The Supreme Court of Canada has today released an interesting decision in which it has reaffirmed the standard of review to be applied by appellate courts in Canada : “palpable and overriding error”. In H.L. v. Canada (Attorney General), the Court also discussed a couple of other issues of some interest to the personal injury bar, both having to do with the assessment of damages for future income loss.
Standard of Review
Mr. Justice Fish wrote the majority decision and began his reasons in language reminiscent of Dragnet’s Joe Friday: “Our concern is with all of the facts, and nothing but the facts: with facts proved directly and with facts inferred, but not with questions of law or questions of mixed law and fact.”
In this case, the Saskatchewan Court of Appeal had reversed the decision of the trial judge. The action was one by an aboriginal man who claimed to have been sexually abused some twenty years earlier by an employee of the federal Department of Indian and Northern Affairs. The plaintiff (“H.L.”) claimed that the abuse had led him into alcoholism, which in turn had prevented him from being able to find steady employment. H.L. had been incarcerated on several occasions and he blamed this too on the sexual abuse.
The trial judge had largely ruled in favour of H.L. He awarded non-pecuniary damages and for both past and future pecuniary damages (income loss). The award totalled almost $400,000.
The Saskatchewan Court of Appeal took quite a different view of the case. It did not disturb the award of non-pecuniary damages ($85,000), but concluded that no pecuniary damages should be recoverable. What is of interest, in the context of “standard of review”, is that the Saskatchewan Court of Appeal did not believe that the test applicable to its consideration of the case was that of “palpable and overriding error”, as the Supreme Court had previously held it to be in Housen v. Nikolaisen,  2 S.C.R. 235. The Saskatchewan Court of Appeal concluded that the passage of that province’s Court of Appeal Act, 2000 had given it far broader powers of review. While it acknowledged that it could not substitute its own findings with respect to credibility for those of the trial judge, it considered that its power to review was not so limited when it came to findings of fact or mixed findings of fact and law. The Saskatchewan Court of Appeal concluded that it had a right to conduct a re-hearing on these issues, and to substitute its own views for those of the trial judge.
Not so, said the Supreme Court. In rather sharply-worded language, Mr. Justice Fish of the Supreme Court analyzed the Saskatchewan Court of Appeal Act, 2000 and concluded that the Court of Appeal had very much misconstrued its jurisdiction, both before and after the passage of the legislation:
An examination of both the former and present Acts, their legislative history, and their judicial interpretation in this Court and by the Saskatchewan Court of Appeal itself all lead to the same conclusion: appellate review in Saskatchewan has for a long time proceeded, and continues to proceed, on essentially the same basis as appellate review elsewhere in Canada . The appeal is a review for error, and not a review by rehearing.
Justice Fish looked at other provinces, including Ontario , and noted that the same was true in those jurisdictions.
There is, in the H.L. decision, a helpful discussion of just what Housen means in practice. For example, Fish J. made it clear that appellate courts can set aside a trial judge’s inferences of fact, not merely the findings of fact. But, he noted, “Appellate scrutiny determines whether inferences drawn by the judge are ‘reasonably supported by the evidence’. If they are, the reviewing court cannot reweigh the evidence by substituting, for the reasonable inference preferred by the trial judge, an equally — or even more — persuasive inference of its own.”
Future income loss
The S.C.C. did uphold the Court of Appeal on two points. The trial judge had not reduced the plaintiff’s damages for income loss on account of the periods during which the plaintiff was in jail. The reasoning of the trial judge was that the abuse of H.L. had led to the latter’s alcoholism, which had led to the criminal offences that had resulted in H.L.’s incarceration. However, the Supreme Court shared the Court of Appeal’s view, that “to compensate an individual for loss of earnings arising from criminal conduct undermines the very purpose of our criminal justice system (paras. 240-41); an award of this type, if available in any circumstances, must be justified by exceptional considerations of a compelling nature and supported by clear and cogent evidence of causation.”
Secondly, the Supreme Court agreed that the trial judge had been in error in failing to deduct social assistance payments from the award for past income loss. Justice Fish referred to the Court’s decision in M.B. v. British Columbia,  2 S.C.R. 477, for the “common sense proposition that social assistance benefits are a form of wage replacement” and so, should have been deducted from the pecuniary damages.