In personal injury cases there is usually a need to rely on evidence from a doctor or other health practitioner to determine the extent of injuries. However, for any number of reasons the injured party might not be eager to undergo a medical examination. Where a medical examination (which can be physical or mental) has been refused, there are steps that lawyers can take to get a court order requiring a medical examination be completed by the injured party. The penalty for non-compliance is serious, and if the injured person is a plaintiff, can include the dismissal of their case.
Daggitt v Campbell, decided in April, 2016 by the Ontario Superior Court addresses court ordered medical exams. The case deals with an unfortunately common situation. The plaintiff was injured in a car accident, and their injuries lead to a decline in mental health. Before the hearing the plaintiff had already agreed to several medical exams, and completed a treatment program for both chronic pain and mental health. After treatment the plaintiff was examined by a physiatrist and an orthopaedic surgeon and no further treatment was recommended. The defendant wanted another medical exam, this time to be performed by a psychiatrist. The court did not grant the defendant’s request.
The decision is highlights some of the issues faced in the courtroom when asking for a court ordered medical exam. In order for a judge to require a medical examination they will want to be sure that it is legitimately necessary and that without it the trial process will be unfair. In determining whether to require a medical examination, a judge will assess a complex set of factors. Some of these factors are: the risk of delaying the trial, giving both sides an opportunity to present evidence on an issue, and expense. Where there were prior medical examinations, the judge will also want to hear from a health practitioner about why a subsequent examination is necessary. If a lawyer does not convincingly address those factors, then, a judge will be resistant to finding in their favour. In this case, the defendant simply did not provide enough evidence about why the further medical exam was necessary.
The decision also serves as a reminder that it is important to pick the right expert. Not all experts will bring the same credibility to the courtroom. Some develop a reputation for favouring their own client, instead of being fair, objective and nonpartisan. This type of biased expert is sometimes referred to as a “hired gun”. If the judge perceives that a party wants to use a “hired gun” to do a medical exam, they may not allow the medical examination to be conducted by that expert.
In some instances when a contract is breached, there is an obligation on the parties involved to take steps to limit their losses. This rule, which is referred to as the duty to mitigate, exists to reduce inefficiencies that would be generated if parties thought courts would guarantee their losses. It also stops the parties from maliciously incurring losses.
In Howard v Benson Group Inc. the Ontario Court of Appeal recently considered the duty of an employee on a fixed term employment contract to mitigate losses. In this case, an employee signed a five year, fixed term, employment contract. Two years into the contract, the employer dismissed the employee without cause. The employee claimed they were entitled to three years of unpaid salary and benefits – the amount they would have received if the contract were completed. The employer claimed that they were only required to pay two weeks salary in lieu of notice.
In the initial judgement the employee was only entitled to “common law reasonable notice”, an amount less than three years of salary and benefits. The same judgement also found that the employee had a duty to mitigate their losses. This meant that severance paid to the employee would be discounted by the amount a court determined the employee could have earned before the severance period was up.
The Court of Appeal overturned the initial judgement. The Court of Appeal ruled that the employee was entitled to three years of salary and benefits, not just common law reasonable notice. This is because although there was an early termination clause in the contract, it was too ambiguous to be enforceable. The Court of Appeal noted that where there is no early termination clause in a fixed term employment contract, courts will assume the termination date is the end of the contract. Since the termination date was fixed by contract there was no need for common law reasonable notice.
The Court of Appeal also found that there was no need for the employee to mitigate their losses. Though this may be seen by some as creating a windfall for the employee, the Court of Appeal did not see it that way. Instead, the Court noted that in these types of cases damages are seen as predetermined by the contract. Damages are set either by the early termination clause, or in the absence of such a clause, the court will assume it is the amount left to the completion of the contract. The Court reasoned that since the amount is predetermined it is unfair to give the employer a discount by saying the employee is required to mitigate their losses.
Ontario Court of Appeal Clarifies Possible Defendants for Misrepresentation in Take-Over Bid Circulars
The issuers of take-over bid circulars should take notice of the recent Ontario Court of Appeal decision in Rooney v ArcelorMittal S. A. The case deals with the statutory right of security holders, which is created by subsection 131(1) of the Ontario Securities Act, to sue for misrepresentations made in take-over bid circulars.
In the context of a hostile take-over bid in the ore industry, the security holder sued both the offeror (corporate) and the offeror’s directors or others who signed the offering memorandum (individuals) for misrepresentation. The offeror and its directors took the position that the security holder could sue either the offeror or its directors, but not both.
A lower court held that the security holder had to choose between bringing an action against the offeror or its directors. Based upon an analysis of the rules of statutory interpretation, this decision was overturned on appeal, with the result that the security holder is not restricted to suing only one of the offeror or its directors. Accordingly, Rooney v ArcelorMittal S. A. clarifies who may be targeted in a lawsuit for a misrepresentation in a take-over bid circular.
The Court of Appeal reasoned that if the security holder is permitted to sue only one of the offeror or its directors the security holder is put in a difficult position. If only the offeror is sued, then there is a risk the offeror could go bankrupt before the security holder recovers. If only the directors are sued, then there is a risk they will make themselves judgement proof. The Court of Appeal determined that neither of these scenarios advances the cause of investor protection, which is the purpose of the Securities Act.
The Court of Appeal also clarified that the statutory right of action on misrepresentation in a take-over bid circular is only available to those who have tendered to the offer, and not those who traded securities in the secondary market. This is because remedies for those selling in the secondary market are available elsewhere in the Securities Act.
“If you took a poll of Ontarians who have had occasion to frequent the ServiceOntario outlets that dot the Province, there is little doubt that the overwhelming majority would hold the view that the operations were “government” owned and operated. Nothing could be further from the truth.” said Gans, J. in Mayotte v Ontario, 2016, a recent decision on the payment of ServiceOntario Operators. The Province pays businesses to operate ServiceOntario branches on a per transaction basis, with the Province controlling the standards and rates of pay.
The case arose because some Operators started a class action against the Province alleging that they had been underpaid and that compensation reviews were not done in good faith. The decision is important because it deals with the duty of good faith in a contract between business and government – an area familiar to Davies Howe Partners LLP, whether expropriation or development related.
It was determined that the Province owes a duty of good faith to those with whom it does business. However, what is important to recognize is that the duty of good faith is process, not outcome, oriented. This is especially true where the government makes no promises about what the outcome of doing business with it will be. For example, in Mayotte the government never guaranteed a minimum yearly income. Instead, Operator profits were determined by a formula that was largely dependent on the number of transactions processed and Operator efficiency. The Province was never dishonest in describing the formula. During compensation reviews, the Province was seen as understanding of Operator issues, but ran into budgetary limitations when it came to pay increases. As a result, it was decided that the Province did not underpay and did not act in bad faith.
What can be learned from Mayotte is: without a representation or warranty about expected income from a government contract, the duty of good faith is limited to acting honestly during the course of negotiating contracts.
New legislation intended to curb Strategic Lawsuits Against Public Participation (SLAPPs) was recently put to the test in a decision on a motion allowing a developer to continue its breach of contract case following an OMB hearing. This represents the first reported decision under the Protection of Public Participation Act, 2015 which was passed in November, 2015.
In 1704604 Ontario Ltd. v. Pointes Protection Association et al., representatives of a residents’ group entered into a memorandum of understanding with the would-be developer of a subdivision. The memorandum included a provision that at any hearing before the OMB, the residents’ group would not take the position that the local Conversation Authority, which provided an approval with respect to impacts to an on-site wetland, acted illegally, invalidly, or contrary to their mandate. Despite the contract, the developer alleges, a member of the residents’ group gave evidence before the OMB that the development would result in a loss of wetland and cause significant environmental damage. The Board refused the subdivision application.
Following the OMB hearing, the developer sought damages in Court for the alleged breach of contract. The residents’ group then brought a motion to dismiss the action under the anti-SLAPP legislation. The new provisions allow a Court to dismiss an action if the moving party proves that the lawsuit arises from an expression made by the person that relates to a matter of public interest. The residents’ group successfully met this burden.
The legislation then shifts the burden to the respondent, here the developer, to prove there are grounds to believe that (i) the proceeding has substantial merit, and (ii) the moving party has no valid defence in the proceeding. The responding party must further prove that the harm likely to be suffered by the responding party as a result of the moving party’s expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.
In this case, the developer was able to show that there were grounds to believe that the breach of contract proceeding had substantial merit. Further, since a defence to the breach of contract proceeding had yet to be proffered by the residents’ group, the Court was unable to determine the existence of a valid defence. The judge resolved the test balancing the public interest in favour of the developer.
The judge was critical of the new legislation, commenting, “I was surprised to find this legislation buried in the Courts of Justice Act given the substantive nature of its provisions and the significance of the remedies provided in it. I would have thought it would be stand-alone legislation or part of the legislation to which it is most applicable, such as the Libel and Slander Act”. Also problematic was that there is no definition for the term “a matter of public interest”. Lastly, and most importantly, the Judge commented that the bar that the responding party, here the developer, must meet to save their case from early dismissal is low. In the Judge’s words, “In my view, the threshold for the responding party to meet the test … must be a low one given the significant remedies in Section 137.1 and the protection for litigants to bring legitimate claims before the court.”
In Feldstein v 364 Northern Developments Corporation, an employer was ordered to pay a former employee $83,336.80 in lost long-term disability benefits and $10,000.00 in aggravated damages, totaling $93,336.80.
As part of an employment package, an employee wanted benefits up to a maximum of $5,000.00/month. To qualify for this rate, the employee was required to demonstrate “Proof of Good Health” – also known as evidence of insurability – through an application/questionnaire process. The employer wrongly advised the employee that “Proof of Good Health” would be provided solely through working for the company during the three month coverage waiting period without illness or injury.
When the employee became ill and applied for long-term benefits, he discovered that he only qualified for a non-evidence maximum benefit of $1,000.00/monthly (before CPP deduction), because he had not submitted the required evidence of insurability information to the insurer. The damage award addresses the shortfall between what the employee received from the insurer and what he would have received if the employer had given him correct information. The award covered a period of 40 months.
The Court’s decision is based on the finding that the employee would not have accepted the employment if he had known the long-term disability benefit would be at the lower rate. The employee had been diagnosed with Cystic Fibrosis as a child, and was aware that the illness could strike at any time making long-term disability coverage an important issue to him in considering employment.
Having practised litigation for several years, I have come to realize that there are several websites which are essential to any litigators practice. These are the websites which I wish someone had told me about when I first began practicing and which I have come to rely upon. I provide them to you now in hopes of making your life as a young litigator a little easier.
To see the websites and the full article on oba.org click here.
On December 1, 2014, Ontario once again tabled legislation targeting litigation brought for the purpose of stifling debate on matters of public interest, known as Strategic Litigation against Public Participation (“SLAPP”).
A SLAPP lawsuit typically involves a defamation claim against an expression made by the defendant that is contrary to the plaintiff’s interests. Proponents of anti-SLAPP legislation say these lawsuits are usually meritless and are brought by wealthy corporate entities against individuals or community groups for the purpose of discouraging public opposition.
When it comes to the serving materials on a large number of respondents—whether it’s a few dozen, a few hundred, or more—the reported case law is extremely sparse. There is little guidance on appropriate methods of substituted service for groups of this size, let alone guidance on dispensing with service altogether.
In a recent unreported Superior Court of Justice decision, we were successful in obtaining an order dispensing with service on about 700 respondents so that a developer could proceed with its plan to build a subdivision.
The standard test to dispense with service under Rule 16.04(1) of the Rules of Civil Procedure has two prongs: it must be impractical to effect prompt service (meaning all reasonable steps have been taken to locate and serve the parties), and it must be in the interests of justice to dispense with service.
However, with a large group of respondents, what “reasonable steps” should an applicant be expected to take? Even if the applicant knows the location of each respondent and is able to serve them, it may not be reasonable in the circumstances to take any steps if the logistics and costs of service are prohibitive. However, reasonableness will also depend on the second prong of the test: the interests of justice.
The interests of justice take into account the interests of both the respondents and the applicant (although on an ex parte motion of this sort, greater weight will be given to the respondents’ interests). How will the proceeding affect the parties’ legal rights? Are serious allegations being made? How will success or failure impact the parties, financially or otherwise?
In the proceeding at hand, the applicant developer was seeking to delete an easement over its lands that was registered on title for hundreds of lots in an adjacent subdivision. This easement was preventing the development of the applicant’s subdivision. The easement, made years earlier, allowed the developer of the adjacent lands to run utility pipes under the applicant’s land. However, through an error, the easement had carried over to each of the lots in the adjacent subdivision.
Removing the easement would technically alter the respondents’ property rights, but without any negative legal or practical effects. Further, service on such a large (and in this case, indeterminate) number of respondents would have been possible but very costly. Therefore, the presiding judge granted our motion to dispense with service.
The decision shows that when an applicant seeks substituted service or no service for a large group of respondents, the court will tend to take a contextual and practical approach. Ultimately, it will weigh the impact on the respondents if the service requirements are relaxed or eliminated (e.g. potentially not receiving notice and judgement being given) with the impact on the applicant if service is required (e.g. creating a significant barrier to relief).
By: Kyle Gossen
In a recent unreported decision won by Robert Richler of Davies Howe Partners LLP, the Small Claims Court re-affirmed the law regarding addition and substitution of parties in Small Claims Court proceedings, and awarded significant costs against the Plaintiffs whose counsel brought a motion to do so on the eve of trial.
The Plaintiffs’ motion sought to add our client to the main action well after the expiry of the applicable limitation period. As an alternative argument, the Plaintiffs’ lawyer suggested that the court could substitute the non-party into the shoes of one of the existing Defendants if the Court was not prepared to simply add our client as a Defendant. The Court recognized that the Plaintiffs’ true intent was to keep both parties involved in the action and dismissed the motion.
The Court also considered the timing of the motion and re-affirmed that existing law that the Small Claims Court will not add non-parties to small claims litigation on the eve of trial.
In the same decision, the court clarified the limits of “discovery” in Small Claims Court proceedings. The Plaintiffs brought a second motion on the eve of trial requesting that the Defendants disclose a significant number of additional documents. For all intents and purposes, the Plaintiffs abandoned their motion against one Defendant prior to the hearing of the motion but pursued the motion against the co-Defendant. After hearing arguments from the parties, the Court affirmed that the appropriate time to bring motions for disclosure of documents in Small Claims Court proceedings is during the settlement conference process. After that time, the Court has no jurisdiction to make such orders.
By: Robert Richler