BC Chief Justice – Indivisible Injury Assessment Applies for Charter Damages as Well

November 16th, 2016

Chief Justice of the BC Supreme Court published reasons for judgement finding that the ‘indivisible injury’ assessment that developed under tort law is equally applicable when damages are being assessed for a Charter breach.

In today’s case (Henry v. British Columbia) the Court awarded the Plaintiff over $8 million in damages for a wrongful conviction and some 27 years of incarceration.  Prior to trial the Plaintiff settled with other Defendants.  The Province sought to have those settlements deducted from the awarded damages arguing they all covered a single indivisible harm.  Chief Justice Hinkson agreed and in ordering that the principles of ‘indivisible injury’ assessment apply to Charter damages provided the following reasons:

[33]        The plaintiff alleged that but for the separate actions or inactions of the City employees and provincial Crown counsel, he would not have been convicted and incarcerated for almost 27 years, and that but for the action or inaction of Canada he would have been released far sooner than he was.

[34]        In tort law, where there are multiple causes of injuries, the Court must determine whether the injuries are divisible or indivisible when assessing whether double recovery principles will apply: Athey v. Leonati, [1996] 3 S.C.R. 458 and E.D.G. v. Hammer, 2003 SCC 52. I see no reason why such an approach is not equally applicable to an award of Charter damages.

[35]        While the allegations against the Settling Defendants and non-settling defendants were based upon different allegations of fault, the relief sought was essentially the same: compensation for a wrongful conviction and some 27 years of incarceration. I find that the results alleged to have occurred from the causes of action pleaded against the City and the Province were indivisible.

[36]        While the ambit of the compensation sought from the City defendants and the Province was broader than that sought from Canada, the compensation sought from Canada was in large measure subsumed in the award the plaintiff recovered against the Province. Thus, these claims are also indivisible.

[37]        I am mindful of the fact that the plaintiff was obliged to proceed to trial by all of the original defendants and obliged by the Province to proceed to judgment before recovering any damages from it. The Alberta Court of Appeal in Bedard rejected that factor as a basis for not deducting settlement proceeds from damages awarded at trial. At para. 13, the Court confirmed the prevailing principle that the plaintiff cannot receive more in damages than the court awarded at trial.

[38]        In Hogarth v. Rocky Mountain Slate Inc., 2013 ABCA 57, leave to appeal ref’d [2013] S.C.C.A. No. 160, the point was made even more starkly:

[164]    The effect of Bedard is that the risk of a Pierringer agreement falls on the plaintiff. If it settles and “under-recovers” from the settling defendant, it will not be able to make up that shortfall from the non-settling defendants. On the other hand, if it “over-recovers” from the settling defendant (as in Bedard) it will not be allowed to keep the windfall.

[39]        I conclude that Hogarth correctly summarizes the effect of the decisions in Dos Santos and Bedard. In the result, I find that at least some of the settlement funds paid by the Settling Defendants to the plaintiff must be deducted from the damages that I have found the plaintiff is owed by the Province.  

Millennial Knowledge of Mortgage Risks Low

A recent survey among Ontario millennials raises concerns about how prepared those with mortgages are to deal with the likelihood of rising interest rates, and how ready first-time homebuyers are for the realities of having a mortgage.

The survey conducted by Environics Research for the Financial Services Commission of Ontario (FSCO) asked how confident Ontariomillennials are when dealing with banks and other lenders regarding mortgages. Only 12 per cent of those likely to get a mortgage said they felt very confident that they know everything they need to know to be able to make the best decisions for themselves. Forty-seven per cent said they were not very or at all confident.

Other findings included:

  • Only 22 per cent of millennials likely to get a mortgage knew that they would have to contribute at least five per cent of the purchase price as a down payment in order to buy a home in Ontario.
  • When asked about closing costs, only 39 per cent named legal fees, 24 per cent Land Transfer Tax and eight per cent insurance such as home insurance. Twenty-five percent said they didn’t know what closing costs might be.
  • Meanwhile, of millennials who already have a mortgage, many are not prepared to deal with unexpected events or costs:
  • Just 42 per cent said they have built up six months of emergency savings in case something unexpected happens such as losing a job;
  • Only 37 per cent said they understand very well what happens if they miss a mortgage payment; and
  • Only 43 per cent have a life, disability or critical illness insurance policy on the mortgage.

The survey was conducted as part of FSCO’s Financial Literacy Month campaign that aims to increase awareness among typical first-time homebuyers aged 25-34, of the responsibilities of getting a mortgage. The campaign will also improve knowledge about their rights as financial consumers.

FSCO recommends Ontarians planning to renew or obtain a mortgage should at the very least:

  • Ensure they are able to afford the mortgage by taking a close look at their finances, future plans and lifestyle, considering not just how much money they have today, but their financial position for the length of the mortgage.
  • Consider how they would manage payments if their income fell, their expenses rose, or their mortgage payments increased.
  • Plan ahead for hard times by building up emergency savings, identifying other funds they can access and clarifying payment options available on their mortgage contract.
  • Do their research regarding the process of saving, shopping and applying for a mortgage by visiting FSCO’s Understanding Mortgages website and other helpful online resources.

Quick Facts

  • One million home owners in Canada renewed or refinanced their mortgages in 2015, with the average still owing $203,000(Mortgage Professionals Canada)

Additional Resources

Quotes

“Buying a home is an enormous responsibility and agreeing to a mortgage loan is a serious commitment. Being informed empowers you to make good financial decisions for today and for your future.”

– Anatol Monid, Executive Director, Licensing and Market Conduct Division, FSCO

Survey Methodology

  • This online survey was conducted by Environics Research from October 19th to 24th, 2016 with a representative sample of n=801 Ontario adults aged 25 to 44, including n=495 Millennials (age 25-34) and n=306 members of “Gen-X” (age 35-44). Quotas were set by region, age and gender to ensure the sample was representative of this population, as defined by the most recent National Household Survey data.
  • Because an online survey is not a probability sample, a margin of sampling error cannot be ascribed.

About FSCO

FSCO’s legislative mandate is to provide regulatory services that protect the public interest and enhance public confidence in the sectors it regulates. FSCO regulates the insurance sector; pension plans; loan and trust companies; credit unions and caisses populaires; the mortgage brokering sector; co-operative corporations in Ontario; and service providers who invoice auto insurers for statutory accident benefits claims. FSCO is accountable to the Minister of Finance.

About Environics Research

Environics Research is one of Canada’s leading consultancies, offering data-based advice in support of clients’ strategic, communications, policy, reputational and issues management challenges. Headquartered in Toronto, Environics is a full-service, Canadian-owned company that has been providing consulting and research services for governments, businesses and not-for-profit associations since 1970. Learn more at www.environicsresearch.com

SOURCE Financial Services Commission of Ontario

Updating Ontario’s Financial Services And Pension Regulatory Regime

Borden Ladner Gervais LLP | Lexology

On November 14, 2016, Ontario’s Finance Minister, Charles Sousa, delivered to the Provincial Legislature the 2016 Ontario Economic Outlook and Fiscal Review (the “Outlook”). The Outlook includes information on the Government’s plans to establish a new financial services and pensions regulator and to modernize the Credit Unions and Caisses Populaires Act, 1994 (the “Act”). The Outlook also included an update on the review of the regulatory framework relating to financial planning and financial advisory services and on plans to revise the regulation of the activities of mortgage brokers in respect of syndicated mortgages.

The Outlook outlined briefly the Government’s plans to introduce legislation to create a new provincial Financial Services Regulatory Authority (“FSRA”). The FSRA will oversee credit unions, mortgage brokers, provincial pension plans and provincially regulated insurers (and agents) and will include the creation of an Office of the Consumer.

The creation of the FSRA was one of the key recommendations made by an advisory panel that was asked to review the mandates of the Financial Services Commission of Ontario (“FSCO”), Financial Services Tribunal and the Deposit Insurance Corporation of Ontario. In the Outlook Minister Sousa notes that the establishment of the FSRA would represent an important first step towards the panel’s vision for modernizing and strengthening the regulation for financial services and pensions in Ontario.

The Outlook also outlined the Government plans to amend the Act to provide authority to set different deposit insurance limits for different insurable deposits, therefore enabling regulations to be proposed to set the deposit insurance coverage limit for non-registered deposits at $250,000; remove differentiated rules for small credit unions; and permit credit unions to enter into loan syndication agreements with credit unions in other provinces. In addition, the Government plans to propose amendments to regulations under the Act and other relevant statutes that would further implement the above measures and would permit credit unions to establish or acquire a corporation that is an insurance agent or a registered insurance broker; and address provisions in regulations under various statutes to include credit unions as permissible financial institutions.

In addition, Minister Sousa provided an update on the ongoing review by an independent committee regarding the regulatory framework relating to financial planning and financial advisory services. The Outlook indicates that the final report is expected to be released in early 2017.

Court Of Appeal Takes Expansive Approach To Definition Of “Accident” In Caughy Decision

Lat Updated: November 18, 2016 | Nicholaus de Koning | Miller Thompson

The Ontario Court of Appeal’s decision in Caughy v. Economical Mutual Insurance Company 2016 ONCA 226 seems to have expanded the definition of “accident,” for the purposes of statutory accident benefits, to include a trip and fall incident.

Recall the definition of “accident” in the Statutory Acident Benefits Schedule- Effective September 1, 2010(“Schedule”) is “an incident in which the use or operation directly causes an impairment or directly causes damage to prescription eyeware, denture, hear aid, prosthesis or other medical or dental device.

The unfortunate Mr. Caughy suffered what turned out to be devastating spinal cord injuries as a result of what could have been a rather innocuous event: while playing tag with his children at a campground, he tripped and fell on a motorcycle parked near his trailer. Mr. Caughy had originally parked his trailer close to another camper, leaving a sort of walkway between the trailers. Unbeknownst to him, the motorcyclist had parked the motorcycle in the darkened walkway during the evening hours. Mr. Caughy (who had been drinking a “considerable” amount of alcohol) fell head first into the trailer, suffering serious spinal cord injury. One wonders if the resulting decisions illustrate the adage that hard cases make bad law.

At the lower court stage, the presiding judge, Justice Nightingale found this scenario constituted an “accident.” Justice Nightingale noted that the Supreme Court of Canada, in the 1995 decision Amos vs ICBC, under differently worded legislation, established a two-fold test:

  1. Did the accident result from ordinary and well known uses to which automobiles are put (the “Purpose Test”)
  2. and, was the relationship casual or merely fortuitous or incidental? (the “Causation Test”)

Justice Nightingale then noted that the Ontario legislation was amended in 1996 by eliminating the phrase “directly or indirectly” and limiting the definition to impairments caused “directly” by use or operation of a vehicle. In various Ontario Court of Appeal decisions (subsequent to Amos), such as Greenhalgh vs ING Halifax 2004 CanLII 21045 (ON CA), the test was refined such that the second branch, the Causation Test, requires consideration of whether, even if the “use or operation” of the vehicle was “a cause” of the injury, was there an intervening act which cannot be said to be “part of the ordinary course of things”. Another consideration is that of dominant feature.

Justice Nightingale reasoned that the “Purpose Test” was met because the parking of the motorcycle (albeit in a walkway intended for pedestrians) was an ordinary use to which vehicles are put. It appeared the motorcycle had been parked there temporarily. It had not been abandoned nor was there any evidence it was inoperable. Most vehicles are parked most of the time.

Justice Nightingale gave more attention to the Causation Test. He accepted that the “direct” causation requirement is more stringent than that under the old “direct or indirect” legislation. He observed the Court of Appeal’s reasoning in cases such as Greenhalgh that “it is not enough that an automobile was somehow involved in the incident giving rise to the injury” and that “it is not enough to show that the automobile was the mere location of an injury inflicted by a tortfeasor.” After articulating this, Justice Nightingale reasoned the Causation Test was met because the parking of the motorcycle was the dominant feature of the incident and it was not ancillary. The fact that Mr. Caughy had been drinking alcohol and running in a dark area were not “intervening events” sufficient to break the chain of causation.

On appeal, Economical restricted its argument to the Purpose Test. It did not challenge the finding that the Causation Test has been met. Economical’s main argument was that the Purpose Test requires that there be some active use. Economical argued that since the motorcycle was parked and its operator apparently not close by, it had been abandoned. An analogy to a tree trunk was drawn. The Court rejected this argument, stating first of all, there was no evidence the motorcycle was “abandoned” (as opposed to being parked for a few hours) and secondly, there is no active use component in the Purpose Test. Rather, the issue is whether the incident arose from the “ordinary and well-known activities” to which vehicles are put. Parking a vehicle is a well-known activity associated with a vehicle. The Court noted that “use” is an important part of the analysis under the Causation Test- but again, the appeal was not framed in relation to that.

Read in a superficial way, the Court of Appeal’s decision suggests that the Purpose Test is just a gate keeping device to rule out “aberrant” uses of a vehicle such as using a vehicle as a diving platform or to prop up a shed (as mentioned in Vytlingam vs Citadel, a Supreme Court decision referred to by the Court of Appeal). On that point, it is difficult to see anyone disagreeing with the Court’s observation that parking a vehicle is an ordinary activity in the sense that any vehicle must be parked at some point. But if the Purpose Test is just a simple screen to rule out “aberrant uses” then it doesn’t serve much purpose, as almost any incident involving a vehicle will pass the test other than very obvious aberrant uses (such as using a car as a diving platform, although some Arbitrators may beg to differ). Additionally, the argument (although unsuccessful in this case) that a vehicle is parked is evidence of “lack of use” and “lack of operation” has some strength.

The Court of Appeal may cause confusion for those trying to understand the boundary between the Purpose Test and the Causation Test. Moreover, whether one is considering the Purpose Test or the Causation Test, the Court of Appeal’s decision represents a departure from previous decisions, which do, in fact, at least imply an “active use” element in the overall analysis. Not least of these is the earlier decision of Justice Laskin of the Court of Appeal in Chisholm v. Liberty Mutual Group [2002] O.J. No. 3135. That case involved a motorist who was seriously injured in a drive by shooting. Justice Laskin agreed with the lower court judge that the direct cause of his injuries was gunfire, not use or operation of a vehicle.

In Chisholm, Plaintiff counsel argued that the relevant consideration was “but for,” since “but for” being in his car, Mr. Chisholm would not have been shot. But Justice Laskin noted that “but for” is merely an exclusionary device. If the “but for” test is not met, then the injury would have happened regardless and causation is not established. If the “but for” test is met, then the use of the vehicle is “a factual cause” of the injury. But legally, direct causation requires more than that. Justice Laskin used the analogy of a row of dominoes in relation to direct causation: “one thinks of something knocking over the first in a row of blocks, after which the rest falls down without the assistance of any other act.” Justice Laskin also approved a definition from Black’s Law Dictionary as follows: “the active, efficient cause that sets in motion a train of events which brings about a result without the intervention of any force started and working actively from a new and independent source.” Accordingly, Mr. Chisholm’s use of a vehicle was “a” factual cause of his injury, but it was not the “direct cause” from a legal standpoint. By analogy, the motorcycle over which Mr. Caughy tripped was “a” cause of his injury, but it is questionable whether it should be a “direct cause” to the requisite legal degree. If a vehicle is parked for several hours, such that it basically constitutes an obstacle to pedestrians, can it really be said to be an “active and efficient cause” that “sets in motion a train of events?”

Ultimately, one passage from Chisholm has particular resonance in the Caughy decision. “The 1996 Schedule reflects a government policy decision. The government decided to circumscribe the insurance industry’s liability to pay no-fault benefits by holding it responsible only for injuries directly caused by the use or operation of a car. Like almost any statutory standard, the direct causation requirement will, at the margins, produce hard cases, perhaps even sympathetic cases and seemingly arbitrary results.”

Disclaimer

The blog sets out a variety of materials relating to the law to be used for educational and non-commercial purposes only; the author(s) of the blog do not intend the blog to be a source of legal advice. Please retain and seek the advice of a lawyer and use your own good judgement before choosing to act on any information included in the blog. If you choose to rely on the materials, you do so entirely at your own risk.

 

Canada not prepared to deal with financial impact of a major earthquake

HIGHLIGHTS

  • Canada is not prepared to deal with the macroeconomic and fiscal consequences of a massive earthquake.
  • A large-enough earthquake would overwhelm the Canadian economy, leading to financial contagion that would delay rebuilding and result in additional long-term economic loss.
  • The government can play a role in mitigating these economic and fiscal costs.

OTTAWA, Nov. 22, 2016 /CNW/ – A massive earthquake off the coast of British Columbia has the potential to cause widespread failure among insurance companies and trigger a domino effect across the financial sector, according to a new Conference Board of Canadareport, Canada’s Earthquake Risk: Macroeconomic Impacts and Systemic Financial Risk.

“As the earthquake in New Zealand earlier this month reminds us, we cannot prevent massive earthquakes from happening. However, we can lessen the impact of a massive quake on the economy by putting in place additional backstop measures to protect the insurance industry and the financial sector more broadly,” said Pedro Antunes, Deputy Chief Economist. “At the industry’s current levels of capitalization, Canada is not prepared to deal with the macroeconomic and fiscal consequences of a large earthquake. It is important for Canadians, businesses and government leaders to understand that the current regulatory regime may not be able to protect our economy from a major disaster.”

In this analysis, the Conference Board tests the ability of the Canadian economy to deal with earthquake risk. It estimates the macroeconomic and financial impacts of a major earthquake off the coast of British Columbia and the 10-year period that follows. A massive earthquake, similar to the 2011 earthquake and tsunami in Japan, is considered to be a rare event. Natural Resources Canada estimates the probability of a significant earthquake in Western Canada over the next 50 years at 30 per cent, and between 5 per cent to 15 per cent in Eastern Canada.

The analysis indicates that the fiscal and macroeconomic impacts of such an earthquake would be devastating. Insured losses that exceed $42 billion would surpass the level at which the industry is currently capitalized. Such an earthquake would result in $127.5 billion in total economic losses and could result in approximately 15,000 deaths.

An earthquake of this size would inevitably cause insurance companies to fail. And the existing industry compensation mechanism created to protect policyholders would cause failures to snowball. This would trigger a chain of systemic financial contagion resulting in insolvencies across the industry and the broader financial service sector, while delaying the rebuild and recovery efforts by an estimated two years.

The Conference Board estimates that the earthquake and fallout from financial contagion reduces real gross domestic product (GDP) by a cumulative $100 billion and costs an estimated 437,000 person-years of employment—equivalent to the loss of 43,700 jobs over the 10-year period.

Real GDP losses peak at nearly $38 billion in the third year after the earthquake, and the rebuild effort would not contribute positively to growth until 6 years after the earthquake.

Stringent capital requirements for insurers, while contributing to making the Canadian insurance industry one of the soundest in the world, are not enough to address the very low-frequency, high-severity probable events.

In addition to the $42-billion cost to Canada’s property and casualty insurers, the rebuilding effort would take an enormous toll on all levels of government finances. Taxpayers would have to absorb the costs of losses to both public assets and infrastructure, as well as uninsured private losses. But the financial contagion is also very costly. Reduced revenues and increased government spending add $122 billion in net new public debt to government coffers—nearly double the $63 billion in government borrowing that would be necessary if Canada had a mechanism in place to avoid financial contagion following the earthquake.

While an earthquake this size is an extremely rare event, governments could establish an emergency backstop mechanism that prevents financial contagion and would mitigate economic and fiscal costs.

Sun Life Financial announces industry-leading underwriting and product changes

TORONTO, Nov. 21, 2016 /CNW/ – Sun Life Assurance Company of Canada (“Sun Life”) today announced significant individual insurance underwriting changes and enhanced life insurance products in Canada to make it easier and more convenient to access insurance.

The changes include:

  • Offering life insurance coverage of more than $3 million for people living with HIV, providing the most coverage for the broadest range of ages in the Canadian industry. Sun Life is rolling out HIV life coverage in other markets around the world. Sun Life has been a proud supporter of the Canadian Foundation for Aids Research (CANFAR) since 1996 and a sponsor of CANFAR’s Bloor Street Entertains since 2004.
  • Underwriting requirements such as medical exams, ECG, stress ECGs, oral fluid samples and urine HIV tests will no longer be routinely required for either critical illness or life insurance. Sun Life will now only need an application (no fluids or blood samples) from the majority of Canadians applying for these products. Over three-quarters of Sun Life’s critical illness insurance clients and half of life insurance clients will benefit from these changes.
  • Introducing automatic pre-screening for type 2 diabetes (using A1C test) when blood samples are required. Sun Life has proudly committed more than $17 million in support of diabetes awareness, prevention, care and research initiatives since 2012.
  • The transformation of its individual life insurance products making them more straightforward and flexible.

“This collection of underwriting and product enhancements represents some of the most comprehensive changes made in the industry in over a decade,” says Kevin Dougherty, President, Sun Life Financial Canada. “As part of our strategy, we are strengthening our commitment to making it easier for clients to plan for lifetime financial security and well-being. We are focused on continuing to develop innovative solutions that help do just that.”

Sun Life continually monitors global medical advances to review underwriting requirements and make the client experience easy and helpful. By removing many underwriting requirements, Sun Life is simplifying the application process for Canadians.

Enhanced life insurance products in Canada

In addition to making the mandatory tax exempt rule changes coming into effect January 1, 2017, Sun Life’s individual life insurance products are now even easier to understand and use.

Highlights include:

  • Being the first in the industry to offer clients the opportunity to have guaranteed paid-up participating life insurance policies in as little as eight or 10 years, while having protection for life.
  • Offering tailored universal life insurance with two new death benefit options, one targeted toward business owners and the other which gives clients the opportunity to leave their beneficiaries the basic insurance amount plus all payments made to the policy.
  • Offering diversified investment account options within universal life, including access to funds managed by Sun Life Global Investments (Canada) Inc.

“The new products demonstrate Sun Life’s commitment to understanding Canadians’ needs, and will provide them with a more comprehensive suite of insurance solutions that offer flexibility as their needs change throughout their lifetime,” says Mr. Dougherty.

Sun Life Assurance Company of Canada is a member of the Sun Life Financial group of companies.

About Sun Life Financial

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