A monthly newsletter from the Appellate Advocacy Group at Lerners LLP
November 2019

Benson v. Belair Insurance Company Inc., 2019 ONCA 840 (Feldman, MacPherson and Simmons JJ.A.), October 25, 2019
 
Bradfield v. Royal Sun Alliance Insurance Company of Canada, 2019 ONCA 800 (Doherty, Harvison Young and Thorburn JJ.A.), October 7, 2019
 
MacLeod v. Marshall, 2019 ONCA 842 (Sharpe, van Rensburg and Thorburn JJ.A.), October 25, 2019
 
McKitty v. Hayani, 2019 ONCA 805 (Doherty, Miller and Paciocco JJ.A.), October 9, 2019
 
Clublink Corporation ULC v. Oakville (Town), 2019 ONCA 827 (Doherty, Nordheimer and Harvison Young JJ.A.), October 23, 2019; Oakville (Town) v. Clublink Corporation ULC, 2019 ONCA 826 (Doherty, Nordheimer and Harvison Young JJ.A.), October 23, 2019


Benson v. Belair Insurance Company Inc., 2019 ONCA 840 (Feldman, MacPherson and Simmons JJ.A.), October 25, 2019

In this decision, the Court of Appeal addressed two appeals together because they raised the same issue, namely the interpretation of provisions of the Insurance Act and the Off-Road Vehicles Act as they apply to out of province accidents. In both cases, an Ontario resident suffered catastrophic injuries as a result of an out of province accident involving a recreational off-road vehicle. Both victims had an Ontario insurance policy for a vehicle they owned in Ontario. In both cases, the insurer denied statutory accident benefits. 

In Perneroski v. Echelon, Ontario resident Christopher Perneroski sustained a traumatic brain injury while riding a dirt bike on a closed track at a sports resort in Union Port, Georgia. Perneroski had a standard Ontario OAP 1 motor vehicle liability policy with Echelon General Insurance Company. Echelon denied Perneroski’s claim for accident benefits on the basis that the dirt bike was not an automobile and therefore the incident was not an “accident” as defined in the SABS Regulation 403/96. 

The motion judge referred to the definition of an automobile in section 224(1) in Part VI of the Insurance Act, R.S.O. 1990, c. I.8. Under that definition, “automobile” includes “a motor vehicle required under any Act to be insured under a motor vehicle policy.” A dirt bike is an off-road vehicle. The Off-Road Vehicles Act, R.S.O. 1990, c. O.4 provides in section 15(1) that: “[n]o person shall drive an off-road vehicle unless it is insured under a motor vehicle policy in accordance with the Insurance Act.” The motion judge held that she would exercise her discretion to apply the law of Ontario, rather than the law of Georgia. However, in the alternative, recognizing that this was not a tort case but a contractual dispute, she applied the law of the jurisdiction where the contract was formed, namely Ontario, and found that Perneroski was entitled to receive SABs.

In Benson v. Belair, Ontario resident Austin Benson was living in British Columbia when he fell off an all-terrain vehicle that was owned and driven by a British Columbia resident. He suffered a severe brain injury. He was the named insured under an Ontario automobile policy issued by Belair Insurance Company Inc. That policy did not list an ATV as an insured vehicle. Belair denied coverage for accident benefits, taking the position that because the accident occurred in British Columbia, the question of whether an ATV constitutes an automobile for Ontario accident benefit purposes was to be determined under the laws of British Columbia which do not require ATVs to be insured as motor vehicles.
 
A Financial Services Commission of Ontario Arbitrator upheld Belair’s denial of accident benefits on the basis that British Columbia law should apply. The Director’s Delegate upheld the Arbitrator’s decision. Benson’s further application for judicial review to the Divisional Court was dismissed on the basis of reasonableness.

Both cases made their way to the Court of Appeal, which held that both insurers are obliged to pay SABs because both vehicles are automobiles that were involved in an accident within the meaning of the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg 34/10 and the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996, O. Reg. 403/96.

Writing for the court, Feldman J.A. held that the courts and tribunals below erred in framing the question as whether the law of Ontario or the law of the jurisdiction where the accidents occurred governed the SABs entitlement issues, applying the legal constructs of lex loci delicti and lex fori. However, as the motion judge in the Perneroski case recognized, the issue before the court was not a tort claim arising out of an accident in another jurisdiction involving an Ontario resident and a local resident, where the choice of law rules must be considered and applied. Rather, the cases turned on the proper interpretation and application of the respective insurance contract provisions and the Ontario statutes that govern SABs entitlement.

In Justice Feldman’s view, when all the relevant provisions are examined, it is clear that Ontario law governs and that the provisions that dictate the result for Ontario incidents dictate the same result for incidents that take place outside of Ontario that are covered under the automobile insurance policy. This result is consistent with the provisions of the Insurance Act, the SABs Regulations, and the contract language, which all state that SABs will be provided whether the incident occurs anywhere in Canada, the United States or the other designated jurisdictions. 

Bradfield v. Royal Sun Alliance Insurance Company of Canada, 2019 ONCA 800 (Doherty, Harvison Young and Thorburn JJ.A.), October 7, 2019

The Court of Appeal heard Royal Sun Alliance Insurance Company of Canada’s appeal from a trial judge’s decision that it is responsible to provide insurance coverage to its insured, the estate of the late Steven Devecseri.  

In May 2006, the respondent Jeffrey Bradfield, Paul Latanski and Steven Devecseri were riding their motorcycles, when Devecseri drove onto the wrong side of the road and collided with Jeremy Caton’s automobile. 

Devecseri was killed and Caton, injured. 

Devecseri was insured by RSA under a standard motor vehicle policy with a $1 million limit. He had an M2 driver’s licence, which prohibited him from operating a motorcycle with any alcohol in his bloodstream. 

In an action brought by Caton, Devecseri and Bradfield were found liable for damages resulting from the accident. The issue of whether RSA was required to provide insurance coverage to Devecseri was not determined. In a second action, the trial judge was asked to determine whether RSA was entitled to take an off-coverage position and reduce the estate’s policy limit from $1 million to $200,000 after it learned that Devecseri had been drinking prior the accident, in violation of the terms of his insurance policy. 

The trial judge held that RSA waived its right to rely on Devecseri’s policy breach because it had taken its off-coverage position too late. He held that Bradfield was entitled to recover judgment in the amount of $800,000 against RSA. 

RSA appealed the trial judge’s finding that it waived its right to deny coverage. It submitted that waiver requires actual knowledge of the breach and that there was no actual knowledge of the breach in this case. Moreover, there was no clear waiver of the breach in writing as required by section 131(1) of the Insurance Act, R.SO. 1990, c. I.8. RSA further claimed that there can be no estoppel, as there was no knowledge of the breach until 2009 and there is no evidence that the defence would have been conducted any differently had it taken an off-coverage position in 2006. Accordingly, there was no detrimental reliance.

Thorburn J.A. agreed with RSA that trial judge erred in holding that it waived its right to deny coverage to Devecseri’s estate. Waiver requires knowledge of the policy breach, and RSA had no actual knowledge that Devecseri breached the policy by consuming alcohol before driving until 2009. Because RSA did not have all of the material facts from which to determine that there was a policy breach, knowledge could not be imputed. Justice Thorburn explained that the knowledge requirement is not whether the insurer could obtain the material facts but whether they did have the material facts necessary to enable them to know of the policy breach. Further, there was no written waiver of the breach. 

Justice Thorburn also agreed with RSA that the trial judge erred in holding that the issue of estoppel was moot. RSA is not estopped from asserting a breach of the policy, as it had no knowledge of the breach until June 2009. Moreover, there was no evidence of detrimental reliance, an essential element of estoppel. 

The appeal was allowed.

MacLeod v. Marshall, 2019 ONCA 842 (Sharpe, van Rensburg and Thorburn JJ.A.), October 25, 2019

The Court of Appeal heard the Basilian Fathers of Toronto’s challenge to the damages in a sexual assault case along with guidance on the calculation of pre-judgment interest in our low interest economy. 

The respondent, Roderick MacLeod, initiated proceedings in 2012 against the Basilians and others in connection with sexual abuse suffered at the hands of a priest while he was a student at St. Charles College, a school run by the Basilians. 

The case went to trial in 2018. The parties agreed that MacLeod had established on a balance of probabilities that the priest, Father Marshall, had a duty of care to MacLeod, that Marshall breached that duty, and that MacLeod suffered injury as a result of the abuse, for which the Basilians are vicariously liable. 

The Basilians were aware that Father Marshall was abusing boys before they ordained him as a priest. Marshall taught for approximately thirty-six years, the Basilians moving him to different schools when complaints of sexual abuse arose. 

The jury awarded MacLeod $350,000 in general damages, $75,000 in aggravated damages, $56,400 in future treatment costs, $1,588,781 lump sum for income loss (to include both past and future), and $500,000 in punitive damages. The award exceeded all offers to settle. The trial judge awarded MacLeod prejudgment interest on general and aggravated damages at the annual rate of 5%. 

The Basilians submitted on appeal that the trial judge erred by failing to properly instruct the jury on the burden of proof for claims for past loss of income for sexual abuse.

Justice Thorburn rejected this argument, holding that while the charge might have been put more clearly in respect of the fact that damages for income loss must be commensurate with the percentage chance that the opportunity would have materialized, the trial judge made no reversible error in articulating the legal principles. She noted that the Basilians’ counsel did not object to the charge and made no submissions to the trial judge or in his closing to the jury on this issue. 
 
Thorburn J.A. also rejected the Basilians’ claim that the award of punitive damages award was excessive. 

As she explained, the question on an appeal of punitive damages is whether the quantum of damages is so plainly unreasonable and unjust as to satisfy the court that no jury reviewing the evidence as a whole and acting judicially could have arrived at it. While the award was high, the jury took into account the general objective of punitive damages as punishment, deterrence, and denunciation. 

Justice Thorburn did agree with the Basilians, however, that the trial judge erred in setting the rate of prejudgment interest at 5% for non-pecuniary damages. 

The trial judge understood that there is a general right to exercise discretion but he failed to articulate any of the factors listed in section 130 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and, more importantly, he concluded that the prejudgment rate should be five percent because section 258.3(8.1) did not apply. Thorburn J.A. noted that the trial judge was correct that section 258.3(8.1) does not apply, but held that he should have taken into account the factors in section 130(2) of the CJA, including the changes in market interest rates. 

The appeal was allowed on this issue and judgment varied to prejudgment interest at 1.3%.

McKitty v. Hayani, 2019 ONCA 805 (Doherty, Miller and Paciocco JJ.A.), October 9, 2019

This case began when, in September 2017, Taquisha McKitty lay unconscious in an Ontario hospital. A dispute arose between McKitty’s family and her treating physician as to whether she had “died”. Ultimately, this case is about the medical criteria accepted by Ontario’s legislation and the common law to determine when a person has passed from life to death, whether those criteria may be challenged on religious grounds, and whether the medical community has a duty to accommodate a patient’s religious beliefs.
 
Despite the fact that a human body can continue to function with mechanical assistance, the consensus in Canada’s medical community is that if “total brain death” or “neurologically determined death” has occurred, the person inhabiting that body has died. The common law definition of death is consistent with this view: death has occurred where there is either an irreversible loss of cardiorespiratory function or a total loss of neurological function. Although there is no Ontario legislation that prescribes a definition of death, several statutes are clearly premised on this definition.

This was the legal framework surrounding the definition of death when Taquisha McKitty was found unconscious on a Brampton sidewalk.

McKitty was taken to hospital, where she was placed on a ventilator. She had suffered significant brain damage due to a lack of oxygen supply to the brain. Initially, her brain stem was still functioning and she was able to breathe spontaneously. However, a second hypoxic event resulted in the loss of McKitty’s ability to breathe without a ventilator. The respondent, Dr. Omar Hayani, a critical care physician at the hospital, conducted diagnostic tests on McKitty’s brain functioning and determined that she met the neurological criteria for death. He completed a death certificate. 

Taquisha’s parents, as her substitute decision makers, sought and were granted an interlocutory injunction restraining the respondent from withdrawing mechanical ventilation. 

The application sought various remedies, including a declaration that McKitty was not dead, an order rescinding the death certificate, and a declaration that McKitty’s Charter rights had been breached. Neither the hospital nor any government body was a party to the application. A notice of constitutional question challenging the determination and definition of death was served on the Attorney General for Ontario and the Attorney General of Canada, both of whom declined to participate in the litigation. 
 
The notice of constitutional question challenged the constitutionality of the statutory and common law approaches to defining death. The claim was that the adoption of neurological criteria to establish the death of those persons who hold a religious belief that life does not end until the heart stops beating --with or without mechanical assistance-- violates such persons’ religious freedom. The McKittys argued that by accepting neurological criteria to determine death, the law fails to accommodate Taquisha’s religious obligations and violates her Charter rights. 

The application was dismissed, the judge concluding that McKitty was not a bearer of Charter rights and that Dr. Hayani, as a private party, was not acting as an agent of government and that the Charter therefore did not apply.

Shortly after the appeal was argued, Taquisha’s heart ceased beating, satisfying the condition for death according to cardiovascular criteria. Although this rendered the appeal moot, the parties requested that the court decide the appeal.

In an expansive decision penned by Justice Miller, the court dismissed the appeal, upholding the application judge’s ultimate conclusion that McKitty’s claim, as brought on her behalf by her parents, could not succeed. 

Citing medical practice, applicable legislation and the common law, Miller J.A. confirmed the current law on the definition of death: a person has died where there is either the irreversible cessation of cardiorespiratory function or the irreversible cessation of all brain function. The application judge appropriately found that the common law recognizes this definition of death. 

Miller J.A. rejected the appellant’s submission that this rule amounts to an abdication of the law’s responsibility to protect society’s most vulnerable by failing to set out a definitive declaration of what constitutes death. He explained that the common law definition of death is not necessarily contingent on the medical definition, but rather is “inescapably a question of justice, informed but not ultimately determined by current medical practice, bioethics, moral philosophy, and other disciplines.” 

The court ultimately declined to rule on the key issue of whether the criteria of cessation of either cardiorespiratory or brain function constitute a violation of the right to freedom of religion, holding that there was insufficient information to settle this dispute. 

Miller J.A. was not satisfied that the court had a sufficient record about Taquisha’s own religious beliefs to make a determination as to whether her freedom of religion was infringed. In order to rule on the Charter issues raised, the court would need more evidence on a number of issues, including Taquisha’s personal religious beliefs and those of her community, and the duties and legal obligations of doctors. He also observed that the Charter challenge was brought against a private party, holding that it would have been preferable for the Attorney General of Ontario to respond to the application. 

The question of whether the common law should be crafted to provide accommodation for persons whose religious convictions cannot accept neurological criteria for death was therefore left for a future case. The court’s analysis of the application judge’s reasons does, however, provide some direction as to how this issue should be addressed when that case comes to bar. 

Miller J.A. identified a number of errors made by the application judge with respect to standing and application of the Charter. 

On the issue of standing, the application judge held that the appellant could not be the subject of a Charter rights violation because she was physically incapable of exercising rights, and because the framers of the Charter did not intend to extend Charter rights to brain dead patients. Justice Miller rejected this reasoning, observing that where the question of a party’s standing is dependent on the outcome of their substantive claim, the court must assume that the claimant has standing and proceed to address the substantive question. “Denying the opportunity to make the argument, on the basis of a criterion whose constitutionality is the subject of the litigation, begs the question that is in dispute.” On the facts of this case, Miller J.A. found it appropriate to assume that the appellant had standing to assert a Charter rights violation claim. 

Miller J.A. also found that the application judge made errors of law with respect to her section 2(a) Charter rights analysis and Charter values methodology, as well as palpable and overriding errors of fact with respect to the appellant’s religious beliefs. Despite the thinness of the record, he concluded that it was sufficient to establish that the appellant held the beliefs attributed to her by her father, that those beliefs were sincerely held, and that they had the requisite nexus with religion to come within the protection of section 2(a) of the Charter. Justice Miller found, however, that the question of whether these beliefs, and the practices associated with them, had been limited by legislation or the common law, was best left to a case in which the record related to the beliefs of the claimant was more fully developed.

Barring a successful application for leave to appeal to the Supreme Court, Taquisha McKitty’s story is now over. However, the question raised by her parents --whether the absence of accommodation for persons who object to the concept of brain death on religious grounds is unconstitutional-- remains unanswered, awaiting a new challenge. 


Clublink Corporation ULC v. Oakville (Town), 2019 ONCA 827 (Doherty, Nordheimer and Harvison Young JJ.A.), October 23, 2019; Oakville (Town) v. Clublink Corporation ULC, 2019 ONCA 826 (Doherty, Nordheimer and Harvison Young JJ.A.), October 23, 2019

Last month, the Court of Appeal released two decisions concerning the fight over Clublink’s proposed destruction and redevelopment of the Glen Abbey golf course. 

Clublink Corporation ULC and Clublink Holdings Limited, the respondents in both appeals, are the owners of Oakville’s Glen Abbey, one of Canada’s most famous golf courses. In October 2015, Clublink advised the Corporation of the Town of Oakville of its intention to redevelop Glen Abbey into a residential and mixed use community. This plan has been met with resistance from the Town, which sees Glen Abbey as an important feature of its community and wishes the property to permanently remain a golf course. 

The Town responded to Clublink’s redevelopment plan on February 1, 2016 by passing an interim control by-law under the Planning Act, R.S.O. 1990, c. P.13, to temporarily restrict redevelopment of Glen Abbey, pending the completion of relevant studies, including a cultural heritage landscape evaluation. 

On December 20, 2017, the Town passed by-law 2017-138, designating Glen Abbey as being “of cultural heritage value or interest” under section 29 of the Ontario Heritage Act, R.S.O. 1990, c. O.18. Subsequent to the passing of the Designation By-law, the town passed five further by-laws, stated to be of general application. The Town also passed a resolution approving a conservation plan, under which Clublink is required to seek the Town’s permission before making certain alterations to Glen Abbey.

On February 6, 2018, Clublink commenced an application to quash the by-laws and the conservation plan, on the basis that they are ultra vires the Town’s jurisdiction under the Municipal Act, 2001, S.O. 2001, c. 25 and the OHA, were passed in bad faith and are void for vagueness.

The application judge held that the Town lacked the jurisdiction to make all the impugned by-laws and the conservation plan because they constituted by-laws “respecting services or things” in relation to “[c]ulture, parks, recreation and heritage”, contrary to section 11(8)5 of the Municipal Act. He held that the by-laws and the conservation plan would effectively require Clublink to continue to operate a championship-calibre golf course. The application judge also found that the by-laws and the conservation plan were passed in bad faith, as they appeared to be directed at and enforced against Clublink alone, with no consideration of Clublink’s economic interests. The Town essentially expropriated Glen Abbey to a public use in a manner that amounted to bad faith. Finally, the application judge found that the by-laws were void for vagueness, and risked transforming the applicable standards into subjective value judgments. He accordingly quashed the impugned by-laws. 

In Clublink Corporation ULC v. Oakville (Town), the Court of Appeal heard the Town of Oakville’s appeal from that decision. 
Writing for the majority of the three-judge panel, Justice Harvison Young held that the Town had statutory authority to pass all the impugned by-laws, that they were not passed in bad faith and that they are not void for vagueness. She held that the Town did not have the authority, however, to approve the conservation plan because its purpose and effect are to compel Clublink to provide a service by continuing to operate the property as a golf course, contrary to section 11(8)5 of the Municipal Act. It is therefore ultra vires the Town’s jurisdiction. 

The appeal was accordingly allowed in part. 

Justice Nordheimer dissented in part, holding that the application judge erred in quashing the conservation plan on the basis that it was ultra vires.

Meanwhile, Clublink had the right, under section 29(5) of the Ontario Heritage Act, to formally object to the designation of Glen Abbey as a property of cultural heritage value or interest. It did not do so, however, instead advising the Town that it intended to submit an application under section 34 of the OHA to “demolish” and/or “remove” Glen Abbey. 

The Town notified Clublink that its application was legally beyond the scope of a section 34 OHA application but was properly within the scope of section 33, which permits an owner to “alter” a designated property. This distinction is significant because if section 33 of the OHA applies, the municipal council is afforded the final word with respect to the application, but if section 34 applies, the Local Planning Appeal Tribunal gets the final word instead. 

The Town then commenced an application for a determination of its rights under the OHA and for a declaration that section 34 did not apply, while Clublink formally submitted its section 34 application to the Town and commenced its own application for a declaration that they could make an application under section 34. 

At issue before the application judge was whether Glen Abbey could be considered a “structure” so as to bring it within section 34 of the OHA. The application judge determined that the entirety of Glen Abbey constituted a “structure” for the purposes of that provision, such that Clublink had properly framed its application. 

In Oakville (Town) v. Clublink Corporation ULC, the Court of Appeal heard the Town’s appeal from that decision. 

The court dismissed the Town’s appeal, rejecting its submission that the application judge failed to properly apply the principles of statutory interpretation when concluding that Glen Abbey was a “structure” within the meaning of section 34 of the OHA and therefore the application to demolish Glen Abbey is properly governed by that provision. Again writing for the majority, Justice Harvison Young held that this issue cannot be resolved by an interpretative approach focusing solely on the word “structure” and sections 33 and 34, without a consideration of the entire context and object of the statute, and the intention of the Legislature. Harvison Young J.A. held that a purposive and contextual approach to the relevant provisions --and, in particular, an approach that takes into account their legislative history-- indicates that Glen Abbey is properly construed as a “structure” for the purpose of section 34 of the OHA

Justice Nordheimer again dissented, holding that a golf course cannot be a “structure” within the meaning of section 34 of the OHA, due primarily to the “ordinary meaning” of that term. 
 



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