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Little v. Floyd Sinton Limited, 2019 ONCA 865 (Tulloch, Roberts and Miller JJ.A.), November 4, 2019
This appeal arose from a young girl’s tragic leap from the back of a moving school bus.
The incident occurred in June 2011, on the last day of the school year. Thirteen year old Sarah Little had just completed Grade 8, and was taking her last bus ride home before summer vacation. Prompted by an informal tradition among graduating students, Little decided to jump from the back of the school bus as it neared her stop.
She suffered a catastrophic head injury from which she will never recover. It was undisputed that she is incapable with respect to her personal care and property and will likely never to be able to live a normal life.
Little had been trained as a bus patroller and knew how to open the emergency door at the back of the bus. She also understood the dangers of jumping from a moving vehicle, and many of her bus mates had tried to dissuade her, reminding her of the danger of what she planned to do.
Nonetheless, Floyd Sinton Limited, the company which operated the school bus, and the appellant in this appeal, was found to be seventy-five percent liable for Little’s damages because it failed to follow clear expectations set out in its own handbook, by its “failure to report re-occurring unsafe acts”. While one of Floyd Sinton’s drivers had reported students jumping from the buses on the last day of school to the company’s owner, these incidents were not reported to the school. The principal of Little’s school testified that if these incidents had been reported, proactive steps would have been taken to curtail the activity.
Little, who was found to be twenty-five percent contributorily negligent, was awarded damages in the amount of $7,032,600, plus pre-judgment interest and costs. Kristina Dodds, Little’s mother, guardian for care and property, and litigation guardian, was awarded $4,730.56 in damages for loss of care, guidance and companionship under the Family Law Act, R.S.O. 1990, c. F.3, s. 61.
Floyd Sinton took no issue with the jury’s finding that it breached its standard of care or with the quantum of damages awarded as they related to Little’s injuries. The company argued, however, that Little’s damages ought to be reduced, or a new trial ordered, because of errors that it alleged the trial judge made which led to a liability verdict that was unreasonable and unjust.
Specifically, the appellant submitted that in her charge to the jury, the trial judge misstated the law of negligence and causation and that, as a result, the jury made unclear causation findings and assessed its proportion of liability higher and Little’s proportion of contributory negligence lower than they would have otherwise done.
Justice Roberts rejected this argument, explaining that the question is whether the charge to the jury provided the jury with adequate assistance to determine the questions it had to decide, and found that it did. She noted that the trial judge clearly identified the factors that led to Little’s injuries, including the appellant’s failure to report previous incidents of students jumping from the bus and Little’s own actions, and explained how these factors related to the parties’ negligence theories. The trial judge correctly explained the difference between the issues of causation and apportionment of liability, and properly reviewed the “but for” test for causation. Justice Roberts also pointed out that counsel for the parties drafted this portion of the charge and no objection was taken to it.
Justice Roberts emphasized that the standard of review of a civil jury verdict is “exceptionally high”, and should only be set aside where it is so plainly unreasonable and unjust that no jury reviewing the evidence as a whole and acting judicially could have arrived at that verdict. She concluded that that threshold was not met here.
The appellant also submitted that the trial judge erroneously instructed the jury that as a matter of law, it could not reduce Little’s damages for a failure to mitigate by not implementing specific treatment recommendations. It argued that this question was one for a trier of fact to decide and that there was enough evidence for the issue to have gone to the jury.
While she agreed that the trial judge erred in removing the question of mitigation from the jury, Roberts J.A. held that these errors occasioned no miscarriage of justice, since it would not have affected the trial outcome. Moreover, the appellant did not meet its onus of proving that Little had failed to mitigate her damages. There was no medical expert evidence that her prognosis would have been different and that her damages would have been reduced had she received the recommended treatment.
Justice Roberts did agree with the appellant’s submission that the trial judge erred in failing to reduce Little’s damages by the amount of statutory accident benefits she received prior to trial, as required by sections 267.8(4) and (8) of the Insurance Act, R.S.O. 1990, c. I.8. Because the parties had differing views as to whether they had agreed that past statutory benefits would be deducted or not, this issue was remitted to the Superior Court for determination.
The appeal was allowed in part.
National Steel Car Limited v. Independent Electricity System, 2019 ONCA 929 (Lauwers, van Rensburg and Trotter JJ.A.), November 27, 2019
The Court of Appeal heard National Steel Car Limited’s appeal from the dismissal of its claim that the feed-in-tariff program that encourages the development of renewable electricity is an unconstitutional tax. The court allowed the appeal, which was argued by Earl Cherniak, along with Jerome Morse and David Trafford of Morse Shannon.
The electricity pricing formula in Ontario is administered by the Independent Electricity System Operator under the Electricity Act, 1998, S.O. 1998, c. 15, as amended by the Green Energy and Green Economy Act, 2009, S.O. 2009, c. 12. When it sets electricity prices, the IESO makes a “Global Adjustment” to the price of electricity, a component of which funds electricity procurement contracts under the feed-in tariff program.
National Steel Car Limited, a manufacturer of steel rail cars and a heavy user of electricity, alleges that the FIT program is responsible for the dramatic price increase in the cost of electricity in Ontario.
The appellant’s position is that that the FIT program was designed to achieve social goals unrelated to the generation of electricity, namely remedying the economic harm suffered by certain communities as a result of the 2008 economic crisis. It argues that because the true purpose of the Global Adjustment was to provide economic stimulus and subsidies to these communities, it is not really a regulatory charge but in fact a tax, aimed at achieving broader societal goals. And, because the Global Adjustment was not enacted as a tax, the appellant asserts that it is unconstitutional under section 53 of the Constitution Act, 1867 and in breach of the Taxpayer Protection Act, 1999, S.O. 1999, c. 7, which required the government to seek approval of the Global Adjustment by a referendum.
The appellant brought two applications for declarations in favour of its arguments, under Rule 14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 19. The respondents did not address these applications, instead bringing a motion under Rule 21.01(1)(b) to strike each application on the ground that it discloses no reasonable cause of action.
The motion judge ruled on the merits of the applications, holding that the Global Adjustment was a regulatory charge and not a tax and that it could not be a tax because of the way the pricing formula was constructed as a “closed system”. She struck the applications on the basis that it was plain, obvious, and beyond doubt that they could not succeed. She further held that if the Global Adjustment was indeed a tax, its enactment complied with section 53 of the Constitution Act, 1867. In light of her conclusion that the Global Adjustment was not a tax, the motion judge did not address the application of the Taxpayer Protection Act.
The Court of Appeal held that the motion judge erred in dismissing National Steel Car Limited’s claim on a pleadings motion.
Writing for the court, Lauwers J.A. held that the appellant’s central claim—that the Global Adjustment is a “colourable attempt to disguise a tax as a regulatory charge”—is sufficiently plausible that the applications should not have been dismissed on a pleadings motion before the development of a full record and, further, that it is not plain, obvious and beyond doubt that the applications could not succeed.
Ontario has power to levy direct taxes under section 92(2) of the Constitution Act, 1867 to raise revenue for provincial purposes. While the federal government can levy indirect taxes, Ontario cannot. The province can, however, levy regulatory charges within certain limits.
The Supreme Court of Canada has provided much guidance on the often subtle distinctions between regulatory charges and taxes.
As the nation’s highest court explained in Westbank First Nation v. British Columbia Hydro and Power Authority, [1999] 3 S.C.R. 14, when determining whether a levy is a regulatory charge or a tax,
the central task for the court is to determine whether the levy's primary purpose is, in pith and substance: (1) to tax, i.e., to raise revenue for general purposes; (2) to finance or constitute a regulatory scheme, i.e., to be a regulatory charge or to be ancillary or adhesive to a regulatory scheme; or (3) to charge for services directly rendered, i.e., to be a user fee.
Because the characteristics of a tax will likely apply to most government levies, the Supreme Court clarified in 620 Connaught Ltd. v. Canada (Attorney General), 2008 SCC 7, that a government levy would be in pith and substance a tax if it was unconnected to any form of a regulatory scheme. A levy’s “pith and substance” is its dominant or most important characteristic, which is distinct from its incidental features.
The Supreme Court explained in 620 Connaught that in determining whether a government levy is a tax or a regulatory charge, the court must first identify the existence of a regulatory scheme, the indicia of which are:
(1) a complete, complex and detailed code of regulation; (2) a regulatory purpose which seeks to affect some behaviour; (3) the presence of actual or properly estimated costs of the regulation; (4) a relationship between the person being regulated and the regulation, where the person being regulated either benefits from, or causes the need for, the regulation.
Once the court has identified the regulatory regime, the second step is “to find a relationship between the charge and the scheme itself.”
The Supreme Court added in 620 Connaught that “[w]here the connection between the use of the revenues generated from a government levy and the persons being regulated is doubtful, the courts will scrutinize the facts to ensure that the Constitution is not circumvented by executive or bureaucratic edict.”
The appellant invoked this doubt when it argued that the FIT program component of the Global Adjustment is not related to the regulatory scheme, but was inserted into the electricity pricing formula in order to achieve a collateral purpose, namely generating revenue surplus for the benefit of the certain communities. It submitted that “the government intentionally disguised the Global Adjustment within the complex regulatory scheme for electricity in pursuance of its colourable attempt to tax through regulation.”
The motion judge rejected this argument. Applying the test set out in 620 Connaught, she found that there was a regulatory regime, that the regime has a regulatory purpose, and that there is a sufficient relationship between the levy and the regulatory scheme. She concluded on this basis that “it is plain, obvious and beyond doubt that the Global Adjustment is not a tax”.
In Lauwers J.A.’s view, however, this conclusion was premature.
While he noted that the motion judge identified the correct test for distinguishing a tax from a regulatory charge, Lauwers J.A. held that her analysis ultimately bypassed the appellant’s colourability challenge and the evidence.
The motion judge relied on the fact that the legislation expressly authorizes the FIT program. Justice Lauwers pointed out, however, that the mere fact of express legislative authority does not immunize the program from challenge. The colourability doctrine requires a careful assessment of the legislation and the underlying intent. While the purpose of a levy is sometimes evident on the face of legislation, other times it is more difficult to determine and requires more evidence than the words of the legislation itself. Justice Lauwers rejected the respondent’s argument that the colourability challenge must be limited to the fact of the legislation, noting that this would not be consistent with the case law.
Justice Lauwers noted that the motion judge failed to address a number of questions in her application of the 620 Connaught test. Most significantly, she bypassed the critical question of whether the dominant purpose of the FIT program was to generate useful electricity or to produce a revenue surplus for redistribution to certain communities. The “closed system” analysis adopted by the motion judge also failed to address this question. The motion judge assumed the government’s good faith in setting up this system, but this is precisely what the appellant has challenged.
Justice Lauwers concluded that it is not plain, obvious and beyond doubt that the applications could not succeed. The merits should not have been determined without the development of a full record. He also held that the potential applicability and effect of section 53 of the Constitution Act, 1867 and the Taxpayer Protection Act deserve more thorough consideration.
The appeal was allowed, and the application remitted to the Superior Court to be heard on the merits.
Ontario (Attorney General) v. Bogaerts, 2019 ONCA 876 (Sharpe, Hourigan and Roberts JJ.A.), November 14, 2019
Jeffrey Bogaerts is a paralegal who was given public interest standing to challenge certain provisions of the Ontario Society for the Prevention of Cruelty to Animals Act. Bogaerts questioned the constitutionality of the statutory authority conferred upon inspectors and agents designated by the Ontario Society for the Prevention of Cruelty to Animals to exercise the powers of a peace officer in the enforcement of laws pertaining to the welfare and prevention of cruelty to animals.
The application judge dismissed Bogaerts’ argument that certain provisions in the Ontario Society for the Prevention of Cruelty to Animals Act, R.S.O. 1990, c. O.36 infringed section 8 of Charter guaranteeing the right to be secure against unreasonable search and seizure. The application judge did, however, accept Bogaerts’ submission that some of the OSPCA’s search and seizure provisions violated the section 7 right not to be denied liberty and security of the person, except in accordance with the principles of fundamental justice. He found that those search and seizure powers engaged the liberty and security of the person interests, and he recognized a novel principle of fundamental justice, namely, that “law enforcement bodies must be subject to reasonable standards of transparency and accountability”. He struck down the sections of the OSPCA conferring the powers of a peace officer on OSPCA officers and agents as well as two sections authorizing search and seizure.
The Attorney General of Ontario appealed the section 7 order striking down three sections of the OSPCA, while Bogaerts cross-appealed the dismissal of the section 8 argument and sought to add that “law enforcement bodies must be funded in such manner to avoid actual or perceived conflicts of interest or apprehension of bias” as an additional principle of fundamental justice.
The Court of Appeal allowed the appeal and dismissed the cross-appeal, upholding the constitutionality of the impugned provisions.
Writing for the court, Justice Sharpe rejected the respondent’s submission that the application judge erred by dismissing the section 8 claim, satisfied that the impugned provisions do not violate the right to be secure against unreasonable search and seizure. As the application judge observed, this case deals with a regulatory rather than a criminal matter, where a “less strenuous and more flexible standard of reasonableness” applies. Further, these provisions dealt less with gathering evidence and more with the prevention and alleviation of harm to animals, in which case the expectation of privacy comes second to the prevention of more serious harm or even death.
As Sharpe J.A. explained, entry under the impugned provisions is only permitted where the owner or custodian has already been ordered to act to relieve an animal’s distress, and seizure is only permitted where an animal is found in distress and the owner or custodian is not present and cannot be found promptly. This provides a sufficient safeguard against unreasonable search and seizure.
Justice Sharpe held that the application judge did err, however, in concluding that the impugned provisions engaged the liberty and security of the person interests protected by section 7 of the Charter.
Specifically, Sharpe J.A. found that the application judge erred in law in concluding that because the exercise of the powers conferred by sections 11, 12 and 12.1 of the OSPCA could lead to prosecution, conviction and imprisonment under the offence provisions of that statute, the liberty interest was engaged. Justice Sharpe agreed with the appellant that viewed on their own, the powers conferred by those provisions are too remote from the possibility of conviction and imprisonment to engage the liberty interest. He further found that holding that the risk of imprisonment is possible as an eventual consequence of a search would turn virtually every section 8 challenge into a section 7 challenge as well. That would be wrong and contrary to established authority.
Justice Sharpe held that the application judge also erred in concluding that the impugned provisions engaged the security of the person interest protected by section 7. While he acknowledged that there was no doubt it would be unsettling to have one’s premises or dwelling subjected to a search under the impugned powers, Sharpe J.A. held there was nothing in the record to suggest that a search of that nature would impose the level of state-imposed stress contemplated by the case law.
Justice Sharpe held that the application judge further erred in recognizing a novel principle of fundamental justice, agreeing with the appellant that the proposed new principle meets none of the criteria outlined by the Supreme Court in R. v. Malmo-Levine, 2003 SCC 74. To accept transparency, accountability and adequate funding as a principle of fundamental justice would create uncertainty and necessarily involve the courts in the “adjudication of policy matters”. However, Sharpe J.A. pointed out that the operation of the OSPCA is not entirely devoid of transparency and accountability. If a prosecution is brought by the OSPCA, any searches or seizures are subject to judicial and Charter scrutiny.
Ramkey Communications Inc. v. Labourers’ International Union of North America, 2019 ONCA 859 (Hoy A.C.J.O., Tulloch and Jamal JJ.A.), November 1, 2019
This appeal raised the question of whether Ontario’s presumptive jurisdiction over labour relations within its boundaries has been displaced through the operation of “derivative jurisdiction”, such that federal labour laws apply to construction labourers employed in Ontario by the respondent, Ramkey Communications Inc.
On August 5, 2015, the appellant, Labourers’ International Union of North America, Ontario Provincial District Council, applied to the Ontario Labour Relations Board for certification under the construction industry provisions of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A, as amended, of all of Ramkey Communications Inc.’s construction labourers employed in six Ontario counties, except for those in the industrial, commercial and institutional sector, and persons at or above the rank of non-working foremen. These construction labourers were a subset of Ramkey’s employees in Ontario.
Ramkey opposed certification.
It argued that its construction labourers—which is refers to as “construction technicians”—performed essential work for federally regulated telecommunications companies, primarily Rogers, and that their labour relations should therefore be federally regulated.
The Board was not satisfied that the presumption of provincial jurisdiction was displaced and granted certification as a provincially regulated bargaining unit.
Ramkey sought judicial review of that decision.
The Divisional Court found that Ramkey’s construction technicians were engaged derivatively in work that is vital, essential, or integral to a federal undertaking and, therefore, should be federally regulated. It quashed the Board’s decision.
The Court of Appeal allowed the Union’s appeal from that decision, holding that the lower court misapplied the test for derivative federal jurisdiction.
Associate Chief Justice Hoy explained that the Divisional Court erred by considering the extent to which the delivery of telecommunications services by Rogers and other telecommunications companies was dependent on having a functioning network line and on work of the type performed by Ramkey’s construction technicians. The proper focus, according to the decision of the Supreme Court of Canada in Tessier Ltée v. Quebec (Commission de la santé et de la sécurité du travail), 2012 SCC 23, is the extent to which Rogers and the other telecommunications companies were dependent on the services of Ramkey’s construction technicians.
Given the clear findings by the Board that Rogers was not dependent on Ramkey’s construction technicians, Hoy A.C.J.O. concluded that this is not a case where derivative federal jurisdiction can be found. Accordingly, provincial labour jurisdiction over the construction technicians is not displaced.
Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882 (Hourigan, Benotto and Fairburn JJ.A.), November 8, 2019
This appeal raised the question of whether the two-year limitation period in the Insurance Act and the Statutory Accident Benefits Schedule is subject to discoverability.
The appellant, Sotira Tomec, was struck by a motor vehicle on September 12, 2008. She was hospitalized and required surgery. Tomec applied to her insurer, the respondent, Economical Insurance Corporation, and received statutory accident benefits for attendant care and housekeeping, pursuant to sections 18 and 22 of the Statutory Accident Benefits Schedule - Accidents On or After November 1, 1996, O. Reg. 403/96.
On August 26, 2010, the insurer advised the appellant by letter that she would not qualify for these benefits past September 12, 2010, because her injuries did not rise to the level of catastrophic impairment based on the medical evidence available.
In cases of a “catastrophic impairment”, the 104-week time limit under the SABS does not apply.
Over the next few years, Tomec’s condition worsened. On May 13, 2015, her doctor determined that she now met the definition of catastrophic impairment and that her condition was the result of the September 12, 2008 accident.
On November 4, 2015, Economical accepted that the appellant was catastrophically impaired and provided elevated statutory accident benefits on that basis. However, it refused to provide further attendant care and housekeeping benefits, either for the intervening period between September 2010 and November 2015, or at any point going forward. The respondent took the position that it had denied the benefits in its August 26, 2010 letter, and the appellant was out of time based on the two-year limitation period in section 281.1(1) of the Insurance Act, R.S.O. 1990, c. I.8 and section 51(1) of the SABS, both of which provide that any dispute over benefits must be brought within two years of the insurer’s refusal to pay benefits.
Tomec challenged Economical’s decision before the License Appeal Tribunal.
The LAT dismissed the application, holding that the doctrine of discoverability does not apply to “hard” limitation periods, and that Economical’s letter of August 26, 2010 letter triggered it.
On the judicial review application, the Divisional Court held that the LAT’s decision was reasonable. It held that the legislature intended to enact a hard limitation period triggered by a fixed event in order to give the insurer a reasonable time period before it could determine that its obligation was discharged.
Following the Divisional Court’s decision, the Supreme Court of Canada released its decision in Pioneer Corporation v. Godfrey, 2019 SCC 42, providing guidance with respect to when a limitation period should be construed as a hard limitation.
The Court of Appeal allowed Tomec’s appeal, holding that the two-year limitation period in section 281.1(1) of the Insurance Act and section 51(1) of the SABS is subject to discoverability.
Writing for the court, Justice Hourigan held that it is unreasonable to construe the relevant limitation period as a hard limitation period. As he explained, there is only one reasonable interpretation of section 281.1(1) of the Insurance Act and section 51(1) of the SABS: the limitation period contained in those sections is subject to the rule of discoverability because it is directly tied to the cause of action that an insured can assert when denied benefits. A hard limitation period is inconsistent with the purposes of the SABS.
Hourigan J.A. held that a hard limitation period is also contrary to the recent decision in Pioneer Corporation v. Godfrey. As the Supreme Court of Canada held in that case,
where the running of a limitation period is contingent upon the accrual of a cause of action or some other event that can occur only when the plaintiff has knowledge of his or her injury, the discoverability principle applies in order to ensure that the plaintiff had knowledge of the existence of his or her legal rights before such rights expire.
This means that the analysis is not focused on whether a limitation period is tied to a fixed event; rather, the question is whether the limitation period is related to the cause of action or the plaintiff’s knowledge.
Justice Hourigan rejected the respondent’s submission that its refusal to pay a benefit referenced in section 281.1(1) of the Insurance Act and section 51(1) of the SABS is a specific event that is not tied to a cause of action.
As the Supreme Court of Canada in Pioneer explained:
In determining whether a limitation period runs from the accrual of a cause of action or knowledge of the injury, such that discoverability applies, substance, not form, is to prevail: even where the statute does not explicitly state that the limitation period runs from ‘the accrual of the cause of action’, discoverability will apply if it is evident that the operation of a limitation period is, in substance, conditioned upon accrual of a cause of action or knowledge of an injury.
In this case, the respondent’s refusal to pay a benefit is directly tied to the appellant’s cause of action. Absent a refusal to pay the benefit sought, there is no claim to be made.
Justice Hourigan noted that the appellant falls within a small category of victims who suffer from lasting and very serious health impacts as result of a motor vehicle accident, and that the SABS is supposed to maximize benefits for that class of victims. A hard limitation period would prevent the appellant from making a claim for the benefits the SABS are intended to provide.
Hourigan J.A. noted that a hard limitation period would bar the appellant from claiming enhanced benefits before she was even eligible for those benefits. He also pointed out that if she had not claimed any benefits whatsoever until she obtained catastrophic impairment status in 2015, the appellant would not be caught by the limitation period, but if she had obtained this status before 2012, a hard limitation period would not bar the appellant’s claim for enhanced benefits. This outcome, in Hourigan J.A.’s view, would be a “Kafkaesque” absurdity.
The Court of Appeal held that the LAT’s and the Divisional Court’s orders could not stand. It made an order declaring that the limitation period regarding the appellant’s entitlement to attendant care benefits and housekeeping and home maintenance benefits has not expired, allowing her to proceed with her application for those benefits.
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