Canada: Court Of Appeal Summaries (September 2 To September 5)

Last Updated: September 15 2014
Article by John Polyzogopoulos

Hello again. Topics in this week's three decisions include punitive damages for bad faith claims in the insurance context, summary judgment, and an interesting estates law decision on the tension between the claims of beneficiaries under a will and the claims of living spouses under the Succession and Law Reform Act.

Fernandes v Penncorp Life Insurance Company, 2014 ONCA 615

[Juriansz, Pepall and van Rensburg JJ.A.]
P.J. Pape and S. Goudarzi for the appellant
D.J. Fife and M.A. Cameron for the respondent

Keywords: Disability insurance, total disability, punitive damages, aggravated damages, mental distress damages, Fidler v Sun Life Assurance, Pilot v Whiten Insurance, duty of good faith, appellate review of damage awards


The respondent operated a bricklaying business. In December 2004 he injured his back, rendering him unable to work. He submitted a claim to the appellant insurer under a disability insurance policy. The policy entitled the respondent to two years of total disability benefits if he was unable to perform any of the important daily duties of his occupation and was not gainfully employed in any other occupation or profession. After two years, he was entitled to total disability benefits if he was unable to work in any and every occupation for which he was reasonably fitted by education, training or experience. The policy also entitled the respondent to four months of partial disability benefits.

The respondent asserted that he could not perform his duties as a bricklayer. This was corroborated by both parties' medical evidence. However, after seven months of making payments, the appellant terminated the respondent's benefits on the basis of a surveillance report showing the respondent working in his back yard and around his house. This report, the appellant contended, showed that the respondent did not meet the definition of total disability as defined in the policy. The appellant did not tell the respondent that his benefits had been terminated until five months later.

The trial judge found that the respondent met the definition of total disability and awarded damages for breach of contract plus the return of premiums. The trial judge also found that the appellant had not dealt with the respondent in a fair and balanced manner and that the appellant's claims advisor had taken an adversarial approach to the respondent's claim. This met the test for punitive damages and $200,000 was awarded. Finally, the trial judge considered the respondent's claim for aggravated damages (referred to as "mental distress damages") and awarded $100,000, but gave no reasons for the quantum.


  1. Did the trial judge err in awarding punitive damages?
  2. Did the trial judge err in the quantum of the mental distress damages award?


The appeal of the punitive damages award was dismissed and the appeal of the mental distress damages award was allowed.


  1. No. Pepall J.A. rejected the appellant's arguments with respect to the punitive damages award. There was evidence to support the trial judge's conclusion that punitive damages were warranted. It was reasonable on the evidence to conclude that the appellant's claims advisor ignored the detailed job description that had been provided by the respondent. It was also reasonable for the trial judge to conclude that the surveillance video did not establish the respondent's ability to work as a bricklayer, and reasonable to conclude that the respondent was totally disabled from working as a bricklayer. Implicit in these findings is that the trial judge considered it unreasonable to conclude that the respondent was partially disabled or a malingerer. Lastly, the trial judge did not err in failing to appreciate that the claims advisor tried to settle the respondent's claim on the basis of partial disability. The trial judge made an express finding that the appellant's conduct demonstrated bad faith. There was no medical evidence to dispute the respondent's full disability.
  2. Yes. There was no explanation of how the trial judge arrived at the figure of $100,000 or what facts justified such an amount. The award was inordinately high and entirely disproportionate, where the evidence was that circumstances apart from the appellant's conduct contributed to the respondent's psychological distress. Mental distress damages are to be compensatory, not punitive. Moreover, the respondent had only sought $25,000 in mental distress damages. The aggravated damages award was reduced from $100,000 to $25,000, and the costs of trial, which had been awarded on a full indemnity basis in the amount of $212,130.66, were reduced by $30,000.

York Trafalgar Corporation v. Symphony Golf Inc., 2014 ONCA 619

[Doherty, Laskin and Epstein JJ.A.]
Paul H. Starkman, for the appellants
James A. LeBer, for the respondent Philips Engineering Ltd.

Keywords: Summary Judgment, Negligence, Liability, Planning and Re-zoning, Breach of Contract, Real Estate, Diminution in Value


This appeal arises from a decision of Morgan J. in which he granted summary judgment dismissing the action against the respondent, Philips Engineering Ltd. ("Philips").Two families, the Gruehls and the Comarins, put two parcels of land together to develop a golf course. For the purpose of developing the golf course, a limited partnership, Piper's Heath Golf Links Limited Partnership, ("Piper's LP") was formed.

Philips performed planning and re-zoning services in connection with the golf course and the appellants alleged that such actions were performed negligently and in breach of their contract with Piper's LP. Philips brought a motion for summary judgment seeking a dismissal of the action against it on the basis that even if Philips were found negligent and/or in breach of contract, any resultant decrease in the value of the land caused no loss to the appellants.

The motion judge held that a claim to recover diminished value of land can only be claimed by the owner of that land. The land was owned not by Piper's LP but by Comarin. However, Comarin had no claim against Philips as it purchased the land from the previous owners, Lina and Flavio Comarin, after the alleged diminution of value took place.


Did the motion judge err in finding that the appellants have no claim against Philips?


No. Appeal Dismissed.


Comarin purchased its 100 acres from Lina and Flavio for fair market value after the alleged diminution in value took place. Any loss suffered due to Philips' services was incurred by Lina and Flavio. Piper's LP does not own the lands said to have suffered a diminution of value. Comarin bought the lands in issue for its already diminished value. The contractual relationship between Philips and Piper's TP does not change this.

Cowderoy v. Sorkos Estate, 2014 ONCA 618

[Blair, Watt and Lauwers JJ.A.]
K.F. Stevens and R. Birkan-Bradley, for the appellant E. Sorkos
T.L. Wynne and C. Muir, for the respondent, the Estate of K. Sorkos
J.D. Virtue and D.W. Wozniak, for the respondents, P. and M. Cowderoy

Keywords: Statute of Frauds, Part Performance, Proprietary Estoppel, Fresh Evidence on Appeal, Dependant's Relief under the Succession Law Reform Act, Section 71


This appeal concerns two claims against the Estate of K. Sorkos ("The Estate") that the trial judge declined to consolidate.

The first claim was made by the grandsons of the testator's previous common law partner of 40 years who predeceased him ("The Cowderoys"). They claimed entitlement to The Estate's farm and cottage properties, and also for $350,000 each for upkeep of the properties. The trial judge found as a fact that the testator promised the properties to the Cowderoys when they were teenagers in exchange for their manual labour on the properties, but found that the monetary promise lacked proof. The trial judge ordered The Estate to convey the properties, and pay all transfer costs and taxes, on the basis of part performance and proprietary estoppel.

The second claim was an application by the testator's widow, E. Sorkos, for dependant's relief under the Succession Law Reform Act ("SLRA"). The will left E. Sorkos a lump-sum payment and divided The Estate's assets between her and the testator's siblings. She was also the named beneficiary of the testator's Registered Retirement Income Fund. The trial judge determined E. Sorkos was entitled to dependant's relief in priority to the siblings. He directed The Estate to purchase a lifetime annuity to fund her dependant's relief claim.

The Cowderoys appeal the trial judge's refusal to enforce the testator's monetary promise. The Estate appeals the Cowderoy order for conveyance. E. Sorko was granted intervener status in this appeal. She seeks a new trial where both claims can be consolidated to allow for a proper assessment of priority.

In this appeal, the Court granted a motion to adduce fresh evidence about the value of The Estate, which showed that the liabilities of The Estate would exceed its assets after giving effect to the Cowderoy judgment and purchasing the annuity to fund the dependant's relief claim.


  1. Did the trial judge err in refusing to consolidate the claims against The Estate?
  2. Did the trial judge err in ordering The Estate to convey the farm and cottage properties to the Cowderoys?
  3. Are the farm and cottage properties available to satisfy an order for dependant's relief under the SLRA?


The Estate's appeal is allowed. The Cowderoy appeal is dismissed. E. Sorkos' application is remitted to trial on the narrow issue of entitlement to dependant's relief, taking into account the value of The Estate with the farm and cottage properties. Costs of all parties are to be borne by The Estate because the problems with The Estate were caused by the testator.


  1. The trial judge's exercise of discretion to refuse to consolidate proceedings led to errors of law in assessing the priority between the claims of E. Sorkos and the Cowderoys.
  2. Yes. The trial judge erred in classifying the Cowderoys as creditors of The Estate. Because the trial judge found as a fact that the late Sorkos made a promise to bequeath the properties, the trial judge ought to have enforced the promise by deeming the properties to be bequeathed. By ordering The Estate to convey the properties, the Cowderoys were left in a better position than if the late Sorkos fulfilled his promise of bequeathing the properties under his will.
  3. Partially. The Trial Judge failed to consider section 71 of the SLRA, which governs contracts to dispose of property by will. Section 71 states that, to the extent the value of the properties exceeds the value of the labour performed by the Cowderoys, the excess value is available to satisfy claims under the SLRA. The balance of the value of the properties is to be bequeathed to the Cowderoys.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

John Polyzogopoulos
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.