In a decision that will be of great interest to the insurance and personal injury bar, the Court of Appeal today released its reasons in McIntyre v. Grigg et al. In this case, the plaintiff was a pedestrian who suffered a fractured femur, a head injury and other injuries when struck by a car driven by Andrew Grigg, a member of the Hamilton Tiger-Cats, in a 1996 accident. Mr. Grigg had been drinking at a campus bar at McMaster University. Afterwards, he was found to have had a blood alcohol reading two to three times more than the legal limit.
The majority of the panel (Chief Justice Roy McMurty and Justice Janet Weiler), the Court upheld an award of punitive damages against the driver, Grigg. The punitive damages award made at trial by the jury was $100,000. The Court of Appeal reduced it to $20,000. In doing so, the majority acknowledged that:
This is a novel case. The parties were unable to produce any Canadian case law in which punitive damages were awarded as a result of injuries sustained in a motor vehicle accident caused by an impaired driver nor were they able to produce any appellate authority that prohibited such damages in this context.
The majority rejected various defence arguments:
- that to qualify for punitive damages, the plaintiff would have to show that the defendant’s conduct was specifically directed at the plaintiff;
- that the defendant driver had already been punished, as he had been convicted of careless driving and fined $500 ;
- that the driver’s conduct did not satisfy the test of being “high-handed, malicous or oppressive”.
However, it did accept the defence submission, that an award of $100,000 for punitive damages did not meet the “rationality test”, in that it would not be proportionate to the defendant’s misconduct. Accordingly, the award was reduced to $20,000.
Mr. Justice Robert Blair, who concurred with the majority on most issues, dissented on the disposition of the punitive damages issue. He felt that “punitive damages do not serve a rational purpose in the circumstances of this case, and, generally, in cases of this particular nature”. He pointed to the wording of the standard Ontario auto policy and observed that punitive damages appears to be within the coverage, with the result that no deterrent or punitive effect is achieved. This is because the misbehaving driver would not be the one paying the damages. Instead as Justice Blair said, “all automobile-owning members of society will effectively be ‘punished’ for the conduct of Mr. Grigg and comparable drivers.”
Justice Blair also warned that once the door has been opened to punitive damages in drunk driving cases, such awards, which he described as “a complete windfall for the plaintiff”, might become more commonplace.
The court unanimously struck down the jury’s award of aggravated damages, in the amount of $100,000. It held that such damages are intended to compensate the plaintiff “when the reprehensible or outrageous nature of the defendant’s conduct causes a loss of dignity, humilitation, additional psychological injury, or harm to the plaintiff’s feelings”. They are not to be awarded separately from general non-pecuniary damages but in fact, are part of the latter head of damages.
In this case, the general non-pecuniary damages were assessed at $250,000, which the Court acknowledged was “perhaps generous and at the high end of the range”. Adding $100,000 in aggravated damages would have taken the total award well above the “cap” established by the Supreme Court of Canada, which was then about $300,000.
In addition, the three members of the panel found that the evidence had not established that the plaintiff’s psychological condition had been worsened by the fact that Grigg was impaired at the time of the accident.
Accordingly, the award of aggravated damages was set aside in its entirety.
The Court dealt with several other issues, summarized only briefly here. The jury had awarded no damages to the FLA claimants. The Court of Appeal allowed an appeal by these plaintiffs and awarded damages of $15,000 to each of the plaintiff’s parents and $5,000 to her sister. (There was no mention of the Insurance Act deductibles.)
The Court dismissed the defence appeal against the amount of the non-pecuniary general damages award ($250,000). It also dismissed an appeal by the McMaster Student Union, which, as operator of “The Downstairs John”, the licensed establishment at which Grigg had been drinking before the accident, had been found 30% at fault. The Court did concede that this apportionment was “perhaps at the high end”.
The Downstairs John also appealed what it said was a direction given by the trial judge to the jury, that the bar faced “absolute liability” for having over-served Grigg. The Court of Appeal found that there was evidence on which the jury could properly have found the bar 30% at fault. But while it did not agree with the suggestion that the liability of a licensed establishment is “absolute”, it did not emphatically disavow that proposition either. Rather, the Court said that “it is more accurate to characterize the liability under s. 39 [of the Liquor Licence Act] as a statutory liability arising once the factual pre-conditions provided for therein have been found to exist.”
But it is probably the opening of the door to awards of punitive damages in this commonly-seen type of case that will cause insurers the most concern. If such awards can be made in cases of impaired driving, might not other types of conduct be treated the same way?