Nemchin v. Green, 2019 ONCA 634 (Rouleau, Lauwers and van Rensburg JJ.A.), July 31, 2019
Nemchin v. Green, 2019 ONCA 634 (Rouleau, Lauwers and van Rensburg JJ.A.), July 31, 2019
This appeal, which arose from a motor vehicle accident, gave the Court of Appeal an opportunity to clarify the law on the admissibility of video surveillance and Facebook evidence at trial.
The appellant, Yvonne Green, collided with the respondent, Tanya Nemchin, when she made a left turn into oncoming traffic.
The jury trial turned on the significance of Nemchin’s post-traumatic stress disorder, and whether it was caused by the collision or was the result of an earlier trauma. Green sought to produce video surveillance evidence and copies of some of the respondent’s Facebook posts, which she alleged showed the respondent taking part in normal life activities, intending to demonstrate the limited impact PTSD actually had on Nemchin’s life.
The trial judge found both sets of evidence inadmissible. Nemchin was ultimately awarded damages of approximately $700,000.
The appellant submitted that the trial judge erred in not admitting the evidence she sought to produce, and argued that the exclusion of this evidence, which she claimed would have presented a more accurate picture of the respondent’s health, was an error in law and led to a miscarriage of justice requiring a new trial.
The Court of Appeal disagreed.
Justice Lauwers found no error in the trial judge’s refusal to admit the Facebook evidence. The respondent had deleted her Facebook account, so the parties had entered into an agreement whereby the appellant would have access to the account as long as the respondent was provided with copies of the material that the appellant planned to use on cross-examination. The appellant failed to do so in a timely manner and, when she did seek to adduce six volumes of Facebook evidence, the trial judge held that the work and time required to allow the respondent to review the evidence and prepare a response in the middle of sitting for cross-examination would be substantial and would amount to prejudice. In Lauwers J.A.’s view, the trial judge had discretion to decline to admit the evidence.
However, he did agree with the appellant that the trial judge erred in not admitting the video surveillance evidence.
As Lauwers J.A. explained, video evidence is submitted at trial for two possible purposes: to impeach witness credibility on cross-examination or to be used as substantive evidence in the party’s case. Where the evidence is only to be used for impeachment purposes, it need not be disclosed before trial; if it is to be relied upon to prove a fact at trial, however, it must be disclosed in a timely manner, in accordance with the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
The test for the admissibility of surveillance evidence is the same whether it is to be used for impeachment purposes or for substantive purposes, and the approach to the assessment of the evidence must be the same. As the Court of Appeal explained in Iannarella v. Corbett, 2015 ONCA 110, the impugned evidence must be assessed by the trial judge in a voir dire for two purposes: (i) to permit the videographer to be examined in order to ensure that the video presents a fair and accurate depiction for the surveillance to be admitted in evidence, and (ii) for the trial judge to ensure that the use of surveillance video will not impair trial fairness. During the voir dire, the trial judge must examine each piece of video evidence that the defence wants to put to the jury, and determine whether it is, in and of itself, admissible.
Justice Lauwers noted that the trial judge dismissed the video evidence as a whole, when she ought to have considered each piece individually. She further erred in holding that the evidence did not contradict the witness’ testimony, and so could not be admitted. While the contradiction may have been minor, that was irrelevant; the video evidence still could have been led as substantive evidence. The trial judge also held that because the video evidence had not been shown to expert witnesses, it could not be properly contextualized, and its significance not properly understood by the jury. Lauwers J.A. noted, however, that the respondent led similar evidence at trial without expert testimony.
Nonetheless, Lauwers concluded that the trial judge’s error in excluding the video surveillance evidence was not so sufficiently grave as to warrant a new trial. He noted that the jury’s award was based largely on the respondent’s inability to work to her full capacity, and the reduction in her potential income. While the jury considered the impact of the respondent’s PTSD on her enjoyment of everyday life, this was not the main basis of their award. The key issue at trial was whether the accident caused the respondent’s PTSD or whether it was an existing condition. The impugned evidence was not relevant to this question, neither contradicting nor adding to evidence already admitted. In Justice Lauwers’ view, the damages award would therefore not have been much different, if at all different, had the jury seen the video evidence at issue on appeal. Accordingly, there was no major wrong or miscarriage of justice, and no new trial was necessary.
The Statutory Accident Benefits dispute resolution provisions of the Insurance Act give the Licence Appeal Tribunal (“LAT”) authority to resolve certain disputes. In this decision, the Court of Appeal considered whether claims for an insurer’s bad faith conduct fall within that jurisdiction. There had been much speculation by many commentators that claims based on bad faith, seeking punitive damages, could still be litigated, rather than adjudicated by the LAT. The Court of Appeal has ended that speculation by holding that there was no ability to sue.
The appellant Morgan Stegenga was involved in a motor vehicle accident resulting in significant injuries. She claimed Statutory Accident Benefits from her insurer, the respondent Economical Mutual Insurance Company. In light of the way that the respondent handled her claim, Stegenga brought an action against the insurance company alleging bad faith, and claiming punitive and exemplary damages.
The respondent successfully moved under Rule 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to strike out Stegenga’s statement of claim and obtained a determination, as a matter of law, that the LAT has exclusive jurisdiction to decide the claim at first instance.
Section 280 of the Insurance Act, R.S.O. 1990, c. I. 8, which came into force on April 1, 2016, gives the LAT jurisdiction to resolve certain disputes and prohibits bringing proceedings in respect of those disputes in court. The motion judge held that the claim fell within the SABs dispute resolution provisions because it was “in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled”. It was therefore a claim over which the LAT has exclusive jurisdiction and one which may not be brought in court. In the motion judge’s view, both section 280 of the Insurance Act and the Court of Appeal’s decisions under the prior versions of the statute’s dispute resolution provisions required this conclusion, even though the appellant claimed damages for bad faith arising from the respondent’s administration of her SABs claim.
The Court of Appeal dismissed Stegenga’s appeal from that decision, rejecting her submission that the motion judge erred in concluding that her claim was barred by section 280 of the Insurance Act.
Justice Zarnett characterized the appeal as a question of statutory interpretation, its disposition turning on the breadth of section 280 of the Insurance Act.
Subsection 280(1) of the Insurance Act describes the disputes to which the dispute resolution process it mandates applies, providing:
This section applies with respect to the resolution of disputes in respect of an insured person’s entitlement to statutory accident benefits or in respect of the amount of statutory accident benefits to which an insured person is entitled.
Subsection 280(2) goes on to confer jurisdiction on the LAT to resolve the disputes described in subsection 280(1), while subsection 280(3) then places a limit on what proceedings may be brought in court, prohibiting proceedings at first instance if they are with respect to a dispute described in subsection 280(1), that is, a dispute that falls within the jurisdiction of the LAT.
As the court explained in Belwood Lake Cottagers Association Inc. v. Ontario (Environment and Climate Change), 2019 ONCA 70, the modern approach to statutory interpretation requires the court to consider the words of a statute “in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”.
Zarnett J.A. explained that the amendments to the Insurance Act that created section 280 were enacted to reduce insurance rates and insurance fraud and to speed up dispute resolution. In effecting this purpose, the legislature must not have intended to give overlapping jurisdiction to both the LAT and the courts as this would be inefficient and would defeat the purposes of the amendment.
Moreover, section 280 uses expansive language, namely, “in respect of”, which connotes the broadest possible connection between two subject matters. The words “in respect of” are used in subsection 280(1) to connect “dispute” and “entitlement”, both of which are very broad terms on their own. Combining these considerations leads to a very broad jurisdiction for the LAT to exclusively hear such disputes.
The appellant submitted that since the LAT doesn’t have the ability to award punitive damages, it cannot hear claims for bad faith since Whiten v. Pilot Insurance Co., 2002 SCC 18, makes actions for breach of a duty of good faith subject to punitive damages. Zarnett J.A. rejected this argument, however, noting that the Insurance Act gives the LAT power to confer special awards when benefits were unreasonably withheld or delayed. He emphasized that differences in remedial powers do not impact determinations of jurisdiction. The legislature made a decision which matters would fall to the LAT, and in turn, what remedies would be available, and that is a determination it was entitled to make.
The appellant further submitted that the claim was for bad faith, not one relating to the benefits themselves, and therefore should not be subject to the jurisdiction of the LAT. Justice Zarnett also rejected this claim. While the appellant classified the action as one for bad faith, the facts clearly show that it was a dispute over how the policy was administered. Section 280 of the Insurance Act specifically confers powers for disputes relating to the administration of the claim.
Thurston v. Ontario (Children’s Lawyer), 2019 ONCA 640 (Huscroft, Trotter and Zarnett JJ.A.), July 1, 2019
In this decision, the Court of Appeal considered whether a lawyer in private practice who received work from the Office of the Children’s Lawyer was a dependent contractor for the purpose of notice of termination of the relationship by her client.
The respondent Barbara Thurston is a lawyer in sole practice who provided legal services to the Office of the Children’s Lawyer (“OCL”) for thirteen years, pursuant to a series of agreements. During this period, the respondent maintained an independent legal practice, which accounted for the majority of her billings. When the OCL declined to renew her retainer following the expiry of the last agreement on March 1, 2015, Thurston brought a claim alleging that she was a dependent contractor and was therefore entitled to twenty months’ notice of termination.
The OCL brought a motion for summary judgment dismissing her claim. That motion was dismissed.
The Court of Appeal allowed the OCL’s appeal from the dismissal of its motion, holding that the motion judge erred in concluding that the respondent was a dependant contractor.
As the court explained in McKee v. Reid’s Heritage Home Ltd., 2009 ONCA 916, dependent contractor status is a non-employment relationship in which there is “a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity”. In distinguishing dependent from independent contractors, McKee emphasized that exclusivity of service provision, and therefore of income, is key. In Keenan v. Canac Kitchens Ltd., 2016 ONCA 79, the court further clarified that exclusivity is “integrally tied to the question of economic dependency”, and that the determination of exclusivity required consideration of the full history of the relationship in question.
Huscroft J.A. found that in this case, there was no question that the respondent did not work exclusively for the OCL. The retainer agreement expressly contemplated the respondent maintaining a private legal practice throughout the entire time she was retained, and she in fact did so.
During the relevant period, Thurston’s independent legal practice formed a majority of her billings. Her OCL work accounted for anywhere from a low of 14.8% to a high of 62.6% of her annual billings. Over the thirteen-year period, the respondent’s OCL billings accounted for an average of 39.9% of her annual billings.
Although he noted that “near-complete exclusivity” cannot be reduced to a specific number, and that additional factors may be relevant in determining economic dependency, Justice Huscroft explained that it requires substantially more than 50% of billings. He concluded: “On no account can 39.9% of billings be said to constitute exclusivity or ‘near-complete exclusivity’, such that economic dependence on the OCL is established.” While the OCL was a very important client of the respondent, it was still only one client.
Huscroft J.A. rejected the respondent’s submission that the longevity of the relationship transformed it into a relationship of “enduring dependency”. In fact, the terms of her retainer made it clear that the respondent had no entitlement to any minimum level of work.
Huachangda Canada Holdings Inc. v. Solcz Group Inc., 2019 ONCA 649 (Hoy A.C.J.O., Trotter and Jamal JJ.A.), August 8, 2019
In this decision, the Court of Appeal considered whether a defendant may plead in a statement of defence that the plaintiff has an ulterior motive in bringing the action, when the plaintiff’s motive is not otherwise an element of any cause of action or defence.
The respondents asserted claims for alleged breaches of representations and warranties and fraudulent conduct arising out of a share purchase agreement (“SPA”). The appellant, Solcz Group Inc., an auto parts manufacturer, was the vendor, and the respondent, Huachangda Canada Holdings Inc., the purchaser. The respondents’ amended statement of claim pleads that SGI breached numerous representations and warranties in the SPA, causing significant losses. The appellant’s statement of defence denies these allegations and claims that any losses incurred by the respondents were caused by their own financial mismanagement.
Significantly, the statement of defence also pleads that the respondents’ motive in suing the appellant was not to recoup genuine damages for genuine wrongs, but rather to obtain an after-the-fact reduction in the purchase price established under the SPA.
The motion judge struck out, without leave to amend, this portion of the statement of defence. He found that these paragraphs were irrelevant to the causes of action pleaded and therefore frivolous and vexatious under Rule 25.11(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
The Court of Appeal agreed.
The court explained that allegations regarding a plaintiff’s personal reasons or motives in bringing an action, however improper, do not in themselves provide a defence to the action and are therefore irrelevant. A court will not inquire into a litigant’s private motives in bringing an action.
A plea of ulterior motive in bringing an action may be permitted where the plea is an essential part of a cause of action or defence, or where it is otherwise relevant, such as where it bears on a claim of abuse of process. In this case, however, the respondents’ alleged ulterior motive was not an essential part of any cause of action or defence, nor was it otherwise relevant. Therefore, it was properly struck under Rule 25.11(b).
The court also upheld the motion judge’s refusal of leave to amend.
Citing the principle that a motion judge’s decision whether or not to grant leave to amend is discretionary and entitled to deference absent palpable and overriding error of fact or error of law, the court noted that in this case the motion judge refused leave to amend because he concluded that the impugned paragraphs of the appellant’s defence were scandalous, frivolous or vexatious and disclosed no reasonable defence. As the court explained in 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42, in such circumstances, a court is not required to grant leave to amend.
In this decision, which arose from a crossclaim by the police against Crown lawyers for allegedly negligent legal advice during a failed prosecution, the Court of Appeal addressed the issue of prosecutorial immunity.
This appeal arose from a “Mr. Big” operation that led to the plaintiff being charged with first degree murder. Although the plaintiff was acquitted following the exclusion of the alleged confessions during the operation, he was incarcerated for nearly five years following his arrest.
After his acquittal, the plaintiff sued the police and Crown lawyers involved in the investigation for negligent investigation, unlawful arrest and imprisonment, and intentional infliction of mental suffering.
The police crossclaimed against the Crown lawyers for negligent legal advice and breach of retainer.
The motions judge struck the plaintiff’s claim against the Crown lawyers on the basis that it was barred by common law prosecutorial immunity, but allowed most of the crossclaim to proceed. The Divisional Court struck the crossclaim.
The appeal turned on whether it is plain and obvious that the crossclaim cannot succeed.
In an expansive decision penned by Justice Tulloch, the Court of Appeal dismissed the appeal on two independent grounds.
First, Tulloch J.A. held that it is plain and obvious that prosecutorial immunity bars the crossclaim. He cautioned that imposing liability on Crown lawyers for negligent advice provided to police in the course of an investigation and breach of retainer would engage “the twin policy concerns of diversion from public duties and a chilling effect leading to defensive lawyering that give rise to prosecutorial immunity”. Justice Tulloch added that there is no basis upon which to treat claims brought by police differently from those brought by private citizens, nor is there a basis upon which to differentiate between claims arising from the pre-charge stage versus the post-charge stage.
Tulloch J.A. further held that the concern about the chilling effect includes the damage that imposing liability would cause to the relationship between Crown counsel and the police. Specifically, fear of liability for negligent legal advice could make Crown lawyers reluctant to give advice and make them veer into impermissible direction of the policy. This runs completely against the nature of the relationship between the policy and Crown counsel and the principle that Crown lawyers do not exercise supervisory authority over the police.
Second, Justice Tulloch held that it is plain and obvious that the crossclaim does not disclose a reasonable cause of action because Crown lawyers do not owe the police a duty of care in respect of the legal advice they provide to them.
Since the appellants argued for the recognition of a new category of relationship giving rise to liability, Tulloch J.A. conducted a full proximity analysis under stage one of the Anns/Cooper test, examining relevant factors arising from the relationship between the parties such as the parties’ expectations and reliance. The analysis led him to conclude that there is not a sufficiently direct and close relationship to impose a prima facie duty of care on Crown lawyers in providing legal advice to police.
Despite his finding under stage one of the Anns/Cooper test, Tulloch J.A. conducted an analysis of the residual policy considerations that would negate such a duty under stage two of the test. He found that the same two policy concerns that compel the application of prosecutorial immunity to these circumstances also operate to negate any recognition of a prima facie duty of care. Justice Tulloch also noted a third residual policy concern: imposing a duty of care on Crown lawyers would undermine the mutual independence and distinct roles of police and Crown counsel, which in turn could harm the functioning of the criminal justice system.
Accordingly, the appeal was dismissed.
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