1. Da Silva v. Gomes, 2018 ONCA 610 (Epstein, Lauwers and van Rensburg JJ.A.), July 4, 2018 4. Lemon v. Lemon, 2018 ONCA 684 (Feldman, Hourigan and Brown JJ.A.), August 21, 2018 1. Da Silva v. Gomes, 2018 ONCA 610 (Epstein, Lauwers and van Rensburg JJ.A.), July 4, 2018
Brandon Gomes punched Michael Da Silva during a soccer game, injuring him. Gomes was criminally convicted for the assault. Da Silva and his family sued Gomes, the Hamilton Sparta Sports Club, the Ontario Soccer Association Incorporated, and other individuals.
The motion judge granted summary judgment, dismissing the action against all of the defendants other than Gomes.
In a succinct decision, the Court of Appeal dismissed the Da Silva family’s appeal from that judgment.
The court rejected the appellants’ submission that the respondents were negligent in their supervision of the game and that they breached several standards of care, including for coaches, on-field supervision, and player conduct. As the court observed, the appellants’ case rested on proving that Gomes’ previous conduct presented a risk that he would commit violence against an opposing player and that his coach, his team, and the Association, were negligent in permitting him to play. The court noted that the motion judge had found the assault to be an impulsive act. As the motion judge explained:
Gomes' evidence was that he knew he was not to punch other players. His evidence was that he assaulted Da Silva impulsively. Based on Gomes' evidence, even if there was a code of conduct and even if he was made aware of it, it would not have prevented him from engaging in behaviour that was so beyond the realm of what is reasonable. … Based on the evidence, I am unable to conclude that the lack of or improper discipline would have deterred Gomes such that the assault upon Da Silva would not have occurred.
The motion judge relied on school board cases which hold that supervising authorities are not legally responsible for “a sudden unexpected event in the midst of an acceptable, safe activity”. In the Court of Appeal’s view, she did not err in accepting and applying this law.
The court also rejected the appellants’ claim that the respondents were liable under the Occupiers Liability Act, R.S.O. 1990, c. 0.2., for failing to ensure that the playing field was safe. The motion judge made no palpable or overriding error in her finding that there was no evidence of “any site safety issues or that the playing field was not safe”.
Finally, the court held that the motion judge made no error in finding that the appellants’ arguments did not raise genuine issues requiring a trial. The case was not complex, the key facts were not in dispute, and there were no credibility issues to resolve.
2. Filice v. Complex Services Inc., 2018 ONCA 625 (Simmons, Roberts and Nordheimer JJ.A.), July 10, 2018
This was an appeal from a judgment that awarded the respondent, Antonio Filice, damages for constructive dismissal.
The appellant, Complex Services Inc., operates Casino Niagara and Fallsview Casino, where the respondent was employed as a Security Shift Supervisor since 1999. As a condition of employment, Security Shift Supervisors are required under the Gaming Control Act, 1992, S.O. 1992, c. 24, to maintain a valid gaming registration issued by the Alcohol and Gaming Commission of Ontario (AGCO).
Following an audit of the Casino by the ACGO Compliance Unit, the respondent was placed on an investigative suspension for suspected theft. He was charged with four counts of theft under $5,000 and one count of breach of trust, and the AGCO suspended his gaming registration. While the respondent’s criminal charges were withdrawn and/or dismissed shortly thereafter, his gaming registration remained suspended. As a result, he was advised that his employment was terminated.
The respondent commenced the underlying action against the appellant for wrongful dismissal, false arrest, malicious prosecution, breach of his Charter rights, negligence, and intentional infliction of mental suffering.
On the appellant’s motion for summary judgment, the motion judge dismissed all of the respondent’s claims except for the constructive dismissal claim. That claim proceeded to trial and the respondent was awarded damages for constructive dismissal in the amount of $75,723, punitive damages of $100,000, and costs of $82,600.
The court allowed the appeal, holding that the trial judge erred in setting the notice period at 17 months, and by concluding that punitive damages were appropriate.
Applying the test for constructive dismissal as set out in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, Nordheimer J.A. agreed that the respondent was constructively dismissed. When the appellant suspended the respondent without pay – a decision which, in Nordheimer J.A.’s view, was unwarranted at that stage of the investigation – it made a unilateral change to the employment relationship and breached the implied term of the employment contract that the power to suspend without pay would not be exercised unreasonably. He went on to hold that “it would be beyond reasonable debate, whether from the viewpoint of a reasonable employee or otherwise, that suspending an employee without pay would have an impact on the employee that would be more than minimal”. The significant impact of suspending the respondent without pay rendered the suspension a breach of the contract of employment that amounted to constructive dismissal under the Potter test.
Nordheimer J.A. held, however, that the trial judge failed to undertake a proper damages assessment, and that 17 months was an inordinately lengthy notice period for someone in the respondent’s position. While the trial judge treated the entire period of the respondent’s suspension as being the appropriate notice period for which he was to be compensated, Potter makes clear that in assessing damages for constructive dismissal – just as in assessing damages for wrongful dismissal – the appropriate notice period must be determined and damages awarded in lieu of that period. Applying the factors set out in Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), Nordheimer J.A. found that reasonable notice in this case was seven months.
Turning to the matter of the trial judge’s award of punitive damages, Nordheimer J.A. observed that while the trial judge noted the principle that punitive damages are only to be awarded “where compensatory damages are inadequate to accomplish the objectives of retribution, deterrence, and condemnation”, he failed to engage in any analysis of why the compensatory award was inadequate to achieve those objectives. In failing to do so, he committed an error in principle. Nordheimer J.A. noted that, insofar as the appellant was not justified in suspending the respondent without pay, it will pay for that error through the award of compensatory damages. As the Supreme Court explained in Whiten v. Pilot Insurance Co., 2002 SCC 18, compensatory damages include a punitive element and, in many cases, will be all the “punishment” required.
The court set aside the trial judgment, granting judgment to the respondent solely for compensatory damages for seven months’ lost wages.
3. Gore Mutual Insurance Company v. Carlin, 2018 ONCA 628 (Feldman, Hourigan and Brown JJ.A.), July 11, 2018
In this decision, the Court of Appeal considered the question of whether an insured is permitted to retain the total amount paid by its insurer when it is subsequently determined that the amount paid was in excess of the loss suffered.
The dispute arose from a September 2012 fire which destroyed a building in Winchester Ontario, where the respondent had carried on a dentistry practice. The building and its contents were insured by the appellant insurance company. A May 2014 appraisal under s. 128 of the Insurance Act, R.S.O. 1990, c. I. 8, found that the total amount payable by the appellant was $926,677.03. By this time, however, the appellant had already paid out $1,030,187.04, including an advance of $750,000.
The appellant sued to recover the overpayment.
The motion judge granted summary judgment to the insureds, holding that they were free to keep the total amount paid by the insurer, even though it exceeded their loss by over $100,000.
Noting that the appellant is a sophisticated insurance company, the motion judge found that even though the $750,000 payment was referred to as an “advance”, it was not in fact an advance because it was paid on the basis that it could be used as the respondents saw fit. The motion judge further found that the payment was deliberate and not the product of mistake, and observed that both the policy and the Insurance Act were silent on the issue of what happens when an overpayment is made. He rejected the appellant’s claim of unjust enrichment on the grounds that the respondents obtained no benefit when they received the $750,000 payment, and that there was a juristic reason for sending the money (which, according to the motion judge, indicated that the respondents could use the money as they wished).
The Court of Appeal held that the motion judge erred both in concluding that the insurer was not entitled to recover the overpayment, and in finding that unjust enrichment was not available as a remedy.
Writing for the court, Hourigan J.A. explained that a contract of insurance is a contract of indemnity, not “a vehicle for turning misadventure into profit”. The motion judge’s analysis ignored that fundamental principle.
The motion judge erroneously concluded that the appellant communicated to the insureds that they could keep the $750,000 advance regardless of the quantification of the actual cash value that was to be determined as part of the appraisal process. In Hourigan J.A.’s view, this was a palpable and overriding error.
Hourigan J.A. held that the motion judge also erred in law in his interpretation of the insurance policy, when he concluded that it did not obligate the respondents to return the overpayment because it was silent on that issue. As the Supreme Court explained in Brisette Estate v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87, contracts of insurance are to be interpreted in a manner that results in neither a windfall to the insurer nor an unanticipated recovery to the insured. In Hourigan J.A.’s view, the motion judge’s decision went beyond an unanticipated recovery to grant a windfall that was wholly unconnected to the recovery of any loss.
Hourigan J.A. held that the motion judge further erred in his analysis of the Insurance Act, when he limited his inquiry to a search for a specific provision in the statute addressing a situation where an overpayment is made, and neglecting to consider the purpose and scheme of the legislation. In permitting recovery for amounts beyond the loss suffered by the insured, the motion judge’s ruling conflicted with the most basic elements of the Insurance Act. In particular, his decision was inconsistent with the definition of insurance as provided for in the statute – “the undertaking by one person to indemnify another person against loss or liability for loss” – and contrary to the purpose of conducting an appraisal.
Hourigan J.A. went on to hold that the motion judge erred in law in his unjust enrichment analysis. The test for unjust enrichment was set out by the Supreme Court in Kerr v. Baranow, 2011 SCC 10: the plaintiff must demonstrate that the defendant received an enrichment, that the plaintiff suffered a corresponding deprivation, and that there was no juristic reason for the benefit and loss. In Hourigan J.A.’s view, there could be no issue in this case that the insured received a benefit and that the appellant suffered a corresponding deprivation. Moreover, the appellant did not communicate to the respondents that they could do whatever they liked with the $750,000 advance regardless of the quantification of the actual cash value, which was an issue to be determined as part of the appraisal process. Therefore, there was no juristic reason for the benefit and corresponding deprivation.
4. Lemon v. Lemon, 2018 ONCA 684 (Feldman, Hourigan and Brown JJ.A.), August 21, 2018
The appellant was the biological mother of two children who, early in their lives, were voluntarily transferred by the appellant to the care of the respondents, the appellant’s brother and sister-in-law. Three years after the children moved in with their aunt and uncle, a custody dispute arose when the respondents consulted a lawyer regarding the possibility of obtaining custody of the children.
When the appellant learned of this development, she took the children to live with her. The respondents subsequently brought an application for custody of the children.
Underlying the custody dispute was the “stark religious differences” between the parties. While the appellant was raised as a Jehovah’s Witness, she left – and became quite critical of – that faith. The respondents were Jehovah’s Witnesses who disapproved of the appellant’s same-sex relationship and secular lifestyle.
A judge of the Superior Court ordered interim custody to the respondents, with access in favour of the appellant. Pursuant to court requests, the Ontario Children’s Lawyer became involved. An initial report and an update were prepared by the same clinician. The first report recommended granting custody to the respondents with access in favour of the appellant, and the update recommended that the appellant be granted custody of the children with access to the respondents.
After an eight-day trial, the trial judge found that it was in the children’s best interests to remain in the sole custody of the respondents, with access in favour of the appellant. In ruling in favour of the respondents, the trial judge found that the appellant’s romantic relationship was not a stable one, and that by extension her own life was unstable. He also found that it was the children’s preference to live with the respondents. The trial judge’s custody order prohibited the appellant from including the children in any activity or festivity contrary to the respondents’ religious beliefs.
The appellant appealed.
While the Court of Appeal disagreed with the finding that the appellant’s romantic relationship was unstable, it held that the trial judge’s conclusion that her life was unstable was supported by reference to her employment and finances, especially in comparison to the respondents’ demonstrated ability to provide for the children.
The court rejected the appellant’s claim that the trial judge erred by failing to consider the maximum contact principle and by failing to appreciate that parents have a favoured status when competing with non-parents for custody of their child. The court noted that the Children’s Law Reform Act, R.S.O. 1990, c. C. 12, already contemplates the maximum contact principle, so the trial judge was correct to rely on the “best interests” framework set out in s. 24(2) of that statute. Similarly, the CLRA already contemplates the importance of the parental bond.
The court did note that the trial judge failed to give proper weight to the children’s clear evidence that they wished to spend more time with their mother, but held that this error was not sufficient to warrant overturning the trial judge’s decision to award sole custody to the respondents.
The court agreed with the appellant, however, that the portion of the order prohibiting her from including her children in any activity or festivity contrary to the respondents’ religious beliefs was “both unfeasible and contrary to Charter values”. The court pointed out that the appellant’s same-sex relationship was itself “an activity contrary to the religious beliefs” of her brother and sister-in-law. The court emphasized that both the appellant’s sexual orientation and her secular beliefs were entitled to the same respect as the respondents’ beliefs.
The court therefore allowed the appeal in part, revising the access order to grant the appellant greater access to her children and to eliminate the restriction on access with respect to religious beliefs.
5. Jeffery v. London Life Insurance Company, 2018 ONCA 716 (Doherty, Benotto and Huscroft JJ.A.), August 31, 2018
This appeal concerned the class counsel fee and costs relating to a class action arising from the Great-West Life Assurance Company’s acquisition of London Life Insurance Company. As part of the acquisition, the companies used funds from their respective participating policy accounts through a series of PAR account transactions.
The plaintiff class – holders of Great-West Life and London Life participating policies – alleged that these transactions were not in compliance with the Insurance Companies Act, S.C. 1991, c. 47 (ICA).
After a lengthy trial, in which the trial judge found several breaches of the ICA, the Court of Appeal previously upheld the trial judge’s findings except in one limited respect, but ordered a rehearing of the remedy portion of the judgment. On appeal from that re-hearing, the court previously ordered that $56.43 million be paid back into the PAR accounts.
The parties then returned to the trial judge on the issue of class counsel fees. The trial judge approved class counsel fees of $16.4 million, placed a first charge for the fees over the $56.43 million to be returned to the PAR accounts, found that the class plaintiffs were entitled to partial indemnity costs of $4 million, and imposed a levy in favour of the Law Foundation of Ontario on the $56.43 million to be returned to the PAR accounts. On a subsequent motion, the trial judge clarified a portion of an earlier judgment, holding that it meant that the companies could not charge or allocate any legal costs or expenses, whenever incurred, to the PAR accounts at any time without leave of the court and on notice.
The companies appealed from this decision as well as the trial judge’s order clarifying her previous judgment, while the Foundation cross-appealed on the basis that additional disbursements should have been awarded to the respondents and subject to the levy.
Writing for the Court of Appeal, Benotto J.A. rejected the appellants’ submission that the trial judge erred in ordering payment of the class counsel fee from, and a charge over, the PAR accounts. Nor did she err in ordering the levy in favour of the Foundation or by refusing to award the respondents the additional disbursements.
The class counsel fees were payable from the PAR accounts by virtue of s. 32(3) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (CPA), as opposed to the retainer agreement itself. Benotto J.A. also held that the award made in the action – the return of the $56.43 million to the PAR accounts – was a “monetary award” under s. 32(3) of the CPA. Although the award was not payable directly to the class plaintiffs, s. 32(3) refers to “any … monetary award”, and the words “payable to” are absent from the provision. Moreover, the provision should be interpreted generously with a view to the overarching purposes of the CPA, such as encouraging access to justice. Further, as the court explained in Hislop v. Canada, 2009 ONCA 354, “monetary award” should be taken to mean a payment of money imposed by judicial authority. Benotto J.A. also found that the charge could be properly attached to the award. She pointed out that the language of s. 32(3) of the CPA does not require that the class have an ownership interest in property before the first charge is placed against it. The class plaintiffs had a sufficient right to the funds to ground a first charge because they were awarded the right to have the $56.43 million repaid to the PAR accounts.
Benotto J.A. also rejected the appellants’ assertion that the trial judge erred in ordering a levy in favour of the Foundation and by declining to award the respondents additional disbursements. The conclusion that the $56.43 million was a “monetary award” made in favour of the plaintiff class should also be used to interpret s. 10(2) of Ontario Regulation 771/92 – Class Proceedings under the Law Society Act, R.S.O. 1990, c. L.8, requiring a levy payable in favour of the Fund. The trial judge’s determination that a levy was chargeable in favour of the Fund was supported by the text of the Regulation, the legislative context, and the purposes of the Regulation and the Fund.
Huscroft J.A. dissented on these issues, disagreeing with the majority that the orders were “monetary awards”.
Benotto J.A. upheld the trial judge’s award of costs to the respondents, noting that she was involved in the matter for many years, was in the best position to make a determination as to success in the action, and was principled in the exercise of her discretion. She found no basis to interfere with the trial judge’s conclusion that the litigation was a success because the respondent class gained much from the judgment.
Benotto J.A. also held that the trial judge did not err in interpreting her earlier order to have retroactive effect. Rule 59.06 of the Rules of Civil Procedure clearly states that a judge can give directions or make an order to carry an order into operation, and this is what the trial judge did in clarifying the earlier order. She confirmed that the order was meant to capture any costs or expenses relating to the legal proceedings, not only to those costs incurred after her judgment in 2010, and this accordingly fell within the jurisdiction provided under r. 59.06(2)(c). Benotto J.A. noted that the retroactive interpretation accorded with the intention of the order, which was to prevent the appellants from allocating legal costs and expenses to the very accounts they were accused of mismanaging. This interpretation was also consistent with the trial order, the impetus of which was to restore the PAR accounts to the position they would have been in had the PAR account transactions never occurred.
Turning to the cross-appeal, Benotto J.A. held that the trial judge did not err in not ordering the appellants to pay additional disbursements incurred by the plaintiffs. As well, the Foundation did not have standing to argue this issue.
The appeal and cross-appeal were dismissed.
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