C.A. Upholds Big SABS Judgment

This week, the Court of Appeal released its ruling in Monks v. ING Insurance Company of Canada. This was a claim for statutory accident benefits brought by, ironically, a woman who, prior to her injury, had worked in the insurance industry. At the 2005 trial, Mr. Justice Paul F. Lalonde was quite critical of ING in the course of awarding very substantial damages to the plaintiff. These took the form of declarations of entitlement to various types of benefits, past and ongoing, as well as an award of aggravated damages in the amount of $50,000.

The sole ground upon which ING’s appeal was allowed was in relation to a $75,000 risk premium that had been awarded by Justice Lalonde. The trial decision pre-dated the Supreme Court of Canada decision in Walker v. Ritchie and the Court of Appeal’s ruling in The Manufacturer’s Life Insurance Co. v. Ward. Both courts held that risk premiums cannot be awarded. So, this part of the C.A. decision was pretty much a foregone conclusion.

The decision of the court was written by Justice Eleanore Cronk. (The other members of the panel were Justices Eileen Gillese and John Watt.)

Ms. Monks had been injured in three separate car accidents over the course of six years. The first was relatively minor but the second was more serious. At the time of the latter, she was insured by Zurich Insurance and sued for accident benefits as a result of neck injuries suffered in that accident. That litigation was still ongoing when the third accident happened. The injuries from that accident at first seemed minor but, over time, Ms. Monks underwent spinal decompression surgery and eventually became an incomplete quadriplegic. She was insured by ING at the time of the third accident.

Zurich Insurance settled the claim arising from the second accident but by the time the settlement was completed, ING had bought Zurich’s personal lines and it ended up being ING that made the payment ($1.275 million) in settlement of the litigation arising out of the second accident.

Shortly after that settlement, ING, which had been paying benefits to Ms. Monks in relation to the third accident, terminated those payments, on the basis that Monks was not catastophically impaired. Ms. Monks sued.

Evidently, ING changed its position once the litigation began. It admitted that Ms. Monks was catastrophically impaired, but contended that this was a result of the first two accidents and a pre-existing spinal condition.

One of the big issues on the appeal was whether the trial judge could declare, as he did, that the plaintiff was entitled to benefits on an ongoing basis (as opposed to merely declaring her entitlement to past benefits). The Court of Appeal found that the declarations with respect to future entitlement were proper. However, its finding rested, in part, on the fact that at trial, ING had conceded that a declaration as to future entitlement could be made, so long as the benefits were not quantified. The Court of Appeal noted that the trial judge had done exactly what ING said he was entitled to do.

Justice Cronk went on to observe that the declarations by Justice Lalonde “co-exist with the scheme envisaged by the SABS for the determination of accident benefits….The result of this finding, which underpins the challenged declarations, is that Ms. Monks is entitled to the ongoing benefits in question subject to proof, in accordance with the SABS, of specific expenses falling within each category of benefits.” In other words, Ms. Monks would still have to prove the amount of her entitlement, but it would be up to ING to prove that she is entitled to payment.

ING also alleged, in the Court of Appeal, that the trial judge had been biased against it. This is always a tough argument to make on appeal and this case was no exception. The Court of Appeal accepted that the trial judge had been, at times, “blunt” and even “harsh” in his findings about the defendant and its expert witnesses. But, said Cronk J.A., “these are matters squarely within the trial judge’s domain.” This ground of appeal did not succeed.

Another ground of appeal was that the trial judge had erred by applying the “material contribution” test of causation instead of the “but for” test. But, as the Court of Appeal pointed out, ING had itself argued at trial that the plaintiff had only to show that the third accident had “significantly contributed to the severity or duration of the plaintiff’s symptoms”. [Emphasis ING’s.]

Further, the Court said that the use of the material contribution test in an accident benefits case was in keeping with the caselaw and that ING had not adduced any authorities to the contrary.

Finally, ING failed to persuade the Court that the trial judge had erred in his treatment of the deductibility of the proceeds of the Zurich settlement nor in making an award of aggravated damages.

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6 Responses to C.A. Upholds Big SABS Judgment

  1. David Cheifetz says:

    The immediately significant aspect of Monks, in my view, appears in paras. 94 & 95 – the statement that the crumbling skull doctrine is not part of causation jurisprudence under the SABs. The trial judge said that, the Court of Appeal agreed.

    “[94] At trial, ING argued that this was “a classic, unequivocal case of a crumbling skull Plaintiff” and, therefore, that ING need only pay “for those expenses for those injuries caused by our accident, being a cervical strain”, which expenses had already been paid. The trial judge rejected this argument, holding at para. 852: “[T]here is no room for the crumbling skull theory in accident benefit cases.”

    [95] I agree. There is no indication in the SABS of a legislative intent that an insurer’s liability for the accident benefits in issue in this case should be subject to discount for apportionment of causation due to an insured’s pre-existing injuries caused by an unrelated accident. The SABS simply states, in clear and unambiguous language, that an insurer “shall pay an insured person who sustains an impairment as a result of an accident” medical, rehabilitation and attendant care benefits (ss. 14(1), 15(1) and 16(1)).”

    Thus, what we have is the C.A. saying that SABs factual causation may be proved on the basis of but-for or material contribution, but, by the way, but it doesn’t matter if the nature of the persons pre-existing problems is such that the post-accident condition would have existed regardless of the accident. The small problem with that state of affairs is that if the post-accident condition would have existed anyway – which is all that “crumbling skull” means: that the post accident condition was necessarily inherent in some pre-existing condition – then the post-accident condition wasn’t caused by the accident, whether you use but-for or material contribution.

    The point is that if the post-accident condition would have existed anyway, then it isn’t an impairment sustained as a result of the accident, no matter how we parse “as a result”.

    I wouldn’t make too much out of the unusual usage of “apportionment” in the phrase “apportionment of causation”. I expect that all the court meant was the process of trying to figure out what caused what, rather than any technical meaning of apportionment.

    However, as the C.A. said, we’re dealing with a statute and if the statute says that one and one doesn’t equal two, then that’s what the statute says.

    Para 95’s comment about legislative intent. Consider that the C.A.’s shot across the S.C.C.’s bow, given what the S.C.C. did in Vytlingam and Herbison.

    I figure this one is headed for Ottawa.


  2. David Cheifetz says:

    The other aspect of Monks is this.

    Notwithstanding the apparent views of some members of the Court of Appeal Resurfice DID change something very basic about tort causation. It introduced, into at least Canadian negligence law, a generally available method of satisfying the causation requirement in tort which is based on fault and possibility, not fault and probability. By “generally available”, I mean that this method is applicable to all causes of action based on negligence where there is fault and, for the reason set out in Resurfice (whatever that reason means) it is impossible for the plaintiff to establish causation using the but-for test.

    Resurfice calls this the material-contribution test. Where the requirements of the Resurfice material contribution test are satisfied, all other requirements for liability in negligence are also satisfied, liability may be imposed on the defendant even thought the but-for test cannot be satisfied on the facts. That is, liability may be imposed even though the facts do not establish, on the balance of probability, that the negligence of the defendant is a probable cause of the injury.

    The Resurfice material-contribution test, whatever it ends up meaning, is obviously not the Athey-material test which was used to establish that conduct was a probable cause of the injury. (Don’t take my word for it. Take the word of the B.C.C.A. in Sam v. Wilson, 2007 BCCA 622 at para. 109. Or, better yet, read Prof. Russ Brown’s “Material Contribution’s Expanding Hegemony: Factual Causation after Hanke v Resurfice Corp” 2007 45 Canadian Business Law Journal 432).

    What, then, is the status of the version of the material-contribution test – Sam v. Wilson calls it a “standard” – that Athey created? Resurfice doesn’t say. Whatever it meant, it meant something different from the traditional but-for test. Resurfice says that the “traditional” but-for test – the Snell version, no doubt – is the primary, basic version. Resurfice formally says nothing about the existence of any other “flavour” of a test for factual causation, though seems to leave the door open for the existence of other flavours. (Those you who know anything about quantum mechanics will realize why I’ve used “flavour” rather than “version”.) In addition, the S.C.C. recast one of the two known fact variations on orthodox but-for – the rule in Cook v. Lewis – as an example of facts that trigger the new material-contribution test.

    The Court of Appeal could have said, correctly, that SABs causation jurisprudence borrows from tort causation jurisprudence but need not be equivalent, because, ultimately, the answer to the question “what is the required level of connection between the accident and the impairment” is whatever the SABs regulation says it is. That’s undoubtedly what the C.A. meant. That’s implicit in the comments about legislative intent in para. 95 of Monks and the C.A.’s conclusion that the “crumbling skull” principle is not part of SABs causation given the wording of the SABs regulation.

    However, that’s not, actually, the way the C.A. put it. It said (1) both the but-for tests and the material-contribution test are available to prove causation in the SABs regime; and (2) clearly referring to the material contribution test created by Athey, that Resurfice didn’t change anything about the basic principles of causation.

    Well, with all due respect to those members of the C.A. who believe otherwise, Resurfice did change something basis, as I have said above. It changed the meaning of “the material-contribution test”. So, unless we understand Monks to mean that SABs jurisprudence on causation, in Ontario, has now taken its own path, with “a material-contribution test” meaning what it did before Resurfice – that is, having the Athey meaning – the material-contribution test that Monks says is part of SABs jurisprudence will have the Resurfice meaning.

    Ask yourself: Did the C.A. really intend to convert the phrase “shall pay an insured who sustains an impairment as a result of an accident” into the phrase, “shall pay an insured person who possibly sustains an impairment as a result of an accident, even if it cannot be shown that the person probably sustained an impairment”?

    It is highly unlikely that the Court intended that in Monks; however that is the result of Monks if the material-contribution test which is part of the SABs jurisprudence has the meaning given to that test in Resurfice.

    Here’s one last item for the cauldron which shows that the charm isn’t quite firm and good.

    Despite what the S.C.C. said in Athey about material contribution applying only where the but-for test was unworkable, the S.C.C. later held in Walker Estate – Major J. wrote both judgments, don’t forget – that Athey material contribution COULD apply, in some situations, to allow the plaintiff to prove factual causation, even though the but-for test also applied and also established factual causation. Is Walker Estate also part of SABs causation jurisprudence?


  3. David Cheifetz says:

    By coincidence, a very nice summary of the workings of “crumbling skull” and “thin skull”, even in the context of a material-contribution test of the Athey-form, just appeared in the B.C.S.C. judgment, Fisher v Stone 2008 BCSC 430:

    Look at paras. 53-59, particularly para. 57: “In my view, the totality of the medical evidence and the observations of those who knew Ms. Fisher throughout the period of time before and after all three accidents does not support a conclusion that she had a pre-existing condition that would detrimentally affect her in the future, regardless of Mr. Stone’s negligence.”

    So, we need to ask ourselves: at least logically, in SABs jurisprudence where:

    1. accident means ““an incident in which the use or operation of an automobile directly causes an impairment or directly causes damage to any prescription eyewear, denture, hearing aid, prosthesis or other medical or dental device”


    2. the insured person becomes eligible for SABs where the insured person “sustains an impairment as a result of an accident”

    how can “directly cause” and “sustains an impairment as a result of” be interpreted to include an impairment which would have existed even if the accident had never occurred?

    One would think, logically, that they cannot be. However, the C.A., in Monks, has ruled they can be, because, according to the C.A. that is what the SABs regulation means. I repeat what the C.A. wrote in para 95: “There is no indication in the SABS of a legislative intent that an insurer’s liability for the accident benefits in issue in this case should be subject to discount for apportionment of causation due to an insured’s pre-existing injuries caused by an unrelated accident.” Actually, there is: the very words of the SABs regulation, themselves, when properly interpreted. At the least, I would have thought that “directly causes” is a good hint to be careful about the scope of the legislation, even giving it a purposive reading, particularly after what the S.C.C. did in Vytlingam and Herbison.

    However, the C.A. has the last word on this, at least until the S.C.C. speaks, or the Legislature clarifies. As Humpty Dumpty said, ultimately, meaning is about power. That doesn’t make it right but it is the way the world works.

    That completes the trilogy.


  4. David Cheifetz says:

    The Hitchhikers’ Guide being what it is, let’s add this 4th comment, dealing with the SABs causation issue, picking up where the 2nd comment ends: the but-for issue.

    This is para 92 of the Court of Appeal’s reasons:

    [92] In any event, I agree with Ms. Monks’ submission that the evidence of Dr. Lesiuk could have grounded the application of the “but for” causation test as well as the material contribution test and that, if the former test had been applied, the outcome would have been the same. Dr. Lesiuk, for example, testified that: “[T]he ultimate outcome of the things that happened to her had the potential to be different had this accident not occurred. And the outcome of everything that happened if the accident had not occurred could not be reliably predicted to be the same.” I am satisfied that the evidence and the trial judge’s reasoning and findings support his conclusions on the basis of a “but for” analysis.

    Did the Ont CA really mean to imply that BOTH the Athey material-contribution and the standard but-for could be properly applied to establish that Ms Monks new post Dec 23/98 problems were “directly caused” by the Dec 23/98 accident?

    Whatever else the facts of Monks are, I doubt very much they could be said to invoke the principle in Walker Estate, even if we assume that Walker Estate is also part of SAB’s jurisprudence.

    In any event, with the trial judge accepting the evidence of Dr. Lesiuk, and if the new post Dec. 23/98 problems were caused by the Dec 23/98 accident on but-for basis, then there could never have been a “crumbling skull” issue of any type to have to consider.


  5. marc binavince says:

    The Court of Appeal likely meant by apportionment of causation to refer to the fact that the crumbling skull doctrine involves reducing damages (usually by no more than 25%) when def can prove by preponderance of evidence that injury giving rise to damages would have occurred anyway, simply as a result of the passage of time. In tort, this fact if proven is sufficient under the doctrine to entitle def to a de facto apportionment of causation (say 25%) to a non tortious cause and a corresponding reduction in damages, not unlike how the contrib doctrine starts with an apportionment of causation to the plaintiff’s negligence and then reduces the damages entitlement pro rata.

    I am not troubled by the logical deficit between Monks and a certain reading of the SABs legislation.

    The scheme is no-fault, so I agree with the CoA and lower court: why import crumbling skull into it which is, as I have suggested above, a close cousin to the (fault based) contrib doctrine?

    Further CS does not even negate (it only reduces) liability to pay in tort actions, actions where plaintiffs are looking to third party ins cos for payment. Why should it negate or reduce in AB where 90% of the time the plaintiff is trying to recover under the very policy she has been paying premiums under?

    I wouldn’t get too hung up on the Court’s logical lapses as to causation (if any). Even Aquinas got tangled up in the doctrine of causation, is it fair to expect the CoA to do better?

    I think it was Oliver Wendell Holmes who said that the life of the law has not been logic, but experience.

  6. marc binavince says:

    Causation in a SABs claim when there is a pre-existing condition that might in tort give rise to a CS reduction can be considered in following way: imagine a claimant who in 2009 has pre existing back pain at 2/10 who is working and who can expect the pain to increase by 1 point every 5 years and who will be unable to work when it hits 7/10.

    Claimant has MVA in 2010 and his injuries immediately put him at 7/10 in back pain with an increase now of 1 point three years.

    The MVA has directly and solely caused an exacerbation of pre existing back pain and since Monks, it is no answer for AB insurer to say “there are non MVA causes so we don’t have to pay benefits”.

    In the hypothetical, there are non MVA causes of the overall back pain but claimant can’t work in 2010 b/c of MVA alone. Since Monks, I don’t think insurer can cut him off IRBs at the date his pre MVA back troubles would have caused him to lose ability to work even if MVA had never happened.

    This is a good thing.

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