Canada: Top 5 Civil Appeals From The Court Of Appeal (October 2012)

Last Updated: October 24 2012
Article by Andrew C. Murray

1.  Pastore v. Aviva Canada Inc ., 2012 ONCA 642 (Rosenberg and Feldman, JJ.A and Swinton, J. (ad hoc)), September 27, 2012

2.  Doobay v. Diamond, 2012 ONCA 580 (Lang, Epstein and Hoy, JJ.A.), September 7, 2012

3.  Aragona v. Aragona, 2012 ONCA 639 (Cronk, Epstein and Pepall, JJ.A.), September 26, 2012

4.  Schembri v. Way, 2012 ONCA 620 (Feldman and Hoy, JJ.A and Spence J. (ad hoc)), September 20, 2012

5.  Siena-Foods Limited v. Old Republic Insurance Company of Canada, 2012 ONCA 583 (Laskin, Sharpe and Epstein, JJ.A.), September 10, 2012

 1.  Pastore v. Aviva Canada Inc., 2012 ONCA 642 (Rosenberg and Feldman, JJ.A and Swinton, J. (ad hoc)), September 27, 2012

 This case is an important one to the entire personal injury and insurance law bar, and to every Ontarian; it applies to anyone injured in an automobile accident, whether as a pedestrian, passenger, or driver.

 Ontario motorists carry automobile insurance under a mandatory private auto insurance regime, in which certain no-fault benefits are provided under a standard government pre-approved auto policy.  Automobile accident victims are entitled to certain no-fault benefits, also known as "statutory accident benefits," regardless of fault.  Individuals with the most serious of injuries are eligible to receive an enhanced level of accident benefits. The term used in the Statutory Accident Benefits Schedule ("SABS") to distinguish those who are eligible for the enhanced benefits, from other accident victims, is "catastrophic impairment".  In Pastore, Feldman J.A. clarified one of the several tests that define who suffers a "catastrophic impairment". 

 While there are several different ways that one can be found to suffer from a catastrophic impairment, Pastore deals with the test applicable for "mental or behavioural disorders".  Ms. Pastore was a pedestrian who was hit by a car while crossing the street.  An assessment of her accident-related mental or behavioural disorders was carried out by reference to the American Medical Association's Guides to the Evaluation of Permanent Impairment, 4th Edition, as mandated by the SABS.  The Guides direct the assessment of functioning in four categories of functional limitation:

  1. Activities of daily living;
  2. Social functioning;
  3. Concentration, persistence, and pace;  and
  4. Deterioration or decompensation in work or work-like settings.

Ms. Pastore's initial application for a catastrophic impairment designation was denied by Aviva Canada.  The dispute was heard before an arbitrator of the Financial Services Commission of Ontario.  Her application was accepted by the arbitrator.

 One of the issues raised by Aviva Canada at arbitration was whether the test required an overall assessment of "marked impairment" or "extreme impairment" in all four of the categories described above, or whether a marked/extreme impairment in a single category alone was sufficient.  The arbitrator was satisfied that one marked impairment alone was enough to comply with the Guides' approach to catastrophic impairment.

 On appeal, the Court of Appeal addressed the appropriate standard of review.  Following the decision of the Supreme Court in Dunsmuir v. New Brunswick, the court noted that the Financial Services Commission of Ontario, as a specialised tribunal, must be accorded deference.  As such, the correct standard of review was the reasonableness standard.  The Court of Appeal determined that it was a reasonable initial decision to find that a single category of impairment that was either marked or extreme was sufficient to meet the test for catastrophic impairment.  Ms. Pastore was, consequently, found to be catastrophically impaired. 

 The Court of Appeal has affirmed the specialized knowledge of arbitrators at the Financial Services Commission of Ontario, the need for a broad, liberal, and inclusive approach when determining access to the SABS, and clarified the previous test for assessing those suffering from mental and behavioural disorders.  This decision lends clarity to a long-debated area of personal injury law.

2.  Doobay v. Diamond, 2012 ONCA 580 (Lang, Epstein and Hoy, JJ.A.), September 7, 2012

 In this appeal, Epstein J.A., for the Court of Appeal, answers the question "how sharp are the teeth in a contempt of court order?"

Anthony Diamond refused to answer any questions at an Examination in Aid of Execution.  A Master's order compelled him to re-attend to answer all proper questions, but he again refused to answer a substantial number of the required questions.  On consent, a further Master's order required Diamond to provide written answers to all but one of the outstanding questions that he had been asked (406 questions in total).  Anthony Diamond failed to provide a response by the deadline imposed in the Master's order, and his creditor was not content with the answers, bringing a contempt motion.

 Following a three-day hearing which concluded that all but 70 answers to questions were largely unresponsive and must be considered to be a deliberate attempt to obfuscate the issue, Mr. Diamond was sentenced to 21 days in prison and had a fine imposed against him of $20,000.00.  He continued to disobey the court orders and a further contempt motion was brought, resulting in an enhanced sentence for contempt of 42 days incarceration, and an additional fine of $40,000.00.

 Some of what was argued before the Court of Appeal was fact-specific, but the decision leaves no doubt about the appropriateness of the order below.  One interesting argument was that of double jeopardy because of the two separate orders of imprisonment each with their own monetary penalty.  In the words of the court, "the coercive tool of civil contempt must have teeth".  The double jeopardy ground of appeal was rejected, along with the other grounds.  The appeal was dismissed.  The teeth were sharp indeed.

 3.  Aragona v. Aragona, 2012 ONCA 639 (Cronk, Epstein and Pepall, JJ.A.), September 26, 2012

 This appeal considered the conduct of a guardian of property, specifically a son looking after the property of his mother who suffered from Alzheimer's disease.

 In the course of dealing with a passing of an account, the application judge found that Beniamino Aragona transferred, without convincing explanation, a significant sum of money from his mother's investment account into his own account.  At that stage, he was ordered to reimburse the Estate a payment of $132,628.00.  There was also a finding that unjustified legal expenses in the management of his mother's property had been incurred, which were also ordered to be reimbursed.  Beniamino Aragona was found to be disentitled to compensation for his work as a guardian of his mother's property given his conduct, and was ordered to personally pay the costs of the application himself.  All aspects of the application order were appealed.

The Court of Appeal rejected an initial argument that Beniamino Aragona did not receive a fair hearing.  This was largely a factual analysis rather than a legal analysis.  The court was mindful that the Substitute Decisions Act, 1992, S.O. 1992, c.30 specifically provides the guardian of property with a fiduciary obligation to carry out his obligations honestly and with due care and attention.  A core feature of this obligation is the duty to be in a position at all times to prove the legitimacy of disbursements made on behalf of an estate.  Beniamino Aragona's history demonstrated mismanagement and a blatant disregard of his obligations as a guardian.

The sufficiency of the application judge's reasons was also attacked, but this argument was found to have no merit given the reasons in support of the decision to order repayment of the $132,628.00 amount to the Estate.  Citing Law Society of Upper Canada v. Neinstein, 2010, 317 D.L.R. (4th) 419, the court concluded that, when the adequacy of reasons is raised as a ground of appeal, the court should focus on whether the reasons explain what was decided and why that decision was made.  Ultimately, the reasons did permit reasonable appellate review; no effect was given to that ground of appeal.

Given the strong language used to describe Beniamino Aragona's conduct, which the application judge found to be "shocking" as "he has literally helped himself to many thousands of dollars from his mother's Estate at a time when his mother had Alzheimer's and was unable to look after her own affairs", the Court of Appeal upheld the order depriving him of compensation for his guardianship responsibilities.

4.  Schembri v. Way, 2012 ONCA 620 (Feldman and Hoy, JJ.A and Spence J. (ad hoc)), September 20, 2012

This decision arises from a pleadings motion and offers yet another look at the circumstances when a motions judge should  permit amendments to a Statement of Claim to add a new remedy and new parties.  At first instance, a new remedy, being an oppression claim, was rejected by the motion judge, and leave to add two new parties was also denied.

The underlying subject matter of the claim related to allegations that the defendants fraudulently deprived the plaintiffs of profits under a joint venture agreement.  After the initial action was commenced, the plaintiffs later sought to add a number of additional parties, based on new information gleaned from cross-examinations on affidavit material (relating to the appointment of a receiver and manager).  The allegation was that these new parties improperly received money from the joint venture.  As part of the oppression remedy, the plaintiffs sought to add a claim for a redistribution of certain shares.

The Court of Appeal referred to Anderson Consulting v. Canada (Attorney General), (2001), [2002] 150 O.A.C. 177, noting that the law is clear that, unless the facts alleged are based on assumptive or speculative conclusions that are incapable of proof, they must be accepted as proven, and the Court should not look beyond the pleadings to determine whether the action can proceed.  The Court of Appeal allowed the appeal with respect to the addition of the new defendant on the issues of conspiracy to injure and inducing breach of contract.

Important to the Court of Appeal's analysis was the fact that the new parties which were sought to be added were being brought into the action within the existing limitation period, such that it would have been possible, in any event, to simply institute an entirely new action and then have the two actions joined together.

With respect to the oppression remedy, the Court of Appeal felt it best to leave to the trial judge to determine what was appropriate based on the evidence and the submissions at the time of trial, noting that there was little merit in attempting to fetter the discretion of the trial judge at the pleadings stage, having regard for the broad language of Rule 26 of the Rules of Civil Procedure and the case law interpreting that Rule.

5.  Siena-Foods Limited v. Old Republic Insurance Company of Canada, 2012 ONCA 583 (Laskin, Sharpe and Epstein, JJ.A.), September 10, 2012

This decision illustrates, once again, how complicated and confusing automobile insurance law can be in Ontario.  Siena rented a truck from Ryder Canada to transport a machine.  In transit, there was a head-on collision with another vehicle, which damaged the machine.  Siena sought compensation for the damage from Ryder's insurer, the Old Republic.  Old Republic denied coverage, which denial was upheld by a motion judge.

On appeal, Siena's main contention was that the motion judge failed to give effect to the Direct Compensation-Property Damage provisions in the standard Ontario Automobile Policy, which are provisions authorized by s.263 of the Insurance Act, R.S.O. 1990, c.I-8.  That argument was accepted by Laskin J.A. writing for the court.

Laskin J.A. analyzed the provisions of s. 247 of the Insurance Act located in the part of the statute under the heading of "Motor Vehicle Liability Policies".  It permits an insurer to exclude liability coverage for loss or damage to property carried in the insured vehicle.

Section 3.5.1 of the Ontario Automobile Policy tracks s. 247(b) of the Insurance Act, stating that an insurer will not cover claims for damage to property carried in the insured's vehicle.  What the motion judge did not consider, unlike Laskin J.A., was that this provision did not apply to the Siena claim because s.3.5.1 is found in the section of the Auto Policy dealing with liability coverage, meaning it has nothing to do with Siena's claim for damage to its own property.

Instead, the applicable statutory provision, when dealing with one's own property, is s. 263 of the Insurance Act.  As noted by the Court, this section replaced the tort system and subrogation for property damage claims by imposing a direct compensation regime for property claims through auto insurance, with the desire of reducing transaction costs.  Under s.263 and the companion provisions of the Auto Policy, the insured, Ryder Trucks, would be entitled to coverage from its insurer, Old Republic, for damage to its truck and contents.  The Court was satisfied that the terms of the policy between Ryder and Old Republic also, therefore, extended to a lessee, Siena, who had rented the truck.  Essentially, Siena, as a lessee, must be treated as an insured and Old Republic must be its insurer, for the purposes of Siena's property damage claim. Sienna was entitled to claim its property losses from Old Republic, to the extent that its driver was not at fault for the accident.

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