January 12, 2022 by David Gambrill
Canadian courts are starting to get tough on potentially vexatious claimants, including insurance claimants, as seen in a Jan. 7 decision by the Court of Queen’s Bench in Alberta.
In Sun v. Allwest Insurance Services, the Alberta court referred to a relatively new practice note, known as ‘CPN7,’ to ask pointed questions of a B.C. vacation rental property owner.
The owner, who shut down his business after a car collision, seeks $10 million in damages for emotional suffering from his broker, Allwest Insurance Services Ltd., and B.C.’s public insurer, the Insurance Corporation of B.C. (ICBC).
The claimants, Tong Sun and Jinzohong Sun, owned a 2020 Tesla model S “ludicrous mode” car that was allegedly damaged in a motor vehicle collision on July 29, 2020. The Suns claim ICBC refused to pay the damages for that incident. The damaged car was then towed to Calgary, Alta., to trade for a vehicle from Canyon Creek Toyota.
Sun subsequently crashed a 2020 Infiniti QX60, which was declared a total loss. Sun’s statement of claim, which contains allegations not proven in court, blamed that mishap on “… all the hassles of a cross-province purchase and steep luxury tax imposed on the otherwise plain minivan.”
Zhao Sun reported becoming extremely fearful after the Infinity crash and stopped driving altogether, leading to immediate termination of all vacation rental property operations run by the Suns.
As a result of shutting down the operations, Tong Sun reported after-tax damages of “$49 billion in U.S. dollars,” the statement of claim says, in addition to “$10 million in emotional distress and loss of lifetime income.”
Income from the rental properties was a “vital lifeline” of the Sun family, funding [Tong] Sun’s law school tuition at a “confirmed, highly selective university law course in the U.K,” according to the statement of claim. The cost of attendance was about $65, 000 per year.
“[Tong] Sun is interested in working his way to a dollar value billionaire at some point in life, having achieved a respectable result of 99.9th percentile on the Scholastic Aptitude Test by College Board, and accepted at some top USNWR colleges in America when the acceptance rate was less than 2%,” the statement of claim reads. “To survive in the industry and to have a future, [Tong] Sun is also interested in applying to Stanford GSB and Chicago Booth for a Master of Business Administration program, in order to have the requisite credential to raise funds for his enterprises by way of IPO and issuance of debt debentures.”
CPN7 is a practice implemented by the court to better manage litigation that, on its face, appears to be unmeritorious, has no prospect of success, or is otherwise abusive and vexatious. It is not intended for “close calls,” but when the pleadings seem obvious not to have a hope of winning.
The court had some incisive questions to ask the Suns in a test to identify the claim as “vexatious.”
For example, the statement of claim doesn’t say how the brokerage or the B.C. insurer were responsible for the damages. It also doesn’t state why Zhao’s refusal to drive is alleged to have disrupted apparently highly profitable vacation rental property operations, the court noted.
“The statement of claim provides little information on those ‘vacation rental property operations’ nor does [it] provide any basis to link how Zhao’s not being a motor vehicle operator somehow collapsed a business operated by three partners,” the court decision states. “The statement of claim indicates Zhao apparently is willing to use taxi services. Why would that alternative, or even a paid driver, not suffice to maintain a business whose income is claimed to range into the millions of dollars?”
As for the claim for lost income, the court observed: “Tong Sun’s claims of future economic success appear to have no basis other than wishful thinking.”
Rather than dismissing the action outright, the court used CPN7 to require the plaintiffs to clarify how their statement of claim is not an abuse of court. They have two weeks to respond, at which point the court reserves the right to toss their claim out of court.
Feature image courtesy of iStock.ca/Ivan-balvan