COURT OF APPEAL FOR ONTARIO

CITATION: Solea International BVBA v. Bassett
    & Walker International Inc., 2019 ONCA 617

DATE: 20190725

DOCKET: C66182

Feldman, Hourigan and Brown JJ.A.

BETWEEN

Solea
    International BVBA

Plaintiff (Respondent)

and

Bassett & Walker
    International Inc.

Defendant (Appellant)

Geoff R. Hall and Amanda D. Iarusso,
    for the appellant

Assunta Mazzotta and Timothy J. Law,
    for the respondent

Heard: July 2, 2019

On appeal from the judgment of Justice Andra
    Pollak of the Superior Court of Justice, dated October 23, 2018, with reasons
    reported at 2018 ONSC 4261.

BROWN
    J.A.:

I.        OVERVIEW

[1]

The respondent, Solea International BVBA
    (Solea), a trader of seafood products, sold two containers of frozen shrimp
    to Bassett & Walker International Inc. (BWI), a Toronto-based company.
    Solea sourced the shrimp from an Ecuadorian supplier, Castromar S.A. Under the
    terms of its sales contract with BWI, Solea was to deliver the shrimp CIF
    Cost, Insurance and Freight
[1]
 to the Mexican port of Manzanillo.

[2]

The shrimp arrived at the port and was
    off-loaded on June 13, 2014. By mid-August, BWI still had not been able to pass
    the goods through Mexican customs. Although first assuring Solea that it would
    pay the invoice, ultimately BWI refused to pay Soleas invoice for the contract
    price of the shrimp. The shrimp was returned to Ecuador.

[3]

Solea commenced this action for payment of the
    purchase price of U.S. $228,604.50 plus interest at 8%. BWI initially asserted
    a counter-claim for lost profit, but later abandoned that claim.

[4]

The motion judge granted judgment to Solea for
    the full amount of the purchase price, together with pre-judgment interest. BWI
    appeals. For the reasons that follow, I would dismiss the appeal.

II.       PROCEDURAL
    HISTORY

[5]

Two rounds of summary judgment motions have
    taken place in this proceeding.

[6]

In Round One, Pollak J. granted summary judgment
    to Solea for the contract price: 2016 ONSC 4860. This court set aside that judgment
    on the basis that the parties and the motion judge had failed to consider
    whether the
International Sale of Goods Act
, R.S.O. 1990, c. I.10 (the

ISGA
), now titled the
International Sales Conventions Act
,
    S.O. 2017, c. 2, Sch. 8, s. 2,
[2]
and its Schedule 1, the
United Nations Convention on Contracts for the
    International Sale of Goods
(the
Convention
), applied to the
    transaction: 2017 ONCA 886. On that appeal, the parties agreed that the
ISGA
and its schedule, the
Convention
, applied. This court remitted the
    matter back for a new hearing on the parties competing summary judgment
    motions.

[7]

In Round Two, by order dated October 23, 2018
    Pollak J. again granted Solea summary judgment, ordering BWI to pay the
    Canadian dollar equivalents of US$228,604.50 and US$79,817.40 for the contract
    price and prejudgment interest respectively: 2018 ONSC 4261. The motion judge
    applied a prejudgment interest rate of 8% per annum.

[8]

On the summary judgment motion, BWI took the
    position that it was not required to pay the invoiced purchase price because:
    (i) Solea failed to comply with a term of the contract that required it to
    provide proper import documents, specifically a health certificate and
    certificate of analysis; (ii) by reason of that lack of proper documentation,
    BWI did not accept the shipment on delivery in Mexico; and (iii) Solea accepted
    the return of the shipment to Ecuador.

[9]

The motion judge found against BWI. Based on her
    review of the evidence, she found that:

·

The shrimp was delivered at the Mexican port on
    June 13, 2014;

·

On August 11, 2014 BWI advised Solea that it
    would not pay for or accept the shrimp;

·

The shrimp was returned to the original
    supplier, Castromar, in Ecuador on September 21, 2014.

·

Solea made no representation, promise or
    agreement that it would not require BWI to pay the purchase price if the
    product was returned to Ecuador; and

·

In the arrangement to return the goods from
    Mexico to Ecuador, title to the shrimp was not reconveyed by BWI to Solea and
    BWI was obliged to pay the purchase price.

[10]

The motion judge found that BWI: (i) did not
    declare the contract avoided pursuant to Art. 49 of the
Convention
;
    and (ii) had not established the applicability of either estoppel or unjust
    enrichment as a defence to paying the purchase price.  In the result, the
    motion judge found BWI liable for the purchase price, together with prejudgment
    interest at 8% in accordance with the terms of the invoice.

[11]

The evidence before the motion judge also
    disclosed that: (i) by mid-August 2014, when BWI asked Solea to take the
    containers back, the price of shrimp in Mexico had dropped by approximately 25%
    from BWIs contracted purchase price with Solea; and (ii) the margin on BWIs
    resale deal for the shrimp was about $6,500, which adds context to BWIs
    mid-August 2014 complaint to Solea about the bleeding it was suffering by
    paying demurrage, electricity, and storage charges on the containers stuck in
    the Mexican port, which the evidence indicated were close to US$40,000.

III.      ISSUES
    ON APPEAL

[12]

On this appeal, BWI does not challenge the
    motion judges conclusion that it breached the contract by failing to pay the
    purchase price. BWI advances two discrete grounds of appeal:

(i)

the motion judge committed an error of law by
    concluding that the
Convention
did not impose
    on Solea a duty to mitigate; and

(ii)

the motion judge erred in awarding prejudgment interest at the rate
    of 8% per annum.

IV.     DUTY
    TO MITIGATE

The applicability of Art. 77 of the
Convention

[13]

In her reasons, the motion judge found that [t]he
    duty to mitigate is not relevant to Soleas claim for payment of the purchase
    price of the shrimp. It appears that the motion judge accepted the
    respondents argument that the provisions in the
Convention
on
    mitigation apply only to claims for damages (Art. 61(1)(b)) but not to an
    action for judgment in the amount of the purchase price.

[14]

BWI submits the motion judge erred in law in so
    interpreting the
Convention
, arguing that Art. 77 imposes a duty to
    mitigate in the circumstances.

[15]

Art. 77 appears in Ch. V of the
Convention
dealing with Provisions common to the obligations of the seller and of the
    buyer; section II of that chapter concerns Damages. Art. 77 states:

A party who relies on a breach of contract
    must take such measures as are reasonable in the circumstances to mitigate the
    loss, including loss of profit, resulting from the breach. If he fails to take
    such measures, the party in breach may claim a reduction in the damages in the
    amount by which the loss should have been mitigated.

[16]

Ch. III of the
Convention
deals with
    the obligations of the buyer. Section III concerns Remedies for breach of
    contract by the buyer. Arts. 61(1) and (2) state:

(1) If the buyer fails to perform any of his
    obligations under the contract or this Convention, the seller may:

(a) exercise the rights provided in
    articles 62 to 65;

(b) claim damages as provided in articles
    74 to 77.

(2) The seller is not deprived of any right he
    may have to claim damages by exercising his right to other remedies.

[17]

Article 62 states that the seller may require
    the buyer to pay the price, take delivery or perform his other obligations,
    unless the seller has resorted to a remedy which is inconsistent with this
    requirement.

[18]

The commentary on Art. 77 consistently takes the
    position that the duty to mitigate contained in that article does not apply to
    an action for the purchase price by a seller under Art. 62: see, for example,
    Stephan Kroll, Loukas Mistelis & Pilar Perales Viscasillas,
UN
    Convention on Contracts for the International Sale of Goods (CISG), A Commentary
,
    (Munchen: C.H. Beck, 2011) (the
CISG Commentary
), at p. 1035; Peter
    Riznik, Some Aspects of Loss Mitigation in International Sale of Goods, 2010
    VJ 267, at p. 270.

[19]

The motion judge evidently regarded Soleas
    action claiming judgment for the amount of the purchase price as a requirement
    by the seller that the buyer pay the purchase price within the meaning of Art.
    62 of the
CISG
.

[20]

The motion judges view finds support in the commentary
    about Art. 62.  For example,
the
CISG Commentary
states,
    at p. 858: Art. 62 grants the seller the right to demand the specific
    performance of any obligation owed to him by the buyer, including the payment
    of the price  Art. 62 adopts, at least in principle, the position of the civil
    law tradition  specific performance is available as of right for any breach of
    any obligation of the buyer, including the obligation to pay the price.
    Professor Jacob S. Ziegel has observed that: Whatever else it is, an action
    for the price is not an action for damages: The Remedial Provisions in the
    Vienna Sales Convention: Some Common Law Perspectives, Ch. 9 in Galston &
    Smit eds.,
International Sales: The United Nations Convention on Contracts
    for the International Sale of Goods
,
(New York: Matthew
    Bender 1984)
, at p. 9-41.

[21]

While Art. 61(b) applies Art. 77s duty to
    mitigate to a claim for damages and not to an action by a seller pursuant to
    Art. 62 to require the buyer to pay the price, the commentary on Art. 62 in
    the
UNCITRAL Digest of Case Law on the United Nations Convention on
    Contracts for the International Sale of Goods
, 2016 (the
Digest
)
    recognizes that this principle cuts against the grain of common law remedial
    principles stating, at p. 287:

Article 62 entitles the seller to require the
    buyer to perform its obligations. This remedy is generally recognized in civil
    law systems, whereas common law systems generally allow for the remedy (often
    under the designation specific performance) only in limited circumstances.

[22]

The
CISG Commentary
explores this
    tension between Art. 62 and common law jurisdiction remedies in its section on
    The right to demand payment. It states, at p. 859:

The right to demand the specific performance of the obligation
    to pay the price is probably the most controversial part of this provision.
    During the negotiations of the Convention the delegation of the USA proposed
    that the buyer may require payment unless in the circumstances the seller
    should reasonably mitigate the loss resulting from the breach by reselling the
    goods. This would have made the CISG similar to the law in most common law
    jurisdictions. This was in fact also effectively the solution adopted by the
    ULIS, the predecessor of the CISG.

In the end, however, the US proposal and the approach adopted
    by the ULIS were rejected and there is, therefore, no need for the seller to
    mitigate his loss  he is entitled to ask for the payment of the price without
    having to try to sell the goods to a third party. The CISG adopts a pure civil
    law formulation of the rule. In practice, however, it is very likely that in
    the vast majority of cases where the seller has possession of the goods and
    there is a market for these goods, the seller will opt to cut his losses,
    attempt to avoid the contract as soon as possible (Art. 64) and resell the
    goods (maybe even using Arts 85 and 88) rather than seek an order for specific
    performance of the obligation to pay that would have to be enforced in the
    buyers country. In practice, therefore, the theoretical differences between
    the civil law and the common law may not be as important as they may seem.
In
    addition, Art. 28 will often mean that sellers will have to mitigate their loss
    by reselling the goods. There will however be instances where the seller will
    prefer to seek the specific performance of the obligation to pay
. [footnotes
    omitted, emphasis added]

[23]

The reference to Art. 28 in the last portion of
    this extract from the
CISG Commentary
is significant. Art. 28 states:

If, in accordance with the provisions of this Convention, one
    party is entitled to require performance of any obligation by the other party,
    a court is not bound to enter a judgement for specific performance unless the
    court would do so under its own law in respect of similar contracts of sale not
    governed by this Convention.

[24]

As explained in the
CISG Commentary
:
    Art. 28 is a compromise position between the common laws preference for money
    damages in the event of a breach of contract and the civil laws preference for
    performance  To the extent that [Art. 28] applies, it restricts the ability of
    the parties to demand performance: at pp. 370 and 375. The
CISG Commentary
observes in its section on Art. 62: In practice, however, the general
    availability of specific performance under the CISG will be limited,
    particularly in common law jurisdictions by Art. 28: at pp. 858-859. This
    point is picked up in the
Digest
which notes, at pp. 283 and 298, that
    the right to require performance under Art. 62 is limited by Art. 28:

As was the case with the provisions on the buyers remedies,
    the articles governing the sellers remedies operate in conjunction with a
    variety of provisions outside [Section III of Part III, Chapter III]. Thus, the
    sellers right to require performance by the buyer is subject to the rule in
    article 28 relieving a court from the obligation to order specific performance
    in circumstances in which it would not do so under its own law.

The second limitation derives from article 28 of the
    Convention, under which a court is not bound to order specific performance in
    the sellers favour, even if that would not otherwise be required under article
    62, if the court would not do so under its domestic law in respect of similar
    contracts not governed by the Convention.

[25]

In its statement of claim, Solea does not expressly
    seek specific performance of the sales contract. It simply claims $228,604.50
    U.S. dollars or the Canadian equivalent at the date of judgment. The
    commentary on the Convention would permit characterizing Soleas action as one
    by the seller to require the buyer to pay the price within the meaning of
    Art. 62. However, any ultimate characterization of Soleas claim for the
    purpose of determining whether an Art. 77 duty to mitigate applies would need
    to take into account the availability of an Art. 62-based specific performance
    remedy in a common law jurisdiction such as Ontario in view of the limitation
    placed by Art. 28.

[26]

The parties did not address what effect, if any,
    Art. 28 may have on any duty for Solea to mitigate in its Ontario action for
    the purchase price. As a result, the motion judge did not express a view on the
    matter.

[27]

While it would be open to the panel to ask the
    parties to provide further submissions on this point, I do not think it
    appropriate or necessary in the specific circumstances of this case. It is not
    appropriate because: Solea claims a modest amount, utilizing the Simplified
    Procedure; its action is now over four years old; and this is the second trip
    to the Court of Appeal. An end needs to be brought to this action. Further
    submissions are not necessary because this appeal can be decided without
    expressing a definitive view on whether a duty to mitigate under the
Convention
applies to Soleas action.

Mitigation

[28]

Although the motion judge did not make specific
    findings on the issue of mitigation, some of her other factual findings bear
    directly on the issue. As well, the written record enables this court to make any
    necessary additional findings on the issue:
Courts of Justice
Act,
    R.S.O. 1990, c. C.43, ss. 134(1) and (4). Taking BWIs case at its highest by
    assuming (without deciding) that Solea was subject to a duty to mitigate, as I
    will now explain Solea satisfied any such duty.

[29]

BWI argues that Solea failed to establish that
    it took reasonable measures to mitigate its loss. Having returned the shrimp to
    Solea, BWI contends that Solea either resold, could have resold, or should have
    resold the shrimp. As a result, BWI submits that Soleas damages are zero.

[30]

The motion judge found that BWI breached the
    contract by failing to pay the purchase price. Her reasons disclose that she
    found title had passed to BWI upon delivery of the goods at the Mexican port
    and BWIs subsequent problems clearing the goods did not alter the fact that title
    had passed to it. The motion judge reviewed the evidence about the discussions
    between the parties in mid to late August, 2014 following BWIs disclosure that
    it had encountered import problems. She found that:

·

Solea did not make any representation, promise
    or agreement that it would not require BWI to pay the purchase price if the
    product was returned to Ecuador;

·

The arrangement to return the goods to Ecuador
    was not a new transaction in which title to the shrimp was recoveyed to Solea;
    and

·

The bill of lading for the shipment to Ecuador
    named Castromar, the original supplier, as consignee, which led the trial judge
    to find that there was no evidence that title to the shrimp had passed from BWI
    to Solea.

[31]

Those findings of fact take this case out of the
    common situation where at the time of the buyers breach of contract, the
    seller still had title to or possession of the goods that are the subject of the
    contract. On the motion judges findings, when BWI breached the contract in
    August 2014 by refusing to pay the invoice, it had title to and possession of
    the goods, circumstances that limited the reasonable measures Solea could take
    to mitigate its losses caused by BWIs breach.

[32]

The record contains other evidence concerning the
    mitigation issue. An email exchange between the parties on August 13, 2014
    discloses that Solea offered to take the goods back but only if BWI covered
    Soleas related costs, which it estimated to be in the range of
    US$25,000-30,000.  BWI refused.

[33]

Although Solea provided some assistance to BWI
    to arrange the return of the two containers of shrimp to Ecuador, the consignee
    named on the bill of lading for the return shipment was Castromar, the original
    vendor of the shrimp to Solea. The containers containing the shrimp arrived
    back in Ecuador on September 21, 2014 and were returned, empty, to the shipping
    company on October 1, 2014.  Soleas managing director, Adriaan de Leeuw,
    deposed that Solea never received the returned shrimp, never sold the shrimp,
    and was not aware what Castromar did with the shrimp. He also deposed that
    Solea was never aware of or involved in any sale of the shrimp to China, as
    suggested in some email correspondence, or otherwise once the shrimp was
    returned to Ecuador.

[34]

Further, in its commentary on damages in Arts.
    74-77, the Digest notes that some cases have interpreted the article to require
    that the breaching party claiming a reduction in damages under Art. 77, will
    bear the burden of establishing his entitlement to  a reduction in damages;
    see also,
CISG Commentary
, at p. 1036. In this regard, Art. 77
    reflects the common law principle that while it is up to the plaintiff to
    establish what it has lost from the defendants breach of contract, it is up to
    the defendant to show that the plaintiff could have avoided some, or perhaps
    all, of these losses: Angela Swan and Jakub Adamski,
Canadian Contract Law,
3rd ed (Toronto: LexisNexis, 2012), at
§
6.275. Given that onus on BWI, it is significant that it did not
    adduce any evidence about what Solea likely would have fetched on a resale of
    the goods at the material time.

[35]

The findings of fact of the motion judge, taken
    together with the evidence set out in paras. 32 and 33, support the conclusion that
    even if Solea was subject to a duty to mitigate under the
Convention
,
    it took such measures as were reasonable in the circumstances to mitigate its loss,
    including loss of profit, resulting from BWIs breach of contract.
    Notwithstanding those measures, its loss resulting from BWIs breach of the
    contract remains the amount found by the motion judge  U.S. $228,604.50.
    Consequently, I would not give effect to this ground of appeal.

V.      PREJUDGMENT
    INTEREST

[36]

The motion judge found that Solea was entitled
    to interest on the amount owing at the rate of 8% per annum. She reached that
    conclusion based on an interest clause found on the reverse side of Soleas
    invoice and the absence of contradictory evidence or submissions made by BWI
    on this issue.

[37]

BWI argues that it did make submissions on this
    issue before the motion judge. Specifically, BWI contends that the General Terms
    of Sale on the reverse side of the invoice that Solea provided after the
    parties had entered into the sales confirmation did not afford a contractual
    basis for prejudgment interest at the rate of 8%. According to BWI, to apply
    the interest clause in the invoice would amount to a variation of the
    contractual terms to which BWI had not consented. In BWIs submission, the pre-judgment
    rate of interest under the
Courts of Justice Act
should apply.

[38]

I am not persuaded by this submission.

[39]

While the May 12, 2014 Solea sales confirmation
    did not refer to interest payable on the amount billed, there was no dispute
    that the commercial practice for this type of international food commodity
    transaction first involved the formation of a sale contract, followed by the
    approval of other documentation required to perform the transaction. An email
    exchange between the parties on May 14, 2014 confirmed that one required document
    was a commercial invoice.

[40]

On May 31, 2014 Solea sent to BWI by email a
    package of documents, which included an invoice of the same date. Term 11 of
    the General Terms of Sale on the back page of the invoice stipulated a
    minimum rate of interest of 8% on any amount unpaid on the due date, with
    interest otherwise calculated at a rate of 2% on top of the current Euribor
    rate.

[41]

Although Solea sent BWI a package of original
    documents in the middle of June, Solea advised in a June 23, 2014 email that it
    still had the original invoice. Solea inquired whether BWI required the
    original invoice. On June 23, 2014 BWI emailed Solea that it thought it could
    process the invoice by using a copy of it.

[42]

On this appeal, BWI acknowledged receiving the
    front page of the invoice. However, BWI took the position that there was no
    evidence that it had acknowledged receiving the General Terms of Sale on the
    reverse side of the invoice.

[43]

I see no merit in this factual submission.

[44]

First, BWIs affiant, Jose Barajas Andrade,
    swore two affidavits for the motions. In neither affidavit did he take the
    position that BWI was not aware of the General Terms of Sale on the reverse of
    the invoice.

[45]

Second, by June 23, 2014 BWI had confirmed that
    it had received a copy of the invoice, would proceed on the basis of the copy,
    and had approved the acceptability of the invoice as a transaction document.
    The front page of the invoice contained the following language: General Terms
    of Sale: see reverse side. Given the clear disclosure that the invoice
    contained additional terms, BWIs approval of the acceptability of a copy of
    the invoice bearing that language operated to incorporate those terms into the
    contract of sale.

[46]

Accordingly, I see no error in the motion
    judges holding that the appropriate rate of prejudgment interest was the
    contractual rate of 8%. I would not give effect to this ground of appeal.

VI.     DISPOSITION

[47]

For the reasons set out above, I would dismiss
    the appeal.

[48]

Solea is entitled to its costs of the appeal
    fixed in the amount of $8,500, including disbursements and applicable taxes.

Released: KF JUL 25 2019

David Brown J.A.

I agree. K. Feldman
    J.A.

I agree. C.W. Hourigan
    J.A.

[1]

Cost, Insurance and Freight (CIF) means that the seller
    delivers the goods on board the vessel. The risk of loss of or damage to the
    goods passes when the goods are on board the vessel. The seller must contract
    for and pay the costs and freight necessary to bring the goods to the name port
    of destination. The seller also contracts for insurance cover against the
    buyers risk of loss of or damage to the goods during the carriage. When CIF is
    used, the seller fulfills its obligation to deliver when it hands the goods
    over to the carrier in the manner specified in the chosen rule and not when the
    goods reach the place of destination: Incoterms 2010: ICC rules for the use of
    domestic and international trade terms (Paris: International Chamber of
    Commerce, 2010), at p. 105.

[2]

The new title, the
International Sales Convention Act
,
    came into effect on March 22, 2017, upon royal assent.


COURT OF APPEAL FOR ONTARIO

CITATION: Stegenga v. Economical Mutual Insurance Company,
2019 ONCA 615

DATE: 20190719

DOCKET: C65180

Brown, Roberts and Zarnett JJ.A.

BETWEEN

Morgan Stegenga

Plaintiff
(Appellant)

and

Economical Mutual Insurance Company

Defendant
(Respondent)

J. Patrick Brown and Michael Warfe, for the appellant

Lisa Armstrong, Julianne Brimfield and Mark A. Gelowitz,
for the respondent

Heard: April 26, 2019

On appeal from the judgment of Justice James A. Ramsay of
the Superior Court of Justice, dated March 6, 2018, with reasons reported at
2018 ONSC 1512.

Zarnett J.A.:

[1]

The Statutory Accident Benefits
(SABs)
dispute resolution provisions of s. 280 of the
Insurance
Act
, R.S.O. 1990, c.
I. 8, which came into force
on April 1, 2016, give the Licence Appeal Tribunal (LAT) jurisdiction to
resolve certain disputes and prohibit bringing proceedings in respect of those disputes
in court.
[1]
This appeal raises the question of whether claims for an insurers bad faith
conduct fall outside of those provisions.
[2]

[2]

The appellant, Morgan Stegenga, was seriously injured in a motor
vehicle accident. She claimed SABs from her insurer, the respondent Economical
Mutual Insurance Company. In light of the way Economical Mutual handled her claim,
she brought an action against it alleging bad faith and claiming punitive and
exemplary damages, among other things.

[3]

Economical Mutual successfully moved to
strike out
Ms. Stegengas statement of claim and obtained a determination, as a matter of
law, that the LAT has exclusive jurisdiction to decide Ms. Stegengas claim at
first instance.

[4]

The motion judge held that Ms. Stegengas claim fell
within the SABs dispute resolution provisions because it was in respect of an
insured persons entitlement to statutory accident benefits or in respect of
the amount of statutory accident benefits to which an insured person is
entitled: s. 280(1). It was therefore a claim over which the LAT has exclusive
jurisdiction and one which may not be brought in court: ss. 280(2), (3). In the
motion judges view, both s. 280 of the Act and this courts decisions under
the prior version of the Acts dispute resolution provisions required that
conclusion, even though Ms. Stegengas lawsuit asserted and sought damages
for bad faith stemming from Economical Mutuals administration of her SABs
claim.

[5]

Ms. Stegenga appeals. She argues that this is
the first case to consider whether an action for bad faith administration of a
SABs claim comes within the current s. 280, amended since the cases the motion
judge relied on were decided. She argues that the principles of statutory
interpretation, case law that has emphasized the standalone nature of a cause
of action for bad faith, the nature of the relief claimed, and sensible policy
considerations, all lead to the conclusion that s. 280 does not apply.

[6]

For the following reasons, I conclude that s.
280 does apply. Interpreted in light of the principles of statutory
interpretation, s. 280 grants the LAT jurisdiction over Ms. Stegengas claim,
and prohibits the claim from proceeding as an action in court, notwithstanding
that the action alleges bad faith and the remedies the LAT can grant are
different from those a court could. This result is a consequence of the policy
choice the legislature made in enacting s. 280. I would therefore dismiss the
appeal.

The Facts

[7]

Economical Mutual brought its motion under Rule
21.01(1)(a) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.

On such a motion, the facts alleged in Ms. Stegengas statement of
claim are taken to be true. The facts set out below come from that statement of
claim.

[8]

In November 2011, when she was fifteen years
old, Ms. Stegenga was a passenger in a motor vehicle that was involved in a
serious collision. She suffered significant injuries, including a head injury with
a Glasgow Coma Scale (GCS) score of 6, necessitating a period of intubation
and treatment in a Pediatric Critical Care Unit. She also suffered multiple rib
fractures, pulmonary contusions, fractures to her right clavicle, scapula and
pelvic rami, as well as other injuries. These injuries were accompanied by,
among other things: a loss of cognitive ability; personality, behaviour and psychological
changes; and anxiety, depression and chronic pain. As a result, Ms. Stegenga
experienced a decline in her academic performance. She has struggled to
maintain her grades, focus on school work and complete assignments.

[9]

Ms. Stegenga was insured by Economical Mutual under
an automobile insurance policy it issued to her father.

[10]

In January 2012, Ms. Stegengas mother applied
on her behalf to the respondent for SABs. Pertinent medical information was provided
by Ms. Stegengas pediatrician.

[11]

For a period of about three years, Economical
Mutual did not advise Ms. Stegenga or her parents that her injuries could
qualify as a catastrophic impairment or inform them of the benefits that could
be available for such an impairment. Economical Mutual also did not:

·

provide them with the application form required
to make a determination about catastrophic impairment;

·

take steps to interview Ms. Stegenga or her
parents regarding the nature and extent of her injuries or their effect on her
daily life;

·

arrange to have her assessed by a health
practitioner;

·

assign a case manager to assist with her care
and rehabilitation, or advise her that she was entitled to a case manager;

·

obtain her hospital and clinical records for
over two years, or respond appropriately to such records when eventually provided
to them;

·

respond to requests to authorize a neurologic
psychoeducational assessment; and,

·

provide accurate Benefit Statements to Ms.
Stegenga and her parents (those provided misrepresented both the nature of her injuries
as non-catastrophic and the applicable policy limits available to her).

[12]

In February 2015, Economical Mutual advised that
based on Ms. Stegengas GCS score, it now accepted that she had suffered a
catastrophic impairment as a result of the collision. However, over the next
year, Economical Mutual continued to provide Benefit Statements that described
her injuries as non-catastrophic.

[13]

Ms. Stegenga alleges that Economical Mutual breached
the duties it owed to her because it acted wilfully and negligently in breach
of its contract with her and in breach of its duty of good faith. The claim
recites 56 particulars of Economical Mutuals alleged breaches, which may be
grouped into several categories:

·

failing to inform Ms. Stegenga and her family of her rights and entitlements
to benefits under the
Statutory Accident Benefits Schedule

Effective September 1, 2010, O. Reg 34/10 (the SABs Schedule);

·

while it knew or ought to have known that Ms. Stegenga suffered a
catastrophic injury, failing to ensure she had the proper information, forms, examinations,
assessments, treatment, care, and a case manager;

·

failing to take steps to investigate Ms. Stegengas medical
condition and her entitlement to benefits, and not properly considering
information provided to it on those topics;

·

preventing Ms. Stegenga from accessing benefits and withholding,
delaying or denying benefits based on inaccurate and irrelevant considerations;

·

sending Ms. Stegenga and her family confusing, misleading and
contradictory correspondence about her entitlement to benefits, misrepresenting
her benefits, withholding information and failing to make disclosure, knowing
that Ms. Stegenga would not receive the treatment, care and benefits she
required and to which she was entitled; and,

·

failing to follow reasonable standards for the handling of Ms. Stegengas
claim for benefits.

[14]

As noted, t
he statement of claim refers to Ms.
Stegengas entitlement to SABs and to the fact that SABs were not, or were
inadequately, provided. It states that, because of Economical Mutuals conduct,
and reliance on its misleading representations, she did not receive the care,
treatment, and benefits to which she was entitled and should have received. Ms.
Stegenga also
pleads that although
she provided all forms, information and medical documentation requested by Economical
Mutual, Economical Mutual did not provide the benefits to which [Ms. Stegenga]
was legally entitled.

[15]

The statement of claim alleges that Economical
Mutuals conduct prolonged Ms. Stegengas suffering, and caused new
difficulties and impairments she would not otherwise have experienced, as well
as emotional, psychological and financial distress. Damages, including punitive,
aggravated and exemplary damages, are claimed.

The Motion Judges Decision

[16]

Economical Mutual moved under r. 21 to strike
the statement of claim, seeking the determination of a question of law: whether
the appellants claim is barred by ss. 280(1) and (3) of the
Insurance
Act
. The motion judge defined the question as whether a
claim for negligent, fraudulent or bad faith administration of accident
benefits is a claim falling within s. 280(1), that is,

whether it is a dispute in respect of an insured persons entitlement
to statutory accident benefits or in respect of the amount of statutory
accident benefits to which an insured person is entitled
.

[17]

The motion judge reasoned that the words in
respect of in s. 280(1) import a connection in a very broad sense. He
considered the dispute resolution provisions to be designed to provide a cost-efficient
and fair mechanism for resolving disputes between insurers and insureds in
respect of SABs, by mandating that disputes be heard at first instance by the
LAT. To determine whether the dispute fell within the LATs jurisdiction and therefore
outside that of the courts, the motion judge instructed himself to look to the
facts giving rise to the dispute rather than the legal characterization of the
wrong, citing
Weber v. Ontario Hydro
,

[1995] 2 S.C.R. 929, at para.
49. He cited this courts decision in
Arsenault v. Dumfries Mutual
Insurance Co.
(2002),

57 O.R. (3d) 625 (C.A.), which was decided under the dispute
resolution provisions of the Act before the 2016 amendments, as standing for the
proposition that those provisions apply if a refusal of accident benefits is an
essential part of a claim, regardless of whether bad faith in administering a
claim may be an independent tort in the context of accident benefits. He
concluded that s. 280 is intended to deprive a claimant of resort to the court
at first instance whenever the claim is based on denial of accident benefits,
no matter how the denial is characterized in legal terms.

The Appellants Position

[18]

Although the statement of claim seeks damages for breach of
contract, negligence, misrepresentation and infliction of mental distress, Ms. Stegengas
argument on appeal focuses on her action as one for bad faith relating to the administration
of her SABs claim. She argues that an insurers duty of good faith is
independent of and in addition to its duty to pay the benefits to which an
insured person is entitled, a point she argues follows from the Supreme Courts
decision in
Whiten v. Pilot Insurance Co.
, 2002
SCC 18, [2002] 1 S.C.R. 595, at para. 79. A breach of the duty of good faith
gives rise to a standalone action for bad faith in which aggravated, exemplary
and punitive damages are available.

[19]

Ms.
Stegenga
submits that nothing in the
Insurance Act
deprives the Superior Court of jurisdiction to deal with such a
claim or confers jurisdiction on the LAT to do so, for interrelated reasons. Her
standalone bad faith claim is not for benefits entitlement, and the LAT cannot
award aggravated, exemplary or punitive damages. The cases by which the motion
judge considered himself bound, including
Arsenault,
are distinguishable because they did not involve true bad faith
claims: they were claims for indemnity under the insurance contract and dealt
with entitlement issues. The motion judges conclusion that the LAT has
exclusive jurisdiction over Ms. Stegengas claim effectively insulates insurers
from claims involving a breach of their duty of good faith in relation to
claims for SABs, a result she contends should be avoided.

Analysis

[20]

This appeal requires me to consider three issues:

1.

What is the breadth of the SABs dispute resolution provisions in the
Insurance Act
that prohibit recourse to the court and empower the LAT
to resolve disputes?

2.

Does a bad faith claim against an insurer, seeking relief such as
punitive damages, fall outside the scope of the dispute resolution provisions?

3.

What effect do the conclusions under issues 1 and 2 have on Ms. Stegengas
claim?

[21]

As I explain, the SABs dispute resolution provisions
capture a broad range of disputes, including disputes about how an insurer
handled a SABs claim. The purpose of the provisions, the expansive language
used and the extent of the powers given to the LAT all support this
interpretation.

[22]

Neither the legal characterization of the cause
of action asserted against the insurer nor the relief claimed determines
whether a claim falls within the scope of the dispute resolution provisions. If
the dispute relates to the insurers compliance with obligations to the insured
concerning SABs, the timeliness of performance of those obligations and/or the
manner in which they were administered, it falls within the broad reach of the
dispute resolution provisions, and within the jurisdiction of the LAT. The
prohibition on court proceedings will apply.

[23]

In this case, these conclusions apply to bar Ms.
Stegengas action.

The Statutory Scheme

[24]

Subsection 280
(1) of
the
Insurance Act

describes the disputes to which the dispute resolution process it
mandates applies. It provides:

This section applies with respect to
the resolution of disputes in respect of an insured persons entitlement to
statutory accident benefits or in respect of the amount of statutory accident
benefits to which an insured person is entitled.

[25]

Subsection 280(2) goes on to confer jurisdiction on the LAT to resolve the
disputes described in s. 280(1):

(2) The insured person or the insurer
may apply to the Licence Appeal Tribunal to resolve a dispute described in
subsection (1).

[26]

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 s. 280(1), that is, a dispute that falls within the
jurisdiction of the LAT:

(3) No person may bring a proceeding in
any court with respect to a dispute described in subsection (1), other than an
appeal from a decision of the Licence Appeal Tribunal or an application for
judicial review.

[27]

Further guidance on what falls within the jurisdiction of the LAT and
therefore outside that of the court at first instance is contained in the
balance of s. 280 and the relevant regulations.

[28]

Subsection 280(4) provides that a dispute shall be resolved in
accordance with the SABs Schedule. Subsections (5) and (6) provide that the powers
of the LAT and the orders it may make may be provided for by regulation, and
may include the power to make orders to pay amounts even if those amounts are
not costs or amounts to which a party is entitled under the [SABs Schedule]: s.
280(6)2.

[29]

Both the SABs Schedule and the regulations envisaged by the Act contemplate
the LAT making determinations about how an insurer has handled a claim and granting
relief beyond the payment of SABs when payments have been unreasonably
withheld or delayed. Section 3(8) of the SABs Schedule provides:

If in a dispute described in subsection
280 (1) of the Act, the Licence Appeal Tribunal finds that an expense was not
incurred
because the insurer unreasonably withheld
or delayed payment of a benefit in respect of an expense
,
the Licence Appeal Tribunal may, for the purpose of determining an insured
persons entitlement to the benefit, deem the expense to have been incurred.
[Emphasis added.]

[30]

And section 10 of
Automobile Insurance
, R.R.O.
1990, Reg. 664, provides:

If the Licence Appeal Tribunal
finds that an insurer has unreasonably withheld or delayed payments
, the Licence Appeal Tribunal, in addition to awarding the benefits and
interest to which an insured person is entitled under the Statutory Accident
Benefits Schedule,
may award a lump sum of up to
50 per cent of the amount to which the person was entitled at the time of the
award
together with interest on all amounts then owing to
the insured (including unpaid interest) at the rate of 2 per cent per month,
compounded monthly, from the time the benefits first became payable under the
Schedule. [Emphasis added.]

Issue 1: The Broad Scope of the SABs Dispute Resolution
Provisions

[31]

The breadth of s. 280 of the
Insurance

Act
is a question of statutory interpretation
.
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:
Belwood Lake
Cottagers Association Inc. v. Ontario (Environment and Climate Change)
,
2019 ONCA 70, at para. 39, citing
Montréal
(City) v. 2952-1366 Québec Inc.
, 2005 SCC 62, [2005] 3
S.C.R. 141, at paras. 9-12, and
Rizzo & Rizzo Shoes Ltd. (Re)
,
[1998] 1 S.C.R. 27, at
para. 21. Reading a statutory provision in its entire context requires the
court to consider the history of the provision and its place in the overall
scheme of the act, among other things:
Belwood
,
at para. 41.

[32]

More specific principles of interpretation apply in some cases. Ms.
Stegenga argues that as the Superior Court is a court of general jurisdiction,
it has jurisdiction over all matters of substantive law in civil claims unless
that jurisdiction is taken away by clear and unequivocal legislative language
:
TeleZone Inc. v. Attorney General (Canada)
, 2008 ONCA 892, affd 2010 SCC 62, [2010] 3 S.C.R. 585, at paras. 3,
6.

[33]

It is conceded that the
Act
does, by clear and unequivocal language, take away some jurisdiction
from the court and confer it on the LAT. The Acts express directions that [n]o
person may bring a proceeding in any court with respect to a dispute (s. 280(3))
and that [t]he insured person or the insurer may apply to the [LAT] to resolve
a dispute (s. 280(2)) leave no doubt about that. The issue is the breadth of
the subject matter carved out of the courts jurisdiction and given to the LAT to
resolve.

[34]

Ms. Stegenga essentially argues that the words disputes in respect of
an insured persons entitlement to statutory accident benefitsor in respect of
the amount of statutory accident benefits to which an insured person is
entitled only capture disputes about whether or not a benefit should be paid,
that is, claims for a benefit itself, or disputes about whether a benefit was paid
in an incorrect amount, that is, claims for the further amount that should be
paid or for the excess amount that should not have been paid. She argues that the
legislature used the terms entitlement and amount to limit the scope of s.
280(1). Had the legislature drafted the provision to cover any dispute in
respect of statutory accident benefits, for example, its reach would be
broader.

[35]

In my view this argument reads the section too narrowly. Several indicators
of legislative meaning, which I outline below, lead to the conclusion that a
dispute in respect of an insured persons entitlement to SABs or the amount of an
insured persons SABs entitlement embraces more than a claim for the payment of
a benefit not paid or paid in an incorrect amount, and extends to the way the
claim was handled.

(i)

Legislative Purpose

[36]

The current version of s. 280 of the
Act
came into force on
April 1, 2016. The previous version provided for mandatory mediation of disputes
in respect of any entitlement to or the amount of an entitlement to SABs, and
gave an insured person an option of then proceeding to court or arbitration for
the resolution of such a dispute if mediation failed, but within a two-year
limitation period:
Insurance Act
, R.S.O. 1990,
c.
I.8
, ss. 279-283 as they appeared on March 31, 2016.
[3]

[37]

The pre-April 2016 provisions were described as a mandatory scheme
and complete code for
dealing with disputes between an insured person
and an insurer concerning SABs issues (emphasis omitted)
:
Ayr
Farmers Mutual Insurance Company v. Wright
,
2016 ONCA 789, at paras. 4, 16, 34. The amendments
enacted in April 2016  giving the LAT jurisdiction (subject to appeal or
judicial review) over the same disputes that were previously subject to
mandatory mediation, and prohibiting proceedings in court  do not detract from
the legislatures intention that the provisions continue to constitute a
complete code for the resolution of disputes in respect of an insured persons
entitlement to SABs or in respect of the amount of SABs to which an insured
person is entitled.

[38]

The purpose of the amendments that led to the current s. 280 has been
described as reducing both insurance rates and insurance fraud, and speeding up
dispute resolution, in large part by providing an efficient, fair and
accessible mechanism for resolving disputes: Fighting Fraud and Reducing
Automobile Insurance Rates Act, 2014, 1st reading, Ontario, Legislative
Assembly,
Official Report of Debates (Hansard)
,
41st Parl., 1st Sess., No. 8 (15 July 2014) at 1510 (Hon. Charles Sousa); see
also 2014 Ontario Automobile Insurance Dispute Resolution System Review,
Final
Report
, by The Hon. J. Douglas Cunningham (Toronto: 25
February 2014) at pp. 2-3, 13, 31-33, the report that formed the basis for the
amendments to the dispute resolution provisions. The amendments removing
disputes from the courts and empowering the LAT to deal with them are among the
cornerstones of the legislation passed to effect the above purpose
: Hon.
Charles Sousa, at 1510
.

[39]

The purpose of the current s. 280 has two important implications.
First, the purpose of reducing insurance rates by providing for efficient dispute
resolution through the LAT would not be served by an overly restrictive reading
of the LATs jurisdiction and the corresponding limit on the courts jurisdiction.
The legislature must be taken to have considered the importance of its
objectives of efficiency and cost reduction to outweigh the loss of insured
individuals access to the courts and to the full range of remedies available
there.

[40]

Second, while the legislatures intention that the dispute resolution
provisions continue to be a complete code does not, on its own, determine which
disputes fall within it, it does suggest that the legislature did not intend the
same, similar, or overlapping issues to be adjudicated in more than one forum.

(ii)

The Use of Expansive Language in s. 280(1)

[41]

The entry point to the SABs dispute resolution provisions is s.
280(1), which contains expansive language.

[42]

As the motion judge correctly noted, the phrase in respect of connotes
the broadest possible connection between two subject matters:

Arsenault
, at para. 16, citing
Nowegijick
v. The Queen
, [1983] 1 S.C.R. 29, at p. 39. In s. 280(1),
that phrase connects dispute to entitlement to statutory accident benefits
or their amount.

[43]

The ordinary meaning of the noun dispute is broad. It has been
described as a conflict or controversy, a disagreement or argument and a
controversy; a debate:
Blacks Law Dictionary
, 11th
ed.;
Concise Oxford English Dictionary
, 12th ed;
Canadian
Oxford Dictionary
, 2d ed
.

[44]

Entitlement is a term
of wide meaning, referring to a right to do or receive something:
Concise
Oxford English Dictionary
, 12th ed.
It embraces
the content of the insureds right to receive SABs (i.e. what SABs an insured
person has a right to receive), when they have a right to receive those SABs, and
the manner of performance by the insurer they have a right to receive.

[45]

Taken together, the words of s. 280(1) cover a wide array of
disagreements connected in some way to the SABs to which an insured person was
or is entitled. Viewed in the context of the purpose and history of the dispute
resolution provisions, those words include disagreements about when the insurers
obligation to provide SABs should be or should have been performed, and how the
obligation to provide them should be or should have been performed.

(iii)

The LATs Jurisdiction

[46]

The balance of s. 280 informs the proper interpretation of the s.
280(1) reference to disputes in respect of entitlement to SABs or their amount.
These provisions elaborate on the jurisdiction given to the LAT, and therefore
on what falls within s. 280(1). The jurisdiction given to the LAT over those
disputes is co-extensive with that removed from the court: ss. 280(2), (3).

[47]

The jurisdiction given to the LAT includes making determinations about
the manner in which an insurer has administered a claim for SABs. Subsection
280(4) states that the LAT shall resolve disputes in accordance with the SABs
Schedule. The SABs Schedule gives the LAT the power, for the purpose of making
an award of benefits, to deem an expense to have been incurred if that expense
was not incurred because an insurer unreasonably withheld or delayed payment of
benefits in respect of the expense: s. 3(8). Determining whether a benefit was
unreasonably withheld or delayed necessarily involves determining both what
benefits were due and when, and whether the insurers conduct that led to it
not providing the benefit or providing it later than it should have was
unreasonable.

[48]

Similarly, ss. 280(5) and (6) of the Act contemplate the LAT exercising
power under other regulations. Subsection 280(6)2 allows the regulations to authorize
the LAT to award amounts beyond those for which the SABs Schedule provides. The
regulations in turn allow the LAT to make, in addition to an award of the
benefits and interest to which the insured is entitled under the SABs Schedule,
an award (known as a special award) of up to 50 percent of the benefits to
which the insured is otherwise entitled, and interest at a higher rate, if it
finds the insurer unreasonably withheld or delayed the payment of benefits:
Automobile
Insurance
, s. 10. The LATs powers contemplate an enquiry
into and determination of what and when benefits should have been paid, and
into whether any delay or failure to pay was reasonable, that is, into the
manner in which the insurer has dealt with the claim and performed its SABs-related
obligations.

[49]

The LATs jurisprudence shows that it enters into such enquiries and
makes such determinations. In
17-006757 v. Aviva Insurance Canada
, 2018 CanLII 81949 (Ont. L.A.T.), the LAT found the insurer to have
unreasonably delayed payment of benefits: at para. 32. In making a special award,
the LAT considered the insureds entitlement to the benefits claimed, the
insurers delay in approving payments without apparent explanation, its near
total disregard of the correspondence from the insureds legal representatives
and medical practitioners, its failure to reassess the claim when new
information became available, its ignoring the claim for a period of time and its
imprudent, stubborn, inflexible and unyielding stance with respect to the benefits
claimed: at paras. 36-37.

[50]

This is consistent with the approach taken to special awards under the prior
version of the Act. Jurisdiction to make a special award was vested in an
arbitrator of the Financial Services Commission of Ontario:
Insurance
Act
, R.S.O. 1990, c.
I.8
, s. 282(10)
as it appeared on March 31, 2016
. The operative language
permitting such an award was nearly identical to the regulation now empowering
the LAT to do so; that is, it required the insurer to have unreasonably withheld
or delayed the payment of benefits. The approach to making special awards under
the prior version of the Act required the arbitrator to determine the benefits
owing to the insured person, and whether the insurer unreasonably withheld or
delayed payments. Factors relevant to fixing the amount of a special award
included the amount of benefits unreasonably withheld or delayed, the length of
the delay and any failure to respect procedural and other protections for the
insured. Bad faith was not required but was relevant if shown, as was the
vulnerability of the insured if known to the insurer:
Personal
Insurance Company v. Hoang
,

2014 ONSC 81 (Div. Ct.), at

paras. 64-65.

(iv)

Differences in Remedial Powers Do Not Affect the
Result

[51]

The appellant points out that the remedies the LAT can grant, such as a
special award, are different from what a court may award. For example, even if
the LAT finds a delay or withholding of benefits that was unreasonable, and in
making that determination finds conduct that would at common law amount to bad
faith, it could not grant consequential or punitive damages as a court might.
[4]
The appellant submits that finding
that s. 280 bars Ms. Stegengas claim effectively insulates insurers from claims
involving the breach of the duty of good faith in the SABs context, and from the
punitive and deterrent effect of the courts remedial powers.

[52]

In my view this remedial difference does not bear on the issue of what
types of disputes are captured by the grant of authority to the LAT and the
parallel prohibition on court proceedings. The legislature made a choice as to
what disputes would be within the exclusive jurisdiction of the LAT, and what
remedial powers the LAT would have. That was a policy choice it was entitled to
make. The
Insurance Act

and its regulations form a
comprehensive scheme for the regulation of insurers and insurance. The legislature
must be taken to have armed the LAT with the remedial powers it considered
appropriate to deal with improper insurer behaviour, knowing those remedial
powers were different from the courts.

(v)

Conclusion on the Meaning of the Dispute Resolution
Provisions

[53]

Disagreements between an insurer and insured about the SABs the insured
should receive, their amount, the timeliness of their provision, and the
conduct and process of the insurer in providing them (that is, the handling or
administration of the claim) constitute disputes in respect of the insured
persons entitlement to SABs or their amount.
Put in terms
applicable here, an insured person could properly be said to have a dispute falling
within s. 280(1) if a benefit the insured considers ought to have been paid or
provided was not, or if it was paid or provided but only well after the insured
considers it should have been because of what the insured considers to have
been the insurers inappropriate handling of the claim.
These
are matters the legislature has empowered the LAT to decide, and has taken away
from the court.

Issue 2: A Bad Faith Claim Does Not Automatically Fall
Outside the Reach of s. 280

[54]

The appellant argues that since bad faith is a standalone cause of
action, her claim falls beyond the reach of s. 280. I agree that bad faith can
be characterized as a cause of action which is available to a person insured by
an insurance contract but is independent of and distinct from a claim for
payment or indemnity under the insurance contract. However, it does not follow
that this automatically takes the subject matter of a claim, even when
characterized as one for bad faith, outside of s. 280.

[55]

The following descriptions of the nature of an action for bad faith
(all from cases that do not deal with SABs) are useful to analyse the appellants
submission:

a)

An insurer is under a duty of good faith and fair dealing. A breach of
the duty of good faith is independent of and in addition to the breach of a
contractual duty to pay the insureds loss. It is an actionable wrong, which
can support a claim for punitive damages
:
Whiten
, at paras. 79.

b)

A breach of the duty to act fairly and in good faith gives rise to a
separate cause of action that is distinct from the cause of action founded on
the express terms of the policy and that is not restricted by the limits in the
policy. Hence it may result in an award of consequential damages distinct from
the proceeds payable under the policy
:
Ferme Gérald Laplante & Fils Ltée v. Grenville Patron Mutual Fire Insurance
Co.
(2002)
, 61
O.R. (3d) 481 (C.A.), at para. 78.

c)

Statutory conditions in an insurance contract imposing limitation
periods for a claim under [this] contract or an action under this contractin
respect of the loss or damage to person or property do not apply to a bad
faith claim. A bad faith claim is not a claim for indemnity under the contract
:
Dundas v. Zurich Canada,
2012 ONCA 181, 109 O.R. (3d) 521, at
paras. 46-49.

[56]

In my view the nature of a bad faith cause of action does not
automatically take a claim so denominated outside the reach of s. 280. Section
280 is not limited to claims for breach of a contractual duty to pay SABs, nor
to claims
under

an insurance
contract. As explained above, s. 280 also embraces disputes about the manner in
which a claim was handled or administered.

[57]

Alleging bad faith did not automatically take a claim out of the ambit
of the pre-April 2016 SABs dispute resolution provisions. In
Arsenault
, Abella J.A. (as she then was) held that a claim alleging bad faith in
the termination of benefits was still subject to the limitation period in
former s. 281(5), for two reasons. First, assuming that bad faith could form an
independent basis for a claim (as was subsequently confirmed in
Whiten
), Abella J.A. reasoned that the claim fell within the subject matter
of the SABs dispute resolution code in the
Act
, including its limitation period, because
the claim required a determination as to whether the insurers termination of
benefits was improper:
Arsenault
, at para. 18.
Second, looking at the substance of the claim, rather than its pleaded legal characterization,
Abella J.A. also reasoned that the claim was for a determination that the
insurer ought not to have terminated benefits when it did. On that basis it
also fell with the dispute resolution code: at para. 19.

[58]

This court reached a similar result in
Mader v. South
Easthope Mutual Insurance Company
, 2014 ONCA 714, 123 O.R.
(3d) 120. The insured in that case framed her claims for income replacement
benefits and damages as flowing not only from a breach of contract, but also from
a breach of the duty of good faith and a conspiracy, and argued that the latter
claims were not subject to the mandatory mediation requirement in the previous
s. 281(2) of the Act. However, Hourigan J.A. concluded that the claim still fell
within the Acts previous dispute resolution code, because [t]he claims
asserted by the appellant all flow from the denial of benefits and essentially
amount to nothing more than a claim that the appellant was wrongly denied
benefits to which she believes that she is entitled to receive: at para. 49.
This was precisely the type of claim contemplated for resolution by the Acts former
SABs dispute resolution procedure.

[59]

I do not accept Ms. Stegengas submission that the reasoning in these
cases is inconsistent with or displaced by the decision in
Dundas
.

The bad faith
claim in
Dundas

was not covered by the statutory
condition imposing a time limit on claims because the condition applied only to
claims
under
the policy.
[5]
As noted, s. 280 is not
similarly limited.

[60]

In my view the amendments to the Act following
Arsenault
and
Mader

do not affect their continued
applicability. The language considered in those cases, [d]isputes in respect
of any insured persons entitlement to statutory accident benefits or in
respect of the amount of statutory accident benefits to which an insured person
is entitled, remains virtually the same.
[6]
The legislature preserved that language in the face of the broad interpretation
the courts had given to it, of which the legislature is presumed to have been
aware:
ATCO Gas & Pipelines Ltd. v. Alberta (Energy &
Utilities Board)
, 2006 SCC 4, [2006] 1 S.C.R. 140, at para. 59;
Ruth Sullivan,
Sullivan on the Construction of Statutes
, 6th
ed. (Toronto: LexisNexis, 2014) at p. 205
. Only the consequences
of a dispute coming within that definition have changed. Court proceedings were
previously available following mandatory mediation, and within a certain
limitation period; now they are not. That consideration does not prevail over the
fact that the operative language remains the same.
Arsenault
and
Mader

continue to be applicable to
the current s. 280(1).

[61]

It is not the type of legal claim, whether bad faith or otherwise,
which determines whether s.280 applies. As I explain below, it is the nature
and subject matter of the dispute, assessed on the basis of the facts that give
rise to it, that are determinative.

Issue 3: Application to the Appellants Claim

[62]

The approach taken by the Supreme Court in
Weber v. Ontario
Hydro
,

[1995] 2 S.C.R. 929, applies
to determine
whether the Act has removed a dispute from the courts jurisdiction in favour
of the LATs jurisdiction. In
Weber
,
McLachlin J. (as she then was) held that
the
facts giving rise to a dispute, rather than the legal characterization of a
dispute, determined whether that dispute had been removed from the courts
jurisdiction by the mandatory arbitration clause in s. 45(1) of the former
Labour
Relations Act
,
R.S.O. 1990, c. L.2
: at
para. 49. If the legal characterization of the claim were determinative, clever
pleading could defeat the object of the legislatures prohibition on parallel court
proceedings: at para. 49.

[63]

As in
Weber
, the wording of the
Insurance
Act
removing jurisdiction from the court and conferring it
on the LAT indicates that the facts giving rise to the dispute determine which
forum has jurisdiction over the dispute. In
Weber
,
McLachlin J. noted that the mandatory arbitration provision in the
Labour
Relations Act

refers to all
differences
between the parties arising from the interpretation, application,
administration or alleged violation of the agreement: at para. 45. She
reasoned that the word differences denoted the
dispute
between the parties, rather than the type of legal claim one party might be
able to bring against another. The legislature intended to exclude all
proceedings arising from disputes of a certain character between the parties,
however those proceedings may be framed: at para. 45.
The same
reasoning applies here: s. 280 of the
Insurance Act

is not framed in terms of legal characterizations, but refers directly
to disputes.

[64]

At their core, the facts alleged in Ms. Stegengas statement of claim
are about the insurers failure to provide the benefits to which Ms. Stegenga
was entitled; the insurers delay in providing benefits, its withholding of
benefits, and the circumstances in which that occurred; and the insurers
conduct and process in handling the claim for benefits and dealing with Ms.
Stegenga and her family, all of which caused or contributed to Ms. Stegenga not
receiving the care, treatment, and benefits to which she was entitled and
should have received. These facts demonstrate that Ms. Stegengas action,
viewed with an eye to its essential character, is a dispute
in
respect of her entitlement to SABs and their amount:
Weber
, at para.
67.
It falls within s. 280.

[65]

Ms. Stegengas entitlement to benefits and the insurers non-provision
of benefits recurs as a theme in her pleading. If the court action were allowed
to proceed, the benefits to which Ms. Stegenga was entitled, their amount, and
when they ought to have been provided would have to be determined as a
predicate to determining whether the insurers withholding or delay in
providing benefits  its handling of the claim  gave rise to an actionable
wrong such as bad faith. Those same determinations would have to be made in
order to decide whether the insurer made actionable misleading statements. But
those predicate determinations are within the LATs jurisdiction. In intending
to enact a cost-effective and efficient dispute resolution scheme, the
legislature did not intend both the LAT and the court to determine the same
questions on the path to granting different relief.

[66]

It does not matter that the LAT would look at the facts through the
lens of unreasonableness, while a court would do so through the lens of bad
faith. It is not the legal characterization of the claim but the facts giving
rise to the dispute that are determinative.

[67]

The facts giving rise to Ms. Stegengas dispute with the insurer relate
to her entitlement to benefits or to the amount of her entitlement, as those
terms are used in s. 280(1): they are connected to the category of SABs to
which she was entitled, and to the proper amount of her entitlement, and they relate
to the insurers handling of the claim. Because these matters are covered by
the broad language in s. 280(1), they are within the LATs jurisdiction under
s. 280(2), and are thus within the ambit of the s. 280(3) prohibition on court
proceedings. The LAT is specifically empowered to grant relief for claims like
Ms. Stegengas; the court is barred from doing so.

Conclusion

[68]

In my view the motion judge reached the correct conclusion. Ms. Stegengas
action is barred by the dispute resolution provisions of the
Insurance
Act
. I would dismiss the appeal.

[69]

The respondent is entitled to the costs of the appeal in the sum of
$7500, inclusive of disbursements and applicable taxes.

Released: B.Z. July 19, 2019

B. Zarnett J.A.
I agree.
David Brown J.A.
I agree. L.B. Roberts J.A.

[1]

Appeals from or applications for judicial review of LAT
decisions can be brought in court: s. 280(3).

[2]
Whether claims for extracontractual damages such as punitive damages fall
outside of those provisions was the subject of some commentary shortly after
they came into force: see Philippa G. Samworth, AABS and SABS: The Evolving
World of Ontario Statutory Accident Benefits in 2016 (2017) 46 Advoc. Q.

[3]
The prior version of s. 280(1), defining the scope of the dispute resolution
provisions application, read as follows: Disputes in respect of any insured
persons entitlement to statutory accident benefits or in respect of the amount
of statutory accident benefits to which an insured person is entitled shall be
resolved in accordance with sections 280 to 283 and the
Statutory
Accident Benefits Schedule
:
Insurance Act
, R.S.O. 1990, c.
I.8
, s. 279(1) as it
appeared on March 31, 2016.

[4]

Prior to the 2016 amendments, a court hearing a SABs
entitlement dispute could also grant damages for mental distress to the SABs
claimant:
McQueen v. Echelon
General Insurance Company
, 2011 ONCA 649,
107
O.R. (3d) 780,
at paras. 19, 65, 75.

[5]
Ms. Stegenga relies on three other cases that are similarly distinguishable:
L'Espérance
v. Economical Mutual Insurance Group
, 2014 ONSC 6293;
Johnston v. Wawanesa Mutual Insurance Co.
,

2006 CarswellOnt
4528 (Sup. Ct.); and
St. Denis v. TD Insurance Home and Auto Liberty
Insurance Co. of Canada
(2005), 80 O.R. (3d) 706 (Sup. Ct.). They are not
SABs claims. Further, like
Dundas
, they involve limitation periods that
are only applicable to claims under or under or by virtue of the relevant
insurance policy:
L'Espérance
, at paras. 14, 25;
Johnston
, at paras. 2,
32;
St. Denis
, at para. 17
.

[6]

The word any has been changed to an: see
Insurance Act
, R.S.O. 1990, c.
I.8
, s. 279(1) as it appeared on March 31, 2016.


COURT OF APPEAL FOR ONTARIO

CITATION: Stockey v. Grant, 2019 ONCA 597

DATE: 20190712

DOCKET: C66147

Huscroft, Trotter and
    Zarnett JJ.A.

BETWEEN

Robert Stockey

Plaintiff (Respondent)

and

Gary Grant
and Diana Kopp Grant

Defendants (
Appellant
)

Ryder L. Gilliland, for the appellant

Ian K. Latimer, for the respondent

Heard: June 28, 2019

On appeal from the order of Justice Bonnie Wein of the Superior
    Court of Justice, dated October 15, 2018.

REASONS FOR DECISION

[1]

The appellant appeals from an order dismissing two related proceedings and
    striking out his statement of defence in a third related proceeding arising out
    of an aborted real estate transaction in 2004.

[2]

The appellants factum accurately describes this case as having a tortured
    history. For the purpose of this decision, it is not necessary to delve deeply
    into the details. In short, the appellant commenced two actions against the
    respondent (CV-06-2644-00 and 615/08), as well as a lien application (85/11).
    The respondent commenced an action against the appellant (390/08).

[3]

There have been many motions, largely initiated by the appellant. He has
    accumulated many costs orders. He has a poor history of paying costs orders in
    a timely manner.

[4]

On March 7, 2018, the respondent brought a motion to have the
    appellants statement of defence in 390/08 struck out, and to dismiss the
    appellants action in CV-06-2644-00. Neither action 615/08 nor the lien
    application (85/11) were part of this proceeding. On June 11, 2018, Barnes J.
    granted the relief sought, to take effect if the appellant did not pay the
    identified outstanding costs orders within 60 days. In his order, Barnes J.
    specified CV-06-2644-00 as the action subject to dismissal.

[5]

On June 21, 2018, the parties attended a trial management conference
    before Wein J. in relation to 390/08. In her Endorsement, Wein J. declared
    that the deadline for satisfying the order of Barnes J. was August 13, 2018.
    She further said that there would be another trial management conference after
    August 13, 2018 if the matters are proceeding.

[6]

The appellant did not meet the 60-day deadline set by Barnes J. However,
    one week later, he attempted to make payment of the principal amount owing (but
    not interest) in the amount of $19,499.03. While the appellants bank draft was
    received by the respondents counsel, it has never been cashed.

[7]

The parties appeared before Wein J. again on October 15, 2018 in
    relation to 390/08. The appellant requested that the June 11, 2018 order of
    Barnes J. be set aside. The request was denied, in part for the following
    reasons:

At some point the Court must insist that its orders be complied
    with, and Mr. Grant has had many opportunities to pursue his case. While a trial
    on the merits is always to be preferred, I am convinced that further
    opportunities to Mr. Grant would not result in anything other than another
    delay.

[8]

At the end of her reasons, Wein J. clarified that her order covers both
    actions 390/08 and 615/08. The formal order of Wein J. was styled in action
    390/08. It provided, in para. 1, that the order made on June 11, 2018 stands
    and the matter is formally dismissed as of August 13, 2018 and in para. 3 that
    this order covers both actions 390/08 and 615/08.

[9]

The appellant submits that action 615/08 was not the subject of the
    order made by Barnes J. on June 11, 2018 and for that reason should not have
    been dismissed. He also argues that it was unfair to dismiss the proceedings,
    for the following reasons: (1) when his actions were dismissed, he had substantially
    complied with the Barnes J. costs order, albeit one week late; (2) the parties
    were on the eve of trial (scheduled to commence on November 28, 2018); (3) he
    has been unwavering in his desire for a trial on the merits; (4) he was
    self-represented; and (5) he offered some evidence for his tardiness (i.e.,
    medical issues).

[10]

The
    respondent submits that Wein J. did not err in refusing to grant relief from
    the order of Barnes J. The respondent submits that, over the years, the
    appellant has brought many motions, and has been the source of much of the delay.
    In the respondents submission, restoring the appellants actions (and
    permitting him to defend against the respondents action) will result in
    further delay. Moreover, the respondent argues that Wein J. did not err in
    dismissing 615/08 because the appellant had failed to satisfy a costs order
    made in that proceeding.

[11]

Subject
    to the condition discussed in para. 14 below, the appeal must be allowed. The
    dismissal of the 615/08 action was done without advance notice to the
    appellant. That action was not part of the proceedings before Barnes J., and it
    was not part of his order.

[12]

Granting
    relief in relation to the other matters is somewhat more difficult to justify.
    The appellant is the author of his own misfortune. He missed a significant
    deadline. However, and as discussed below, he has now tendered payment for all
    costs orders made against him and he is motivated to have this case determined
    on its merits.

[13]

We
    agree with Wein J. that a trial on the merits is always preferred. In all of
    the circumstances, it makes little sense to restore 615/08 alone. The three
    proceedings relate to the same subject matter. Allowing 615/08 to proceed
    alongside 390/08 with the appellants statement of defence struck out may compromise
    the presiding judges ability to adjudicate this dispute on the merits.

[14]

As
    noted above, the appellant had tendered a bank draft in the amount of $19,499.03
    in an attempt to satisfy the order of Barnes J. We were informed that, prior to
    the hearing of the appeal, he also tendered a cheque for $10,734.15 in
    satisfaction of interest on the amounts specified in the Barnes J. order, as
    well as other costs orders. Neither tender has been accepted. Those costs must
    be paid by the appellant. We direct that the appellant pay into the Superior
    Court of Justice to the credit of action 390/08 the total sum of $30,233.18
    within 30 days of the date of these reasons. If that condition is satisfied,
    the appeal is allowed, the order of Wein J. is set aside in its entirety, the
    appellants actions (CV-06-2644-00 and 615/08) are restored, and the order
    striking his statement of defence in 390/08 is set aside. As well, if the
    condition is satisfied, the respondent shall be entitled to payment out of
    court of such costs. If the condition is not satisfied, the appeal is dismissed.

[15]

Although
    the appellant was successful on this appeal, we make no costs order of the
    appeal. The appellants own conduct gave rise to the orders of Barnes J. and
    Wein J., and the need for this appeal.

[16]

Finally,
    given the history of this case, and in fairness to the respondent, it would be
    preferable that the case be given priority in terms of trial scheduling,
    subject to the fulfilment of the condition above. However, we are mindful of
    the fact that this will depend upon the priorities and available resources in the
    Region from which this case originates.

Grant Huscroft J.A.

Gary Trotter J.A.

B. Zarnett J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Thistle v. Schumilas, 2019 ONCA 566

DATE: 20190704

DOCKET: M50375/M50377 (C66432)

Hourigan, Paciocco and
    Fairburn JJ.A.

BETWEEN

Jason
    Michael Thistle

Plaintiff

(Respondent / Responding
    party)

and

James
    Schumilas, Jr.
, WCS Financial Services, Cinaber Financial Inc. and
    Bridgeforce Financial Group Inc.

Defendants

(
Appellant / Moving
    party
)

Marie Sidney, for the moving party

Sean Zeitz, for the responding party

Heard and released orally: June 28, 2019

REASONS FOR DECISION

[1]

The underlying claim in this proceeding is for damages arising from the
    denial of payment under a life insurance policy. Mr. Thistle and his partner
    applied for a life insurance policy with the assistance of Mr. Schumilas, an
    insurance agent. Mr. Thistles partner passed away and the insurer denied
    coverage. In addition to suing the insurer, Mr. Thistle also sued Mr. Schumilas
    for negligence.

[2]

Mr. Schumilas moved for summary dismissal of the action on the basis
    that Mr. Thistle lacked capacity to bring the claim, arguing that the cause of
    action vested in Mr. Thistles trustee in bankruptcy. Mr. Thistle moved for an
    order granting him standing to bring the action. Justice Braid dismissed Mr.
    Schumilas motion and granted Mr. Thistle an order
nunc pro tunc

for
    standing to bring the action notwithstanding his assignment in bankruptcy and
    subsequent discharge (the main order). He also granted Mr. Thistle leave to
    amend the statement of claim and other procedural orders (the ancillary
    orders).

[3]

Mr. Schumilas appealed to this court. There is a dispute between the
    parties whether the main order was made pursuant to the
Bankruptcy and
    Insolvency Act
(the
BIA
) or the motion judges inherent
    jurisdiction. Mr. Thistle also took the position that the ancillary orders
    ought to have been appealed to the Divisional Court, with leave of that court.
    Mr. Thistle moved for a stay of the appeal. Mr. Schumilas cross-moved for a
    declaration that the appeal was properly brought under the
Courts of
    Justice Act
, and in the alternative, a motion for an order granting leave
    to extend time to appeal under the
BIA
, and an order granting leave
    under s. 193(e).

[4]

Miller J.A. determined that the main order was made pursuant to the
    motion judges inherent jurisdiction, as it was a civil action for damages
    brought years after Mr. Thistle was discharged from bankruptcy. With respect to
    the ancillary orders, Miller J.A. determined these were properly within the
    jurisdiction of the Divisional Court. Should leave be granted by that court, he
    ruled, a motion could be brought to join them together with the main appeal.

[5]

Mr. Thistle now brings a motion for an order setting aside the order of
    Miller J.A. and dismissing the appeal. Mr. Schumilas brings a cross-motion for
    an order, should Miller J.A.s order be overturned, extending the time to serve
    a notice of appeal and an application for leave to appeal pursuant to the
BIA
,
    and an order declaring that leave to appeal under s. 193 of the
BIA
is
    not required or, in the alternative, an order granting leave to appeal pursuant
    to s. 193(e).

[6]

We are of the view that Miller J.A. did
    not err in his interpretation of Braid J.s order. There is nothing in that
    order that indicates that she was purporting to rely on the
BIA
. This was a civil proceeding, not a bankruptcy proceeding
    and not an action authorized by the
BIA
. In the circumstances of this case, Miller J.A. did not
    err in finding that the decision was not rendered pursuant to the power granted
    to a motion judge under the
BIA
.

[7]

The motion to reconsider the order of
    Miller J.A. is dismissed. It is unnecessary to consider the cross-motion.

[8]

Costs are to Mr.
Schumilas
in the amount of $3,700, inclusive of HST and
    disbursements.

C.W. Hourigan J.A.

David M. Paciocco J.A.

Fairburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Thurston v. Ontario (Childrens Lawyer), 2019 ONCA
    640

DATE: 20190731

DOCKET: C65982

Huscroft, Trotter and Zarnett JJ.A.

BETWEEN

Barbara Thurston

Plaintiff (Respondent)

and

Her Majesty the Queen
    in Right of Ontario as represented by the

Office of the Children's
    Lawyer (Ontario)

Defendant (Appellant)

Vanessa Glasser, for the appellant

Tina K. Lee, for the respondent

Heard: June 24, 2019

On appeal from the order of Justice Andra Pollak of the Superior
    Court of Justice, dated September 24, 2018, with reasons reported at 2018 ONSC
    2137.

Huscroft J.A.:

OVERVIEW

[1]

Barbara Thurston (the respondent) is a sole
    practitioner lawyer who provided legal services to the Office of the Childrens
    Lawyer (the OCL) pursuant to a series of agreements over a period of 13 years,
    the last of which expired on March 31, 2015.

[2]

The OCL did not renew her retainer following the
    expiry of the last agreement. The respondent brought a claim alleging that she
    was a dependent contractor and was therefore entitled to 20 months notice of
    termination. The OCL brought a motion for summary judgment dismissing her claim.
    That motion was dismissed and the OCL appeals.

[3]

I conclude that the motion judge erred in
    concluding that the respondent was a dependent contractor.

[4]

I would allow the appeal for the reasons that
    follow.

BACKGROUND

The facts

[5]

The respondent was a member of the OCL Personal
    Rights Panel, one of approximately 380 lawyers retained by the OCL to provide
    legal services in regard to custody, access, and child protection matters. She
    was first appointed to the OCL panel of lawyers in 2002, for a two-year period.

[6]

The respondent remained a member of the OCL panel
    for the next 13 years pursuant to a series of fixed-term contracts, each of
    which required her to apply for reappointment as each contract expired. There
    was no automatic right of renewal for the contracts. However, on each occasion
    she was reappointed to the panel, initially for two-year terms and then from
    2012 on an annual basis.

[7]

The respondent maintained an independent legal
    practice while she was a member of the OCL panel, and that 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 total billings. Over the 13-year period that
    she was on the OCL panel, OCL billings accounted for an average of 39.9% of her
    annual billings.

[8]

The respondents last retainer agreement expired
    in 2015. On March 31, 2015, the expiry date of that agreement, the OCL informed
    the respondent that her retainer was not going to be renewed. The respondent
    was given one year to wind down her existing OCL files and was not subsequently
    appointed to the OCL panel.

The retainer agreement

[9]

The respondents 2012 retainer agreement ran
    until March 31, 2013, but was extended from April 1, 2013 to March 31, 2014, and
    again from April 1, 2014 to March 31, 2015. It included the following
    provisions:

The term may be extended or subsequently
    renewed in the discretion of the Childrens Lawyer.

No guarantee of work

The OCL makes no guarantee of the total value
    or volume of work to be assigned to you. You confirm that in your capacity as
    an OCL agent, you are not an employee of the OCL.

Termination of Agreement

In order to effect an orderly transition, you
    agree to give the OCL sixty days written notice of your intention to resign
    from the OCL panel

The Childrens
    Lawyer, or her designate, reserves the right, at her sole discretion, to
    terminate this retainer agreement at any time, without fault and without
    liability.

The motion judges decision

[10]

The respondent conceded that she was not an
    employee. The issues before the motion judge were whether the respondent was a
    dependent contractor and, if so, whether she was entitled to reasonable notice
    or payment in lieu of reasonable notice, despite the fixed-term nature of the
    retainer agreement.

[11]

The motion judge found that the respondents
    relationship with OCL was continuous for a 13-year period with no break. During
    that period, the respondent performed the work of the OCL under the OCLs
    control and was perceived by the public to be an employee of the OCL. An
    average of 39.9% of the respondents total billings from her legal practice came
    from the OCL during the period in which she was on the OCL panel, and the trend
    was for an increasingly larger portion of the respondents income to come from
    the OCL  reaching a high of 62.6% in 2012-2013, though dropping to 50% in the
    final year in which she was retained. In brief reasons, the motion judge
    concluded that these factors were sufficient to tip the balance in favour of
    a finding of dependent contractor status. In particular, the motion judge noted
    the permanence of the respondents relationship with the OCL, the fact that she
    performed work that is integral to the OCL, and the public perception that she
    was an OCL lawyer.

[12]

The motion judge rejected the OCLs alternative
    position that there was no obligation to provide notice or payment in lieu of
    notice at the expiry of a fixed-term agreement. She distinguished the cases
    proffered in support of the OCLs position on the basis that the respondents
    contract was renewed for 13 years, without break in service, in addition to the
    factors outlined above. The motion judge dismissed the OCLs motion for summary
    judgment and seized herself of the trial of the notice and damages issues.

DISCUSSION

Jurisdiction to hear the appeal

[13]

A preliminary issue arose concerning whether the
    appeal was properly before this court  in particular, whether the motion judge
    had made a final order concerning the respondents status as a dependent
    contractor.

[14]

The order dismissing the appellants motion for
    summary judgment includes the following provisions:

THIS COURT ORDERS
    that the OCL had not met its burden of proof that Ms. Thurston was an
    independent contractor. Ms. Thurston was a dependent contractor.

THIS COURT ORDERS
    that findings of fact in relation to this motion, as stated in the Courts Endorsement,
    dated June 27, 2018, were intended to be binding on the parties.

THIS COURT ORDERS
    that the remaining issues for trial are the appropriate notice and damages, if
    any, to be awarded to Ms. Thurston.

THIS COURT ORDERS
    that the Honourable Madam Justice Pollak shall remain seized of the trial,
    provided the trial can be scheduled in a timely and expeditious manner without
    adverse delay or consequences to the parties.

[15]

The wording of the order followed
    an exchange between counsel and the motion judge, after counsel for the
    appellant had taken the view that the motion judge had, in her endorsement,
    made no findings of fact or law in dismissing the motion for summary judgment,
    and that all issues were to be determined at trial. Counsel wrote to the court
    seeking clarification on the nature of her decision.

[16]

The motion judges assistant replied on behalf
    of the motion judge in an email dated August 8, 2018. The parties were informed
    that on the issues put before the Court, findings of fact were made and
    intended to be binding on the parties.  The reference to there being no
    genuine issue for trial refers to the fact that the Court was able to make a
    decision with respect to the only issue put before the Court by the parties
    that is the Plaintiffs status on the basis of the record before it. The only remaining
    issues concerned the appropriate notice and damages to be awarded to the
    respondent.

[17]

I am satisfied that the motion judges
    clarification confirms that she made a conclusive finding on the dependent
    contractor issue. This was the issue on which the motion depended. Although r.
    20.04(4) of the
Rules of Civil Procedure
, R.R.O.
    1990, Reg. 194, is not cited in the email clarification, the rule was put to the
    motion judge by counsel for the appellant, her response is clear, and there is
    no doubt that the motion judge intended her determination to be binding on the
    parties at trial:
Skunk v. Ketash
, 2016 ONCA
    841, 135 O.R. (3d) 180, at para. 58.

[18]

Accordingly, this appeal is from a final order
    of a judge of the Superior Court of Justice and is properly before this court.

The respondent is not a dependent contractor

[19]

Given the respondents concession that she was
    not an employee of the OCL, it was necessary to determine only whether she was
    a dependent or independent contractor.

[20]

The appellant submits that the motion judge erred:

1.

in applying this courts analysis in
McKee v. Reids Heritage Home
    Ltd.
, 2009 ONCA 916, and
Keenan v. Canac Kitchens Ltd.
, 2016 ONCA
    79;

2.

in failing to consider all of the relevant factors going to economic
    dependence, including whether any dependence was self-induced;

3.

in concluding that the relationship was continuous for 13 years; and

4.

in concluding that the OCL had a high degree of
    control over the respondents work.

[21]

The respondent submits that the motion judges
    decision is a factual one entitled to deference on appeal, and in any event is
    correct.

[22]

In my view, the motion judge misapprehended the
    nature of the legal standard and failed to give effect to several relevant
    considerations in applying that standard. The result is an unreasonable
    decision that cannot stand.

[23]

As this court set out in
McKee
at para. 30, 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. Minimum
    economic dependency is a vaguely worded standard, and its application yields
    outcomes that are highly context-specific:
McKee
, at para. 38. It follows that a judges decision as to the nature
    of a working relationship is generally entitled to deference.

[24]

But the determination as to dependent contractor
    status must be made having regard to the purpose of the concept: the extension
    of the common law entitlement to notice of termination from employees to
    dependent contractors. That extension was justified in
McKee
on the
    basis that, like employees  and
unlike
independent contractors
    dependent contractors are to a large extent economically dependent, albeit on a
    contracting party rather than an employer.

[25]

In distinguishing dependent from independent
    contractors,
McKee
made clear that exclusivity of service provision, and
    therefore of income, is key. As the court put it, exclusivity is
determinative
, as it demonstrates economic dependence; exclusivity, the court
    said, is a hallmark of the dependent contractor category:
McKee
, at
    para. 34. In
Keenan
, at para. 25, this court
    emphasized that exclusivity was integrally tied to the question of economic
    dependency and that the determination of exclusivity requires consideration of
    the full history of the relationship in question.

[26]

These two cases constitute the primary guidance
    from this court on the issue of distinguishing dependent and independent
    contractors. Since
McKee
was released in 2009, several lower court
    decisions have interpreted and applied the concept of exclusivity to
    determine a contractors status. In several cases in which a dependent
    contractor relationship was found to exist, the relationship was absolutely
    exclusive in nature:
see, e.g.,
Cormier v. 1772887 Ontario Limited c.o.b.
    as St. Joseph Communications
, 2019 ONSC 587
;

V.P.M. Marketing v. Jenne
, 2018
    ONSC 4627
;

Tetra Consulting v. Continental
    Bank et al.
, 2015 ONSC 4610,
and
Ford v. Keegan
, 2014 ONSC 4989.

[27]

In cases in which a dependent contractor
    relationship was found to exist but exclusivity was not absolute, substantially
    more than a majority of the dependent contractors income was earned from the
    contracting party:

see, e.g.,
Beattie v. Women College Hospital,
2018
    ONSC 1852
; Sarnelli v. Effort Trust Co
., 2011 ONSC 1080.

[28]

In this case, there is no question that the
    respondent did not work exclusively for the OCL. On the contrary, the OCL
    expected her to maintain a private legal practice throughout the entire time that
    she was retained, and she did so.

[29]

Putting the respondents case at its highest,
    over the course of her retainer an average 39.9% of her annual billings came
    from the OCL. To be sure, that is a significant percentage of the respondents
    billing, and the loss of the OCL retainer would have had a substantial impact
    on the respondents legal practice and her income. But that is not determinative
    of her status as a dependent contractor. 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.

[30]

Exclusivity is a categorical concept  it poses an
    either/or question, and near-complete exclusivity must be understood with
    this in mind. Near-complete exclusivity cannot be reduced to a specific
    number that determines dependent contractor status; additional factors may be
    relevant in determining economic dependency. But near-exclusivity necessarily
    requires substantially more than 50% of billings. If it were otherwise,
    exclusivity  the hallmark of dependent contractor status  would be rendered
    meaningless.

[31]

The motion judge did not properly take account
    of the following considerations:

-

the respondents contracts with the OCL contemplated that she
    would continue her private practice and required her to confirm that she did
    not work exclusively for the OCL;

-

the respondent continued to operate her private legal practice
    during the entire period of her retainer;

-

the respondent was not guaranteed a minimum number of files or
    amount of work with the OCL;

-

the OCL reserved the right, at its sole discretion, to terminate
    the respondents retainer agreement at any time, without fault and without
    liability;

-

the respondent had her own office, supplies, and staff; and

-

the respondents private practice constituted the main source of
    her total income throughout the period.

[32]

In short, the OCL was one of the respondents
    clients  a very important client, but only one of her clients. The loss of a
    client will be more or less significant to any contractor, but care must be
    taken in applying dependent contractor case law to professionals such as
    lawyers working under retainer agreements.

[33]

In this case, the respondents loss of the OCL retainer
    results in a 39.9% reduction in the billings generated by her legal practice.
    That is a significant loss, but it is insufficient to establish the requisite economic
    dependency. As a result, there is no need to consider the appellants
    alternative position that any economic dependence was self-induced.

[34]

From the OCLs perspective, the respondent was
    one of many lawyers on retainer across Ontario. The longevity of the
    respondents retainer with the OCL did not transform it into a relationship of
    enduring dependency, as the respondent submits. The terms of the retainer
    make it plain that the respondent had no entitlement to any minimum level of
    work. Specifically, as noted above, the retainer agreement in place from
    2012-2015 stated:

The OCL makes no guarantee of the total value
    or volume of work to be assigned to you.

[35]

The motion judges failure to give effect to
    these considerations renders her conclusion that the respondent was a dependent
    contractor unreasonable. The motion judge focused on the work the respondent
    performed for the OCL, noting that the OCL had a great deal of control over her
    work and working conditions and that the public perceived the respondent to be
    an OCL employee. But the OCL did not control the respondents work in general,
    and its control over her OCL work was necessary given the nature of the
    relationship that the retainer established and the OCLs public function. Moreover,
    regardless of any public perception the terms of the contract clearly
    distinguished lawyers on retainer from OCL in-house lawyers. But the key point
    is this: only 39.9% of earnings came from the OCL during the relevant period.
    This cannot reasonably be categorized as a near-exclusive relationship
    without changing the nature of the legal test.

[36]

The respondent argues that the only way that she
    could practice childrens law was to do so with the OCL. That may be true, but it
    is irrelevant: the respondent had no entitlement to work in her preferred area
    of practice. She is in no different position than any other lawyer who has lost
    a preferred client. The terms of her retainer made the nature of her
    relationship with the OCL clear.

[37]

This conclusion is sufficient to dispose of the
    appeal.

CONCLUSION

[38]

I would allow the appeal
and substitute an order granting the appellants
    motion for summary judgment and dismissing the respondents action.

[39]

I would award the appellant costs of the appeal
    in the agreed amounts of $20,000 and $5,000 on the motion, both figures
    inclusive of taxes and
disbursements.

Released: B.Z. July 31, 2019

Grant Huscroft J.A.

I agree. Gary Trotter J.A.

I agree. B. Zarnett J.A.