to plaintiffs. The example the court gave would be case specific events such as where proceedings were delayed so that the amendment to the Insurance Act applied where it might not have otherwise. Tuffnail was not an appropriate case to deviate from the default bank rate. The market interest rates had not fluctuated above the default rate throughout the litigation and there were no unusual circumstances that warranted a change. As such, a pre-judgement interest rate of 1.3% was applied.

Meredith Harper is a partner at ZTGH and co-chair of the Appellate Advocacy group. If you have a question about this blog or a similar file, please contact Meredith at 416-777-5207