Hello everyone. Below are summaries of this week's Ontario Court of Appeal civil decisions (non-criminal). Topics include privacy, franchise law, issue estoppel, appellate jurisdiction over a trial judge's decision to strike a jury (with a strongly-worded dissent by Laskin J.A.), and the permissibility of using surveillance evidence at trial without disclosing it to the opposing party.

In addition, the Court of Appeal released its highly-anticipated, yet unsurprising decision in Hopkins v. Kay. It confirmed that individuals whose medical records are unlawfully accessed, contrary to the Personal Health Information Protection Act, can pursue remedies with both the Privacy Commissioner and the Courts.

Salasel v. Cuthbertson, 2015 ONCA 115

[Hoy A.C.J.O., van Rensburg and Brown JJ.A.]
Counsel:
J.G. Hodder, for the appellant
E.J. Baron and A. McCutcheon, for the respondents

Keywords: Civil litigation, Legal costs as damages, Rule 21.01(3)(d) of the Rules of Civil Procedure, Currie v. Halton Regional Police Services Board, Action barred, Issue estoppel, Toronto (City) v. C.U.P.E., Local 79, Absolute privilege, Amato v. Welsh

Facts:  In October 2010, Hassan Rasouli ("Mr. Rasouli") suffered debilitating complications following surgery and was kept alive by mechanical ventilation. The respondents, three doctors, recommended withdrawal of such mechanical ventilation. The appellants opposed the decision and did not consent. The respondents were in the view that the Consent and Capacity Board's ("CCB") approval of the withdrawal was not necessary. The appellants applied for a declaration that in the absence of consent, the matter had to go to the CCB, and the respondents applied for a declaration that it did not. The appellants were successful, and the decision was affirmed by the Court of Appeal and the Supreme Court of Canada ("Prior Proceedings"). The application judge and Court of Appeal made cost orders against the respondents, and such orders were complied with. In this action, the appellants sued the respondent physicians and were seeking to recover the balance of their legal costs, $1 million in special damages and $1 million general, aggravated and punitive damages.  In addition, there was another claim for $250,000 under s. 61 of the Family Law Act and for the intentional infliction of mental suffering.

The respondents brought a motion under Rule 21.01(3)(d) of the Rules of Civil Procedure ("Rules") to stay or dismiss the action on two grounds. First, the respondents argued that to the extent the action sought the recovery of legal fees incurred in the Prior Proceedings, it was barred by the doctrine of issue estoppel because it sought to re-litigate cost awards made in the Prior Proceedings. Second, the respondents contended that the balance of the claims were frivolous, vexatious or an abuse of process in that they were barred by the doctrine of absolute privilege. The motion judge agreed and dismissed the action.

Issues:
(1) Did the motion judge err in dismissing the appellants' claim for legal fees as special damages on the basis of issue estoppel?

(2) Did the motion judge err in dismissing the rest of the appellants' claims on the ground that they were barred by absolute privilege?

Holding:  Appeal dismissed.

Reasoning:  Rule 21.01(3)(d) of the Rules allows a defendant to move to stay or dismiss an action on the ground that the "action is frivolous or vexatious or is otherwise an abuse of the process of the court". As per Currie v. Halton Regional Police Services Board (2003), 233 D.L.R. (4th) 657 (Ont. C.A.), a court only invokes its authority under this rule or pursuant to its inherent jurisdiction to dismiss or stay an action in the clearest of cases.

(1)  No.  As per Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, to invoke issue estoppel, a party must meet three pre-conditions: (1) the issue in the proceeding must be the same as the one decided in the prior decision; (2) the prior judicial decision must have been final; and, (3) the parties to both proceedings must be the same or their privies.

The appellants argued that they were unable to raise the issue of damages in the nature of legal fees in the Prior Proceedings because they could not assert a claim for damages in an application. Thus, they submitted that they should be permitted to assert a claim for monetary relief in this action. The Court held there was no merit in this submission. The appellants could have requested larger cost awards in the Prior Proceedings.

Further, the appellants argued that the cost awards in the Prior Proceedings were not fundamental to the injunctive relief granted to Mr. Rasouli, and was therefore open to them to bring an action to recover legal costs as damages. The position taken by the appellants was incorrect. The Court referred to the motion judge's reasoning where it was stated that "[a]n award of costs may not be the very subject matter of the litigation, but it is not incidental in the sense that the prior court did not specifically turn its mind to the issue". There was reference to Danyluk v Ainsworth Technologies Inc., [2001] 2 SCR 460, where it was stated that the costs rulings form part of the conclusions "that were necessarily ... determined in the earlier proceedings".

(2) No.  This was a clear case in which the communication was protected by the doctrine of absolute privilege. Pursuant to Amato v. Welsh, 2013 ONCA 258, the doctrine of absolute privilege contains several basic elements: no action lies, whether against judges, counsel, jury, witnesses or parties, for words spoken in the ordinary course of any proceedings before any court or judicial tribunal recognised by law; the privilege extends to documents properly used and regularly prepared for use in the proceedings; and, a statement will not be protected if it is not uttered for the purposes of judicial proceedings by someone who has a duty to make statements in the course of the proceedings.

The issue in this case was communication ("the Underwood Letter") made by counsel for the respondents before the actual commencement of legal proceedings. In 1522491 Ontario Inc. v. Steward, Esten Professional Corp., 2010 ONSC 727, 100 O.R. (3d) 596, it was held that in Ontario, absolute privilege may extend to communications by a party's solicitor made before the actual commencement of proceedings.

The appellants submitted that the doctrine of absolute privilege for pre-litigation communication only prevented the bringing of defamation claims in respect of the communication. This view was rejected. As per Samuel Manu-Tech Inc. v. Redipac Recycling Corp. (1999), 124 O.A.C. 125, it was held that absolute privilege "extends to any action, however framed, and is not limited to actions for defamation".

The appellants further advanced that absolute privilege did not attach to the Underwood Letter because at the time it was written no substantive steps had been taken to prepare for litigation (in the sense that the respondent physicians had not made a decision to litigate, it was the appellants, not the respondents, who first commenced a legal proceeding following the communication of the Underwood Letter). However, the Underwood Letter was written at a time when it was clear that the respondent physicians would be required to respond to the litigation that was intended to be initiated against them. Furthermore, before the Underwood Letter was written, it was clear that judicial proceedings would take place over the issue of whether consent was required to withdraw mechanical ventilation. Shortly after the Underwood Letter was written, the proceedings commenced. Since the privilege extends to communications directly concerned with actual contemplated proceedings, it would be inconsistent to afford the protection to communications by counsel for one party, and to deny it to communications by counsel for another party.

In addition, the appellants argued that the motion judge failed to consider the implications of the decision of Amato v. Welsh, 2013 ONCA 258, 305 O.A.C. 155 ("Amato"). The Court found there was a material difference between Amato and the present case. In Amato the disputed statements were made by lawyers during the course of their retainer by the plaintiff clients, thereby giving rise to a possible conflict between the lawyers' duty of loyalty to their clients and absolute privilege.  However, in the present case the statutory regime concerning consent to medical treatment established by the Health Care Consent Act ("HCCA") recognizes that disputes over appropriate medical treatment may arise between treating physicians and a patient's substitute decision-maker, and the HCCA establishes a mechanism for resolving such disputes through applications to the CCB. The Court found that it was difficult to see how a duty of loyalty by the physician in respect of treatment decisions for a patient – akin to the duty of loyalty owed by a lawyer to a client discussed in Amato – could arise when the statutory regime governing treatment decisions specifically recognizes that the physician and the substitute decision-maker may disagree about a treatment plan.

The appellants also characterized the Underwood Letter as a threat. When considering the doctrine of absolute privilege, the analysis focuses on occasion on which a communication was made, not its content.

2147191 Ontario Inc. v. Springdale Pizza Depot Ltd., 2015 ONCA 116

[Doherty, Gillese and Lauwers JJ.A.]
Counsel:
D. Altshuller, for the appellants
S.P. Murphy, for the respondents

Keywords: Franchise Law, Arthur Wishart Act, Resale Exemption from Disclosure

Facts: This is an appeal from the order of Justice Frederick L. Myers of the Superior Court of Justice, dated June 6, 2014. The appellants were involved in three meetings with the respondents in respect of the respondents' acquisition of a franchise. The discussions included the possibility that the respondents would acquire the franchise through a new franchise agreement. It was eventually determined that the transaction would proceed by way of assignment from the previous franchisee. The appellants required the respondents to execute an acknowledgement. Among other things that document provided certain additional protection to the appellants. The appellant submitted that the motion judge erred in holding that the appellants could not avail themselves of the "resale" exemption from disclosure provided in s. 5(7)(a)(iv) and s. 5(8) of the Arthur Wishart Act.

Issue: Did the motion judge err in holding that the meetings were enough to make the appellants more than a "passive" participant in the process, therefore triggering the disclosure requirements?

Holding: Appeal dismissed.

Reasoning:
No. The motion judge addressed this issue and referred to the controlling case law. His finding was justified on the unchallenged facts before him. The finding was also consistent with the spirit of the case law concerning the interpretation of the Arthur Wishart Act and recognized both the overall purpose of the Act and the need to "narrowly construe" the disclosure exceptions in the Act.

Kempf v. Nguyen, 2015 ONCA 114

[Laskin, Rouleau and Epstein JJ.A.]
Counsel:
T. Buckley and D. Smith, for the appellant
P.J. Monaghan and C. Matthews, for the respondents

Keywords:  Civil Procedure, Striking Jury Notice, Torts, Volenti non fit injuria, Waiver

Facts:
During a charity bicycle ride with thousands of participants, the appellant's bicycle wheel clipped the respondent's bicycle wheel, causing the respondent to fall and suffer serious injuries.

The respondent sued the appellant in negligence for damages arising from the accident.  The appellant pleaded, among other things, that the respondent had voluntarily assumed the risk of the ride ("volenti") and that the respondent had himself been negligent.

The parties settled the issue of damages and went to trial on the issue of liability.

At the opening of trial, the respondent moved to strike the jury notice on the basis that the appellant's plea of volenti amounted to a claim for declaratory relief, disqualifying the action from being tried by a jury under subsection 108(2) of the Courts of Justice Act. The respondent further argued that even if volenti was reserved to the trial judge, he would nonetheless be prejudiced by the jury's inability to understand the limited use that could be made of the waiver of liability signed by the respondent.

The appellant argued that such an order would be premature, and that the Court should reserve its decision until after all of the evidence was heard, unless a problem arose sooner. The appellant further argued that an appropriate charge could provide the jury with the necessary tools to understand the manner in which the waiver could be used in determining liability.

The trial judge granted the respondent's motion to strike the jury notice and discharged the jury. The evidence surrounding the waiver form must be led in light of the volenti plea. The trial judge reasoned that, in determining the question of liability, the jury would have to determine the effect of the waiver –  an issue of law and, in pith and substance, declaratory relief. She went on to find that it would be impossible for the jury to use the waiver evidence for the narrow purposes relevant to liability, even with a strong jury charge.

After a five-day trial, the trial judge found that the appellant was liable. However, the trial judge did not address the plea of contributory negligence in her reasons, nor did the trial judge expressly indicate that she found the appellant entirely at fault.

Issues:

(1) Did the trial judge err in striking the jury notice?

(2) Did the trial judge err in failing to apportion any liability against the respondent?

(3) Did the trial judge err in finding that the applicable standard of care was negligence?

Holding: Appeal allowed. Judgment set aside. New trial ordered on the issue of liability, to be heard by a judge and a jury.

Reasoning:  [Epstein and Rouleau JJ.A]
(1) Yes. Although the trial judge's motions do not reflect an arbitrary or capricious exercise of judicial discretion, she erred by basing her decision to strike the jury notice upon wrong or inapplicable principles of law.

The Waiver Issue

The trial judge's decision to strike the jury was based primarily on her concern that, even with proper instructions, the jury would not be able to understand the limited use they could make of the waiver. The trial judge erred in taking this position. It is the trial judge's duty to determine the applicable legal principles and instruct the jury in accordance with these principles.

The limited application of the waiver is hardly beyond the ken of members of a jury. Civil juries in Ontario are able to decide issues involving contracts. This particular waiver is not a complicated or lengthy document.  The trial judge analyzed the waiver and found that, although it released the organizers of the event from liability, it did not release other participants from damages occasioned by the negligence of another participant. The trial judge did not find it necessary to resort to any principles of contractual interpretation or otherwise labour over its meaning.  She did not identify any ambiguity.  A properly instructed jury would understand that the document was not a bar to the respondent's action.

The Volenti Issue

To the extent that the trial judge's decision to strike the jury notice was based on her finding that the plea of volenti involved a claim for declaratory relief, this was an error of law. Volenti  is not a claim for declaratory relief: it is a full defence to a finding of negligence.

The Wait and See Issue

It would have been preferable for the trial judge to have reserved her decision on the motion until after the evidence had been completed or until a discrete problem arose. From a practical perspective, often the anticipated complexities of a case or other concerns giving rise to the motion to dismiss a jury do not materialize. From a principled perspective, the right to a jury trial is a fundamental, substantive right that should not be interfered with except for very cogent reasons.

However, as the "wait and see" approach is not a rule of law, the issue will not be dealt with further.

Appropriate Remedy

While ordering a new trial is to be avoided where possible, a new trial is necessary in these circumstances. There are at least three ways in which a jury acting reasonably could part ways with the trial judge:

  • The evidence was capable of supporting a finding that the respondent was contributorily negligent. The trial judge should have addressed contributory negligence in her reasons for judgment
  • Despite the trial judge's reasons for preferring the respondent's evidence over the appellant's, it would be open to a jury to assess credibility differently.
  • It would be open to a jury to reject the "rules" of a group ride as a de facto  standard of care, based on the circumstances and evidence in this case.

(2) A new trial is a complete response to the argument that the trial judge erred by failing to address contributory negligence in her reasons.

(3) The applicable standard of care issue is best left to be considered in the context of the new trial, informed, as it should be, by the particular facts of the case.

[Laskin J.A., (dissenting)]
(1) No. An appellate court's right to interfere with a trial judge's discretionary decision to discharge a jury is very limited. An appellant must show that the trial judge exercised this discretion arbitrarily or capriciously, or based on a wrong principle of law.

The appellant has not discharged this burden. The trial judge set out the correct test to be applied on the motion. This appeal turns on an argument that the trial judge applied the correct test unreasonably. This is not a persuasive argument.

A trial judge is always in the best position to decide whether to retain a jury. This trial judge is one of our province's most experienced judges in personal injuries litigation, having tried many cases both with and without a jury. She was concerned that, in combination with the volenti defence, the waiver agreement – which was poorly drafted and hard to read – would confuse the jury and would be used by them improperly, despite a strong charge. This was a reasonable exercise of her discretion. This court has no right to intervene.

(2) Although the appellant pleaded contributory negligence, he did not press the issue strongly at trial. Still, the trial judge considered the reasonableness of the respondent's conduct. If she erred in failing to make a specific finding on contributory negligence, her error was harmless. It is evident from her reasons and the record that the respondent was not negligent and that the appellant was entirely at fault for the respondent's injuries.

(3) The trial judge was correct in holding that the appropriate standard of care was ordinary negligence. Neither logic, nor policy, nor case law supports a recklessness standard.

Hopkins v. Kay, 2015 ONCA 112

[Sharpe, van Rensburg and Pardu JJ.A.]
Counsel:
P.J. Hawkins and D. Girlando, for the appellant Peterborough Regional Health Centre
J.C. Lisus and I.C. Matthews, for the appellant Mandy Edgerton-Reid
J-M. Leclerc, M.A. Crystal and N. Mizobuchi, for the respondent
D. Michaluk and M. Smith, for the intervener Ontario Hospital Association
L. Rothstein and J. Martin, for the intervener The Information and Privacy Commissioner of Ontario

Keywords: Privacy Law, Personal Health Information Protection Act, Tort Law, Intrusion Upon Seclusion

Facts:
In this proposed class proceeding, the named plaintiff (respondent on appeal) alleges that her records as a patient at the Peterborough Regional Heath Centre (the "Hospital") were improperly accessed. The respondent received two notices from the Hospital, as required by the Personal Health Information Protection Act, S.O. 2004, c. 3, Sch. A ("PHIPA"), indicating that the privacy of her personal health information had been breached. Two hundred and eighty patients were also notified of these breaches. The respondent pleads that she feared that her ex-husband had paid someone to access her patient records in order to find her. She bases her claim on the common law tort of intrusion upon seclusion, recognized by this court in Jones v. Tsige, 2012 ONCA 32, 108 O.R. (3d) 241.

This appeal arises from the Hospital's Rule 21 motion to dismiss the claim on the ground that PHIPA is an exhaustive code that ousts the jurisdiction of the Superior Court to entertain any common law claim for invasion of privacy rights in relation to patient records. The motion judge held that it was not plain and obvious that the claim based on Jones v. Tsige could not succeed and refused to dismiss the claim under Rule 21.

Issue: Is the respondent precluded from bringing a common law claim for intrusion upon seclusion in the Superior Court because PHIPA creates an exhaustive code?

Holding: Appeal dismissed.PHIPA does not create an exhaustive code. The respondent is not precluded from asserting a common law claim for intrusion upon seclusion in the Superior Court.

Reasoning:
The court stated that an intention to create an exhaustive code may be expressly stated in the legislation or it may be implied. They go on to note that there is nothing explicit in PHIPA dealing with exclusivity. Rather, the question is whether an intent to exclude courts' jurisdiction should be implied.

Sharpe J.A. cited three factors a court should consider when discerning whether there is a legislative intent to confer exclusive jurisdiction, as set out in Pleau v. Canada (A.G.), 1999 NSCA 159, 182 D.L.R. (4th) 373.

First, a court is to consider "the process for dispute resolution established by the legislation" and ask whether the language is "consistent with exclusive jurisdiction".

Second, a court should consider "the nature of the dispute and its relation to the rights and obligations created by the overall scheme of the legislation". The court is to assess "the essential character" of the dispute and "the extent to which it is, in substance, regulated by the legislative... scheme and the extent to which the court's assumption of jurisdiction would be consistent or inconsistent with that scheme": Pleau,at para. 51 (emphasis in original).

The third consideration is "the capacity of the scheme to afford effective redress" by addressing the concern that "where there is a right, there ought to be a remedy": Pleau,at para. 52 (emphasis in original).

In concluding that a legislative intention to confer exclusive jurisdiction on the Commissioner to resolve all disputes over misuse of personal health information should not be implied, the court looked at each of these factors.

First, the court notes that, while PHIPA does contain a very exhaustive set of rules and standards for custodians of personal health information, details regarding the procedure or mechanism for the resolution of disputes are sparse. The Act essentially leaves the procedure to be followed to the discretion of the Commissioner, and the Act gives complainants no procedural entitlements beyond the right to make representations.

Further, PHIPA expressly contemplates other proceedings in relation to personal health information. For example, s. 57(4)(b) specifically contemplates the possibility that complaints about the misuse or disclosure of personal health information may properly be the subject of a procedure that does not fall within the reach of PHIPA. Section 65 also demonstrates that the legislature turned its attention to the role of the courts and specifically limited their jurisdiction to assessing damages, hearing appeals on points of law and entertaining applications for judicial review.

Second, the court found that allowing actions based on Jones v. Tsige to proceed in the courts would not undermine the PHIPA scheme. The elements of the common law cause of action are, on balance, more difficult to establish than a breach of PHIPA, and therefore it cannot be said that a plaintiff, by launching a common law action, is "circumventing" any substantive provision of PHIPA. The aspects of the common law that may at first glance appear more lenient are not, upon closer consideration, significantly advantageous.

Lastly, in determining whether PHIPA's complaint procedure is sufficient to ensure effective redress, the court concluded there to be an absence of an effective dispute resolution procedure in PHIPA, and thus there is no merit to the suggestion that the court should decline to exercise its jurisdiction. PHIPA confers on the Commissioner a very wide discretion to decide whether or not to investigate a complaint. Section 57(4) provides that "the Commissioner may decide not to review the subject-matter of the complaint for whatever reason the Commissioner considers proper" (emphasis added). This highly discretionary review procedure is tailored to deal with systemic issues rather than individual complaints and thus it appears entirely likely that many individual complaints that could give rise to a proper claim in common law will not result in an order from the Commissioner.

Ontario (Community and Social Services) v John Doe, 2015 ONCA 107

[Hoy A.C.J.O., van Rensburg and Brown JJ.A.]
Counsel:
L. Favreau and E. Rizok, for the Ministry of Community and Social Services
D.R. Wright and J. Letton, for the Ontario Public Service Employees Union
L. Murray, for the Information and Privacy Commissioner of Ontario

Keywords: Privacy and Access To Information; Administrative Law; Judicial Review; Information and Privacy Commissioner of Ontario; Freedom of Information and Protection of Privacy Act; Family Responsibility Office; s. 14(1)(e), s. 20; s. 47(1); Ontario (Community Safety and Correctional Services) v Ontario (Information and Privacy Commissioner); British Columbia Telephone Co. v Shaw Cable Systems (B.C.) Ltd.

Facts:
The appellants, the Ministry of Community and Social Services (the "Ministry") and the Ontario Public Service Employees Union ("OPSEU"), appealed the order of the Divisional Court, dismissing their application for an order setting aside Order PO-2917 (the "Order") made by Adjudicator Steven Faughnan of the Information and Privacy Commissioner of Ontario (the "Commissioner") under the Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. F.31 (the "Act").

The Order required the Ministry to disclose records that included the full names of some employees of its Family Responsibility Office ("FRO") to an individual (the "Requester") who had requested personal information about himself in FRO's files pursuant to s. 47(1) of the Act. The section provides an individual with a right of access to his or her own personal information held by the government.

FRO's employees are responsible for enforcing court orders providing for the payment of child support and spousal support in the context of family law proceedings. The Requester was a support payor. He alleged that FRO had mismanaged his file and sought to discover the cause of the mismanagement. The documents sought by the Requester were "all records in [his] FRO file from the beginning", and included court documents, letters between FRO staff and the Requester or his lawyer, and internal FRO records. Some FRO employees' names appeared in some of these documents.

The Minister, in releasing certain records, redacted the names of FRO employees, relying on s. 14(1)(e) and s. 20 of the Act, which allowed the Minister to refuse disclosure where it could reasonably be expected to endanger the life or physical safety or seriously threaten the safety or health of FRO employees.

Holding: Appeal dismissed.

Reasoning:
The Order was reasonable. It fell within a range of reasonable administrative choices. The Commissioner considered all of the evidence in concluding that the Ministry had not satisfied its evidentiary burden of showing that there was risk to the health and safety of FRO employees associated with the disclosure of employees' names.

The Court of Appeal noted the recent decision by the Supreme Court of Canada in Ontario (Community Safety and Correctional Services) v Ontario (Information and Privacy Commissioner), 2014 SCC 31, which considered the phrase "could reasonably be expected to". The Court in that case found that this standard provided "a middle ground between that which is probable and that which is merely possible".

It was accepted that the Requester himself posed no threat to FRO employees. As to the risk arising if the Requester disseminated the names of FRO employees disclosed in the records, this is a relevant factor, to be assessed with all of the other factors, in determining whether or not the evidentiary threshold established by the Supreme Court in Ontario (Community Safety and Correctional Services) has been met. However, in this case, the Commissioner considered this factor and found that the threshold had not been met. There was no evidence that the FRO employees whose names were going to be disclosed had ever been the subject of threats by the Requester or anyone else. Further, the Requester had the names of at least seven employees and had not disseminated that information.

The Act did not require the Requester to provide an undertaking as to confidentiality, however, the provision of such an undertaking could be relevant in considering the weight to be given to the risk arising from broader dissemination in assessing the risk alleged under ss. 14 or 20 of the Act.

Finally, the Court of Appeal considered whether there was a direct operational conflict between the Order and an order of the Grievance Settlement Board, issued on consent, permitting FRO employees to identify themselves to the public by first name and employee identification number only. The Court agreed with the reasoning and conclusion of the Divisional Court that the Order did not necessitate violation of the GSB Order. There was no conflict that required the Court to determine which decision should take precedence, pursuant to the decision in British Columbia Telephone Co. v Shaw Cable Systems (B.C.) Ltd., [1995] 2 SCR 739.

Iannarella v. Corbett, 2015 ONCA 110 

[Laskin, Lauwers and Hourigan JJ.A.]
Counsel:
D.A. Zuber and J. Villeneuve, for the appellants
M.P. Forget, for the respondents

Keywords: Civil Litigation, Rear-End Motor Vehicle Accident, Admissibility of Surveillance Videos, Surveillance Videos for Impeachment, Visual Projection of Expert Reports to Jury, Insurance Act – s. 267.5,  Rules of Civil Procedure- 30.03(1), 30.07(b), 30.08(1)(a), 31.09, 48.04, 53.08, Evidence Act- s. 52,  Graham v. Hodgkinson, Browne v. Dunn

Facts: The appellant was driving a motor vehicle on a Toronto highway in winter when he was rear-ended by the respondent. The appellant and his wife (the "appellants) sued for damages for his personal injuries. The jury found that the respondent had not been driving negligently and the action was dismissed on liability grounds. At trial, Moore J. also dismissed the appellant's claim for non-pecuniary damages on the basis that the statutory "threshold" for this type of recovery under s. 267.5 of the Insurance Act was not met.

The appellants appeal the judgment of Moore J. on five grounds. They assert that he erred in explaining the liability onus to the jury, in permitting the respondents to use surveillance evidence at trial, in permitting the respondents to project expert reports on a screen before the jury during the appellant's cross-examination, in analyzing the statutory threshold for general damages under the Insurance Act, and in his $255,000 costs award to the respondents.

Issues:

(1) Did Moore J. err in instructing the jury on the onus of proof applicable to liability in rear-end motor vehicle collisions?

(2) Did Moore J. err in permitting the respondents to use surveillance evidence at trial for impeachment purposes?

(3) Did Moore J. err in permitting the respondents to project excerpts from medical reports on a screen in front of the jury during the appellant's cross-examination?

(4) Did Moore J. err in in analyzing the statutory threshold for general damages under section 267.5 of the Insurance Act?

(5) Did Moore J. err in his costs award of $255,000 to the respondents?

Holding: The appeal was allowed on all grounds, with the exception of the fourth ground above. Further, the judgment of Moore. J set aside and was substituted for a finding of liability against the respondents. A new trial on the issue of damages was ordered. The costs of the trial will be to the appellants in the cause on the second trial. The appellants were also awarded costs of this appeal, with the quantum to be agreed upon by the parties.

Reasoning:

(1) Yes. Moore J. erred in his charge to the jury on the onus of proof with respect to liability in this case. In rear-end motor vehicle collisions, once the plaintiff has proven that a rear-end collision occurred, the evidentiary burden shifts from the plaintiff to the defendant, who must then show that he or she was not negligent. This analysis would apply even where an emergency situation is alleged, as in this case. In this case, the appellant established that a rear-end collision occurred involving the respondent. Moore J. then failed to instruct the jury in his charge that the onus then shifted to the respondent to establish that he was not negligent. Instead, Moore J. emphasized throughout the charge that the onus was on the appellants to "establish the emergency and to establish that there's no negligence on the part of the defendant [respondent] leading to the emergency."

The Court of Appeal then applied the rear-end motor vehicle case of Graham v. Hodgkinson, which permits the court to set aside the jury verdict and substituted a finding of liability where the jury was not properly instructed about the defendant's onus. In turn, it was held that the jury verdict in this case should be set aside and substituted with a finding of liability against the respondents. Furthermore, the court of appeal acknowledged that it was justified in finding the respondent negligent without a new trial on liability, because his evidence failed to disprove his negligence.

(2) Yes. In a lengthy analysis and review of the relevant Rules of Civil Procedure, it was held that Moore J. erred in permitting surveillance evidence to be used at trial to impeach the appellant. Specifically, Moore J. permitted the respondents' counsel to play a video containing the surveillance evidence, cross-examine the appellant on its contents, and make the video an exhibit, even though the respondents had not disclosed the existence of surveillance in an affidavit of documents as required by the Rules and had not provided particulars of it.

On this issue, the appellants made three arguments, all of which were accepted by the Court of Appeal in its reasoning that the surveillance evidence should not have been used to impeach the appellant. Specifically, they argued that Moore J. erred in refusing their pre-trial request to order production of the respondents' affidavit of documents, or, at least particulars of the surveillance that the respondents would have been required to provide in answer to the customary discovery question on surveillance. Second, the appellants submitted that Moore J. erred in in permitting the respondents to use the surveillance evidence despite their failure to disclose its existence in an affidavit of documents, contrary to rule 30.08(1)(a) and in refusing to order the respondents' to provide the appellants with unconditional access to the full surveillance recordings. The appellants in their last argument claimed that Moore J. failed to instruct the jury on the proper use of the surveillance evidence in their deliberations.

In the Court of Appeal's address of the appellants' first argument, it held that the respondents conduct breached the following Rules of Civil Procedure: rule 30.03(1) by failing to serve an affidavit of documents, which is mandatory even where it is not requested by the opposing party; rule 30.07(b) by failing to disclose surveillance conducted after the matter was set down for trial in an affidavit of documents; and, inferentially, rule 31.09 obliging the respondents to correct answers given on an undertaking ultimately leading to the provision of surveillance particulars. Moreover, the court held that the trial management conference judge erred in failing to recognize these breaches, and in failing to order the respondents to serve an affidavit of documents disclosing the surveillance, or at least to disclose such particulars as are ordinarily provided through a discovery undertaking. Furthermore, it was held that the trial management conference judge should have offered the appellants an adjournment of the trial, which would have permitted the appellants to access at least some of the advantages of disclosure. Instead, the court held that Moore J. enabled the respondents to conduct a "trial by ambush", in a manner contrary to the Rules. The court also found that rule 48.04 does not provide an escape route to the respondents from their mandatory obligation to either serve an affidavit of documents to the appellants which discloses the surveillance, or at least disclose their particulars.

With respect to the appellants' second argument on this issue, the court found that the appellants objected at trial when the respondents first tried to introduce the surveillance evidence for impeachment. Once the objection was made, the court of appeal found that this created three sub-issues:

  1. whether Moore J. should have given the respondents leave under rule 30.08 to introduce the surveillance for impeachment, despite the lack of disclosure, even if it was only to be used for the purpose of impeachment.
  2. whether the respondents had laid sufficient groundwork for the admission of the surveillance for impeachment purposes, as required by the rule in Browne v. Dunn.
  3. whether the respondents impermissibly used the surveillance evidence for substantive purposes

In its reasoning on this first sub-issue, the court reviewed the relevant Rules, particularly 30.08(1)(a) and 53.08. Rule 30.08(1)(a) provides that if an undisclosed document is favourable to the party's case, "the party may not use the document at the trial, except with leave of the trial judge." Rule 53.08 applies to rule 38.08(1) and provides that "leave shall be granted on such terms as are just and with an adjournment if necessary, unless to do so will cause prejudice to the opposite party or will cause undue delay in the conduct of the trial." Applying rule 53.08, it was held that Moore J. ought to have found that the respondents had not properly asserted privilege over the surveillance videos, causing the appellants' significant prejudice. However, Moore J. failed to apply the test set out in rule 53.08, and if he had, he ought to have found that this prejudice could not be compensated for with costs and an adjournment, because the trial was well underway.  Therefore, Moore J. erred in admitting the surveillance videos for impeachment purposes.

On this second sub-issue, the court first held that Moore J. failed to hold a a voir dire on the fairness, representativeness and admissibility of the surveillance evidence, nor did he view the material before it was played for the jury and used in the appellant's cross-examination. In addition, it was held that Moore J erred again when he did not require the respondents' counsel to lay an adequate factual foundation that the surveillance evidence could be used to contradict, contrary to the rule in Browne v Dunn. Specifically, counsel did not elicit from the appellant the precise testimony as to the functionality of his injured left arm that each surveillance extract would contradict (before the surveillance videos were shown to the jury).

On the third sub-issue, the court held that despite Moore J.'s ruling that the surveillance evidence could only be used for impeachment purposes, three elements combined to effectively dissolve the distinction between impeachment and substantive evidence in the minds of the jury. The first was the evidence of the videographers, the second was the respondents' jury address, and the third was the jury charge.

With respect to the videographer matter, a videographer who created some of the surveillance videos of the appellant was permitted to be called to the stand, and he testified that he personally witnessed the appellant using his arm in a manner that showed he was not disabled. The court of appeal held that this evidence was substantive, rather than merely being used for impeachment purposes, and therefore its introduction at trial was not permissible under rule 30.09.

In the respondents' jury address, counsel made statements which suggested that the surveillance videos showed that the appellant was smiling while waving his supposedly injured left arm, and therefore he was not truly disabled as a result of the accident. The court of appeal held that these statements suggested to the jury that the surveillance evidence could be used as proof of the extent of the appellant's disability. Therefore, the respondents' jury address erased any distinction between the use of the surveillance for impeachment and for substantive purposes.

In Moore J.'s charge to the jury on the surveillance videos, he failed to provide them with any limiting instructions whereby the videos should only be used for impeachment purposes. This was a significant failure, given that the surveillance was being used to attack a finding of disability, which was a major point that the appellant needed to establish with evidence.

In sum, on the issue of the admissibility of the surveillance videos, the court of appeal held that they effectively were used to create a "trial by ambush", as Moore J. failed to exclude them from evidence under rule 30.08 and also made numerous additional errors, as described above. These errors, when taken together, were serious and critically impaired the fairness of the trial. The court of appeal held that the damages verdict cannot stand. This was set aside and a new trial on damages was ordered.

(3) Yes. It was held that Moore J. failed to perform his gatekeeping function in relation to this evidence in a number of respects. Specifically, he allowed respondents' counsel to project excerpts from a doctor's medical report about the appellant's injuries onto a screen, which was displayed to the jury, while cross-examining the appellant. In sum, this was found to be improper by the court of appeal for the following reasons. Specifically, counsel did this before the medical report was admitted into evidence. Furthermore, it was found that the projected words distracted the jury from focusing on the appellant as a witness, and this carried great weight. Moreover, it was held that this type of cross-examination relied on the relied on the hearsay value of the medical reports before they had been properly admitted, because counsel presented the words in the reports as true. In turn, this allowed the respondents to attack the appellant's credibility in a manner that side-stepped their obligation to comply with the rule in Browne v. Dunn. The impression this left on the jury could not be undone.  Finally, the court of appeal found that this approach to cross-examination allowed the respondents to get around the requirement in section 52 of the Evidence Act to choose between filing a medical report as evidence or calling the medical practitioner as witness. As the practitioner was later called as a witness, section 52 was effectively breached by the respondents.

(4) Yes. Given the errors above by Moore J. with respect to the admissibility of the surveillance videos, it is unclear whether he used inadmissible evidence in his finding that the appellant had not proven that he had a permanent impairment of a physical or psychological function caused by the accident. This threshold ruling, pursuant to section 267.5 of the Insurance Act was set aside. The court of appeal held that it will be the task of the trial judge at the second trial to consider this issue only if the respondent chooses to bring a threshold motion on this issue.

(5) Yes. Moore J. awarded the respondents partial indemnity costs to the date of their "substantial" offer to settle on March 12, 2012, and substantial indemnity costs thereafter, for a total of $255,000. Since the appeal is allowed, this costs disposition is set aside.

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