Source: https://www.blaneysappeals.com/2019/03/22/blaneys-appeals-ontario-court-of-appeal-summaries-march-18-22-2019/
Timestamp: 2019-04-19 08:16:10+00:00

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Following are this week’s summaries of the civil decisions of the Court of Appeal for Ontario.
In Benarroch v. Fred Tayar & Associates P.C., the Court of Appeal confirmed that lawyers who act for themselves are treated like all self-represented litigants when it comes to awarding costs in their favour. They are not to be paid based on their hourly rate for “lawyer’s” work done on their own case, but rather to compensate them for lost opportunities to earn remuneration from other work.
In McCabe v. Roman Catholic Episcopal Corporation for the Diocese of Toronto, in Canada, the Court split on whether a trial judge erred in leaving the issue of punitive damages to a jury due to the defendant’s failure to admit liability until the morning of the trial. Justice Roberts and Chief Justice Strathy found that the trial judge erred by, in effect, creating a new and unprecedented category of punitive damages. While the defendant’s denial of liability right up until trial may give rise to a considerable costs order pursuant to Section 131 of the Courts of Justice Act Rule 57.01 of the Rules of Civil Procedure, and the court’s inherent jurisdiction to control its process to prevent an abuse of process, it does not provide, on its own, a basis for a punitive damages award. Justice Benotto dissented, and would have upheld the award of punitive damages on this basis. Justice Benotto found that the question of punitive damages should have been put to the jury because the defendant’s failure to admit liability caused the vulnerable respondent to suffer pain.
The respondents requested an extension of time to file a defence and confirmation that they would not be noted in default. Despite Mr. Machado’s confirmation that he would not note any of the respondents in default, he proceeded to do so.
On January 11, 2018, the respondents brought a motion to set aside the noting in default. This motion was granted. In addition, the motion judge observed that Mr. Machado was not a lawyer and therefore, could not represent Mr. Williamson. Mr. Machado informed the motions judge that both he and Mr. Williamson were self-represented and requested time to amend the statement of claim accordingly. The motion judge granted the moving parties several weeks to make this change (the “January 11 Order”).
Based on this breach, the respondents brought a motion to dismiss the action. On March 28, 2018, the motion judge granted the respondents’ motion and dismissed the claim “with prejudice” (the “March 28 Order”). The moving parties, neither of whom attended the hearing, were ordered to pay costs in the amount of $83,937.82.
Did the chambers judge err in dismissing the moving parties’ motion for an extension of time to appeal the March 28 Order?
No. The Court did not find that any factual or legal error had been made by the chambers judge. The Court confirmed that absent legal error or misapprehension of material evidence, the reviewing panel would defer to a chambers judge’s discretionary decision (Yaiguaje v. Chevron Corporation, 2017 ONCA 827 at para. 20).
Reflecting on the behaviour of the moving parties, the Court held that the proposed appeal was “not meritorious”. The Court agreed with the determination of both the motion judge and the chambers judge that the moving parties had “fragrantly, intentionally, and knowingly” breached the January 11 Order. The Court emphasized that this breach, along with the parties’ failure to attend court on March 28, 2018, were “deliberate decisions”. The Court confirmed that if a litigant seeks an “indulgence”, it is appropriate to consider whether the party has shown respect for court orders and the court process. In this case, the moving parties had shown no respect.
When the respondent was 11 years old, he was sexually abused by a now deceased priest. Years later he sued the appellant, the Roman Catholic Episcopal Corporation for the Diocese of Toronto, for damages. After years of denying liability, the appellant admitted liability on the first day of trial and the only issue at trial was the amount of damages. A jury awarded general and aggravated damages of $250,000, damages for loss of income of $280,000, and punitive damages of $15,000. The appellant claimed that damages were inflated by the jury because of inflammatory remarks the respondent’s counsel made to the jury in closing submissions. It further submitted that the trial judge erred in a ruling on the admissibility of hearsay evidence and that the award for punitive damages was unwarranted.
(2) Did the comments of the respondent’s counsel to the jury cause a miscarriage of justice?
(1) No. The trial judge properly excluded the evidence. The trial judge made a ruling that a chart from the sanitarium where the respondent had treatment, and the comments of teachers in the respondent’s academic records were not admissible. The trial judge determined that the history taken from the respondent at sanitarium was not recorded by someone with personal knowledge of the matters being recorded and therefore was inadmissible hearsay. He further concluded that the academic records were inadmissible opinion evidence.
(2) No. The comments made by the respondent did not amount to a miscarriage of justice. The appellant submitted that the comments by the respondent’s counsel were inappropriate and would have inflamed the jury such that a new trial was in order. The respondent’s counsel indicated that the jury should identify with the victim as an 11-year-old, asked the jury to “do the right thing”, referenced facts without an evidentiary basis, such as whether Winston Churchill failed a grade, and other comments. The trial judge took this into account when formulating his charge to the jury.
The Court said that under s. 134(6) of the Courts of Justice Act, a court may only direct a new trial if a substantial wrong or miscarriage of justice has occurred. The Court found that the comments did not lead to a miscarriage of justice for two reasons. First, the comments could not be considered apart from the judge’s charge to the jury. The jury charge made it clear what the jury’s task was and what it should consider, and specifically counteracted some of the specific impugned statements made by the respondent’s counsel. Second, the trial judge was in the best position to assess whether the comments were inappropriate. Furthermore, the Court rejected the appellant’s argument that the award of damages was so far out of the appropriate range that it proved the jury was improperly inflamed because the Court was of the view that damages award was within a permissible range.
(3) No. The award of damages was within the permissible range. The jury award of $250,000 in general damages was well within the range for a serious sexual assault, particularly considering the Court of Appeal’s finding in Zando v. Ali, 2018 ONCA 680 that a range of up to $290,000 can be appropriate in sexual assault cases. The jury award of $280,000 for loss of income for competitive advantage was well supported by the actuarial evidence, and the respondent’s claim was for over $1.7 million.
(4) Yes. Justice Roberts, writing for herself and Chief Justice Strathy, found that the trial judge erred in leaving this issue to the jury for determination because neither the pleadings nor the facts of the case supported such an award. The trial judge agreed with the respondent that the failure of the appellant to admit liability until the morning of the trial would be put to the judge under the category of punitive damages. Justice Roberts stated that, in essence, the trial judge created a new and unprecedented category of punitive damages arising out of the timing of the appellant’s admission of liability, and there was no basis in law for such an award.
Justice Roberts stated that the court must ask two threshold questions in determining whether punitive damages should be granted: first, what is the impugned conduct; and second, whether the impugned conduct rises to the level of egregious misconduct warranting the exceptional award of punitive damages. In this case, the impugned conduct was only the appellant’s delay in admitting liability. There was no allegation or evidence of any misconduct, and the appellant did not deliberately inflict pain on the respondent. The appellant’s exercise of its litigation rights could not be characterized as egregious misconduct warranting punitive damages.
As a result, the trial judge erred in leaving punitive damages to the jury because no reasonable jury, properly instructed, could have made such an award. First, there was no basis in fact or law to punish the appellant for not making an earlier admission of liability. Punitive damages cannot be awarded solely for the failure or delay of a defendant to admit liability. To create such a category of punitive damages would completely undermine the foundation of the litigation process. Second, Justice Roberts rejected the respondent’s argument that the harm he suffered because of the continued litigation process was not obviated by the appellant’s admission of liability because he was still required to go through the painful details of the assaults to prove his damages. The appellant simply put the respondent to the proof of his case, and there was nothing legally wrong with that. Finally, it was procedurally unfair to the appellant to allow the respondent to put forward a new basis for punitive damages that had not been pleaded or alleged until after the trial evidence was completed. The respondent’s counsel had raised the new theory of punitive damages based on the appellant’s delay in admitting liability after the trial judge advised that there was no foundation for punitive damages on the basis of vicarious liability for the misconduct of another.
Justice Roberts concluded by noting that although a defendant’s denial of liability, without more, does not attract and award of punitive damages, it may give rise to a considerable costs sanction pursuant to Section 131 of the Courts of Justice Act, and r. 57.01 of the Rules of Civil Procedure, and the court’s inherent jurisdiction to control its process to prevent an abuse of process. However, a defendant’s failure or delay to admit liability that falls short of litigation misconduct or abuse of process may not even attract elevated costs. In this case, the appellant’s delay in admitting liability until trial should not have been considered under the rubric of punitive damages. Rather, it was more properly a question of costs that could have been left to the trial judge had the parties not agreed on costs.
Justice Benotto dissented on this issue and would have upheld the award of punitive damages. Justice Benotto found first found that, with regard to whether or not there was an independently actionable wrong, the extreme power imbalance and vulnerability of the wronged party are significant features, and punitive damages are awarded when the impugned conduct offends “the ordinary standards of morality or decent conduct”: Norberg v. Whyrib  2 S.C.R. 226 at para 57. Furthermore, the conduct of litigation had been held to be an independent wrong that could give rise to punitive damages in the case Rutman v. Rabinowitz, 2018 ONCA 80. While punitive damages are the exception rather than the norm, they may therefore be awarded to address conduct of the litigation deserving of condemnation. Justice Benotto found that the appellant’s strategic decision not to admit responsibility to a vulnerable victim of abuse given the circumstances was uniquely egregious.
Justice Benotto found that the question of punitive damages should have been put to the jury. The claim for punitive damages was based on the fact that the appellant’s failure to admit liability caused the fragile respondent to suffer pain, and the trial judge accepted evidence that this caused damage to the respondent. Justice Benotto found that the trial judge’s decision to allow the question to be put to the jury was entirely reasonable and was entitled to deference.
With regard to the quantum of punitive damages, Justice Benotto noted that a jury award of punitive damages can only be reversed when it is “so inordinately large as obviously to exceed the maximum limit of a reasonable range within which the jury may properly operate”: Hill v. Church of Scientology,  2 S.C.R. 1130. Justice Benotto stated that the jury’s award was a symbolic condemnation of the appellant’s conduct in failing to admit liability despite knowledge of additional harm to the respondent, and to overturn the jury’s determination would be to sanction the conduct.
The family of the deceased and his estate (the “appellants”) brought a medical malpractice action against multiple health professionals who dealt with the deceased. The deceased’s cancer was not discovered due to a typographical error in a report from a CT scan and a subsequent failure to schedule appointments for an endoscopy with the respondent. Specifically, the report indicated in error that the Plaintiff’s symptoms were caused by another disease as opposed to cancer, and the respondent read this report and made clinical notes to the patient’s file based on it. The jury concluded that the appellants had failed to prove on a balance of probabilities that any of the defendants fell below the standard of care. The appellants appealed from the verdict relating to the respondent, the deceased’s family physician. The appellants maintained that the trial judge erred in his instructions to the jury on two points: (a) standard of care; and (b) error of judgment.
(2) Did the trial judge err in inviting the jury to deliberate upon whether the respondent’s actions resulted from an error of judgment?
As a preliminary matter, the Court reiterated that courts lack technical expertise in relation to the medical profession. Accordingly, when there is expert evidence that doctors act in “accordance with a recognized and respectable practice of the profession”, the doctor will typically not be found negligent: ter Neuzen, at para. 38. However, where it is readily apparent to a non-medically trained person that a standard practice within the medical profession lacks “obvious and reasonable precautions”, the practice itself may be found negligent: ter Neuzen, at para. 51.
(i) No Error in Expert Evidence Instruction: The Court found that the trial judge made an accurate statement of law when he said that in some cases common sense alone dictates the standard of care, while in other cases such as this one, expert evidence is required to assist the court in determining the standard of care. The trial judge did not tell the jury that they could only determine the standard of care on the basis of expert evidence; only that expert evidence was required to “assist” in making that determination.
The Court stated it was important to recall that expert evidence is presumptively inadmissible. It only becomes admissible where, among other things, it is relevant to an issue for resolution and necessary to assist the trier of fact in understanding matters beyond the ken of the average trier of fact: White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, at paras. 14-15, 19. Inextricably linked to the decision to lead actual expert evidence on the issue relating to the standard of care applicable to the respondent was the appellants’ implicit acknowledgment that the evidence was necessary to “assist” the jury in determining the standard of care. The real question was whether the jury was told that they could reject the expert evidence or, if they found a standard practice arising from the expert evidence, that they could find that standard practice was itself negligent. The jury was instructed on both of these points.
(ii) Trial Judge Directed the Jury to Consider Non-Expert Evidence: The Court rejected the appellants’ claim that the jury instructions amounted to an instruction that the jury could only determine the standard of care applicable to the respondent based upon the expert evidence, the corollary being that the jury could not apply their common sense to that question. The appellants appeared to equate “medical evidence” with “expert evidence”, but they are not the same thing. Before the trial judge instructed the jury to consider the “medical evidence,” he specifically referred to not only the expert evidence called by the appellants and the respondent but also “all of the other evidence that you have before you.” The instruction to look to the medical evidence to determine the standard of care was nothing more than a reminder to the jury that they had to determine the live issues relating to the standard of care based upon the evidence they had heard.
(iii) Contextual Analysis Addresses Any Concerns Regarding Expert Evidence Instructions: The Court agreed that when considered in isolation, some of the language in the first two impugned instructions, specifically the language concerning “medical evidence” and expert evidence being “required”, was not ideal. However, the Court found that a contextual analysis addressed these concerns. The Court stated that it was important to examine alleged errors in a jury charge against the entire charge and the trial as a whole: R. v. Jaw, 2009 SCC 42. The standard of review for jury charges does not hold them to a standard of perfection, but asks whether the words have conveyed to the jury the correct legal test to apply, “whether the jury would have properly understood the law at the end of the charge”: Pereira v. Hamilton Township Farmers’ Mutual Fire Insurance Company (2006), 267 D.L.R. (4th) 690 (Ont. C.A.). Having regard to the entire context for the charge, including the contextual backdrop of the trial, the ultimate question was what the jury would have taken from the impugned instructions. It is the “overall effect of the charge that matters”: R. v. Daley, 2007 SCC 53, at paras. 30-31. The Court found that the jury would have understood that they should exercise their common sense and collective wisdom during the entire deliberative process. They would not have thought that their common sense had to be suspended when it came to determining the standard of care and that they could only rely on the expert evidence.
(iv) The Jury Would Have Correctly Understood the Standard Practice Instructions: The Court stated that although there was some merit to the appellants’ submission that the trial judge failed to clearly explain to the jury that it could find the respondent negligent even if it found that he complied with a common medical practice, it was not persuaded that the instructions led the jury into error. If the impugned instructions stood alone, there would be significant force to the appellants’ position that the jury was misled into thinking that compliance with the standard practice would be dispositive of the issue involving standard of care. However, preceding the impugned instructions, the trial judge explained how the jury should approach the standard of practice and its impact on their determination of the standard of care. The jury would have understood that, while a standard practice may be a strong indicator or important evidence of the standard of care, this would only be the case where the jury was satisfied that the standard practice was not itself “obviously fraught with serious and unacceptable risks” or “shown to be unsafe and dangerous”. Read contextually, the instructions conveyed these salient aspects of the ter Neuzen principle to the jury. This was also bolstered by the context of the 30-day trial, and the parties’ closing submissions were further evidence that the jury would have understood that it was open to them to find that compliance with standard practice did not immunize the respondent from liability.
(v) No Substantial Wrong or Miscarriage of Justice: The Court found that even if the appellants were right that the impugned instructions left the jury confused about the ter Neuzen point, no substantial wrong or miscarriage of justice was occasioned by the instructions on the effect of a standard practice: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(6). The Court stated that although it can be both difficult and risky to interpret a jury’s verdict, express and implied facts are sometimes inextricably linked to that verdict: R. v. Ferguson, 2008 SCC 6, at para. 17; R. v. Brown,  2 S.C.R. 518 at p. 523. The verdict in this case was one that both expressly and by implication demonstrated that the appellants had failed to establish a substantial wrong or miscarriage of justice. It was implicit in the jury’s express finding, that the respondent had not fallen below the standard of care, that the jury rejected the appellants’ expert opinion evidence about what was required of the respondent in the circumstances. Having rejected the appellants’ expert’s opinion on the matter, the Court stated it was difficult to imagine that, even if the appellants were right about the impugned instructions, the jury would have come to any different conclusion even with a pitch perfect ter Neuzen instruction.
(2) No. The appellants claimed that the trial judge erred by inviting the jury to deliberate upon whether the respondent’s actions resulted from an error of judgment. Their overarching complaint was that the jury was provided an instruction on the principle. Their underlying complaint was that, even if the instruction was properly given, the trial judge erred in how he conveyed the principle.
The Court did not agree that the respondent exercised no medical judgment in how he responded to the results shown on the CT scan report. The appellants’ case against the respondent implicated more than just administrative problems. The respondent did not see the deceased’s situation as urgent because when scanning the abdomen and the pelvis areas, there is as much as a 30 percent chance of discovering something erroneously. Furthermore, the respondent noted that there was no urgency noted in the CT scan report. Accordingly, it would have been open for the jury to conclude that the respondent applied his judgment and medical experience to the report and came to the decision that, while follow-up was required, it was not urgent. Adding support to this conclusion was the fact that, until this appeal, the appellants did not object to the charge on error of judgment. The parties at trial were in the best position to know whether the instruction was relevant or not. Their failure to object was a strong indicator of what the parties thought were relevant issues at trial and a good window into the “seriousness of the alleged misdirection”: R. v. Jacquard,  1 S.C.R. 314.
Secondly, the Court rejected the appellants’ complaint that the charge on error of judgment was inappropriately crafted. The trial judge said to the jury: “We do not condemn as negligence, something which is the result of an honest error in judgment or accident if the skill, knowledge and judgment of the average practitioner in the field was used.” The appellants emphasized that this was not a case about “accident”. The Court found that the references to “accident” were superfluous and would not have impacted the jury’s deliberations. Read contextually, the trial judge accurately conveyed the principle to the jury. The Court also rejected the appellant’s issue with the trial judge’s comment regarding doctors becoming more concerned with their potential liability of facing a lawsuit as opposed to the good of their patients, resulting in the initiative of doctors being stifled. The following passage of the instruction contextualized it properly, and there was also support for this proposition in numerous other decisions. Trial judges are properly granted a wide berth in determining how best to structure their jury charges: R. v. Speers, 2017 ONCA 333. The ultimate question was whether the issue has been accurately conveyed to the jury and read contextually and the Court was satisfied that the jury understood their task in this case.
An application judge dismissed the appellants’ application to assess the accounts of the respondents, who were the appellants’ former lawyers. Following the dismissal, costs submissions were received. The respondents prepared a costs outline in which they claimed, on a partial indemnity basis, $60,583.05 in fees, disbursements, and HST. The appellants argued that, absent evidence of opportunity costs due to the time they spent responding to the application, the respondents could not recover any amount as costs.
The application judge accepted that the respondents had lost the opportunity to bill other clients because of time spent on the application. He rejected a “never ending forensic inquiry” into the time the lawyers could have spent working evenings and weekends. He also found that partial indemnity rates between $300-350/hour were reasonable given the lawyers’ experience. The judge further rejected the submission that some of the time claimed should be excluded because it was for work that would normally be done by a client. The application judge found that all of the work devoted to the file was appropriately carried out by a lawyer. He went on to add, however, that if some of the time should have been discounted because it was in fact time that would normally be expended by a client rather by a lawyer, he would nonetheless make the same award on the basis that substantial indemnity costs would normally apply in the circumstances.
(1) No. The Court rejected the appellant’s argument that the application judge should not have allowed the respondents to file reply affidavits in which they claimed to have suffered lost opportunity costs. It was open to the application judge to accept the reply evidence. The appellants suffered no prejudice, as they were given the opportunity to cross-examine and make submissions in response. The Court similarly declined to interfere with the finding that the respondents had suffered lost opportunity costs. Fong and later cases stipulate that self-represented litigants must show that they incurred an opportunity cost by forgoing remunerative activity. Those cases do not suggest that claims for lost opportunity costs should be complex hearings where the self-represented claimant must account for every minute and every penny.
(2) Yes. The Court explained that Fong established that self-represented litigants do not have an automatic right to recover costs, and are not entitled to costs calculated on the same basis as those of the litigant who retains counsel. The trial judge retains “discretion to make the appropriate costs award, including denial of costs”. By awarding the respondents their costs on a partial indemnity basis, without making any adjustment for time that the respondents would have had to devote as “clients” if they had hired external counsel, the Court found that the application judge effectively treated the respondents as counsel rather than as self-represented litigants. This approach constituted an error for several reasons, which the Court explained in detail.
Where the self-represented litigant is a lawyer, they will not recover anything for the time spent on the matter that would necessarily have been devoted to the case had outside counsel been retained. There will likely be no clear way to differentiate between time devoted by the lawyer that would have been spent on the matter as “client” and time devoted in lieu of retaining an outside lawyer to deal with the matter. Some time is clearly either “client time” or “lawyer time”, but much of the time will be a blend of both.
Other categories of work are more difficult to label, as they have elements of both client involvement and lawyer work. One such category is the drafting of affidavits. This task involves the client providing the factual information that will go into the affidavit, but also involves the lawyer drafting and reviewing the affidavit, as well as filing it. Where the lawyer is self-represented, it will be impossible to determine with precision how the time spent by the lawyer is to be allocated as between his or her role as “client” and “lawyer”. This difficulty is one of the reasons why, in Fong, the Court suggested that a trial judge is better placed than an assessment officer to set the amount of costs for a self-represented party. It also explains the court’s use of an “allowance” rather than an award based on an hourly rate.
The Court also reiterated the caution made in Fong that an award of lost opportunity costs should be “only a ‘moderate’ or ‘reasonable’ allowance for the loss devoted to preparing and presenting the case”. This signals that the court should avoid a straight application of a lawyer’s hourly rate. Regular hourly rates are of course relevant, as would be the daily rate of a self-represented labourer or the lost profits of a self-employed business person. These amounts should be taken into account in the analysis of a proper costs award, but they cannot be recovered as they would if a lawyer had been hired as external counsel.
In summary, a trial or application judge retains the discretion to award or not award costs. Where the judge determines that an award is warranted and, based on the record, the judge is satisfied that lost opportunity costs have been suffered because the self-represented party has forgone remunerative activity, the judge is either to assess and fix “moderate” or “reasonable” costs, or to provide clear guidelines to an assessment officer.
Where the self-represented party is a lawyer, the lawyer will be treated in substantially the same way as any other self-represented litigant. He or she will receive no compensation for the time have devoted to the matter as a client. In addition, the lawyer will not necessarily recover their regular or even partial indemnity rate for all of the time devoted to the work ordinarily done by a lawyer. He or she will only get an “allowance” for the lost opportunity to devote the time to remunerative activities.
Accordingly, although the Court concluded that the application judge’s award could not stand, it disagreed with the appellants’ submission that only nominal costs should be awarded. The case law on which the appellants relied did not stand for the proposition that a nominal amount would be appropriate in the circumstances; rather, a nominal award is more appropriate where there is little evidence of lost opportunity costs (which was not the case here). The Court therefore varied the costs award, but did not reduce it to a nominal amount.

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