The Lawyers Weekly - January 15, 2010

DONALEE MOULTON HALIFAX

The Nova Scotia Court of Appeal has ruled that a legislated cap on minor injuries incurred as a result of an automobile accident does not violate the Canadian Charter of Rights and Freedoms. The appeal court upheld an earlier decision from the Supreme Court of Nova Scotia and affirmed a recent decision from the Alberta Court of Appeal.

“Generally, legislative caps on non-monetary damages appear to be upheld by the courts as constitutional,” said Christa Brothers, a partner with Stewart McKelvey in Halifax, who was co-counsel to one of the appellants.

“No new constitutional analysis or law emerges from the case as the court of appeal followed the analysis dictated by the Supreme Court of Canada in many s. 15 cases,” she added.

The decision has relevance
across the country, said Jeff
Galway, a partner practising
litigation in the Toronto office
of Blake Cassels & Graydon
LLP and lead counsel repre-
senting the Insurance Bureau
of Canada. “In addition to Nova
Scotia and Alberta, there are a
number of provinces in Canada
that have put in place similar
legislation. It helps clarify the
law.”
“It’s significant,” he added,
“that you have two appeal court
decisions that agree on the legal
issues.”
In Hartling v. Nova Scotia
(Attorney General), [2009]
N.S.J. No. 599, which heard
two appeals together, three
automobile accident victims
challenged the Nova Scotia gov-
ernment’s 2003 legislation cap-
ping non-monetary damages
for “minor injuries” at $2,500.
Specifically, the appellants
argued that this law, denying
them their right to full compen-
sation, is discriminatory
according to the equality provi-
sions of the Charter and as such
ought to be declared invalid.

Alternatively, the appellants asserted that the government of the day undermined the true will of the legislature by enacting regulations that expanded the reach of this cap beyond what the legislation ever intended.

For its part, the province insisted that this legislation is not discriminatory and that the regulations are properly

Brothers

designed to further its objects. Instead, it contended that this initiative reflects sound public policy designed to contain skyrocketing automobile insurance premiums.

The appeal court agreed with
the government — and noted
that its agreement was not
unique. “Across the
country,” Chief
Justice Michael
MacDonald wrote
in his 55-page
decision, “there
have been other
constitutional
challenges
launched against
similar provincial
legislation. They
too have been
unsuccessful.”
One pivotal
precedent was

Morrow v. Zhang, [2008] A.J. No. 582 (leave to appeal dismissed by SCC). Chief Justice MacDonald pointed out that while the Alberta Court of Appeal held that the province’s minor injury regulation did create a distinction in relation to the respondents on the basis of disability, this distinction was not discriminatory.

“This decision largely turned on the fact that, while the legislative reforms capped non-pecuniary damages, they provided added medical benefits in exchange for reduced damages,” he stated.

Despite the ultimate disagreement with the appellants, Nova Scotia’s appeal court found common ground on several fronts. First, it noted, the group is treated differently from other automobile accident victims who will avoid the cap, and therefore, meets the distinction required by s. 15. Second, this distinction is based on one of the enumerated grounds: physical disability. Third, minor injury victims are disadvantaged by this legislation.

“This is obvious because when it comes to non-monetary loss, their right to recover will be subject to an arbitrary limit,” wrote Justice MacDonald. “This means that while there may be discretion for awards involving less than $2,500, most members of this group will be denied individualized independent judicial assessments and consequently the right to full recovery.

“This runs counter to the civil law principle that, as far as money will allow, a wrongdoer should return the victim to his or her pre-accident position,” he added.

However, the court found
that the evidence fell short of
establishing that the legislation
perpetuates prejudice or ste-
reotyping sufficient to trigger s.
15. “[A]s a basic proposition, it
is not enough for the appellants
to simply establish that their
distinct group is disadvan-
taged; an invitation that the
appellants came very close to
vantage and very sparse evi-
dence of past stereotyping,” he
added. “Furthermore, this
reform is sufficiently attentive
to the appellants’ needs, capac-
ity and circumstances.
Specifically, the appellants will
continue to be fully compen-
sated for all direct financial
losses.”
The court also
noted that the
interest affected is
already arbitrary by
nature. “In other
words,” said Chief
Justice MacDonald,
“while this legisla-
tion results in a dis-
advantage, it is not
the product of prej-
udice or stereotyp-
ing as envisaged
under section 15.”
“In essence,”
said Brothers, “the court looked
at whether there was a stereo-
type or prejudice suffered by
the group and found there was
not enough evidence to con-
clude this.”
“The court also looked at the
fact that non-pecuniary dam-

“The appellants argued that this law, denying them their right to full compensation, is discriminatory according to the equality provisions of the Charter and as such ought to be declared invalid.

extending. Instead, to succeed they must go a step further and establish that their disadvantage reflects discrimination,” said Chief Justice MacDonald.

“[W]hile the cap represents
a new disadvantage, there is no
evidence of an historic disad-
age caps exist in other provinc-
es,” she noted. “There have been
judge-made non-pecuniary
damage caps since the Supreme
Court of Canada trilogy.”
More than 30 years ago, the
Supreme Court of Canada cre-
ated a ceiling of $100,000 on
non-monetary awards for vic-
tims of catastrophic injury in
what has become known as the
trilogy: Andrews v. Grand &
Toy Alberta Ltd., [1978] 2
S.C.R. 229; Arnold v. Teno,
[1978] S.C.J. No. 8.; and
Thornton v. School Dist. No. 57
(Prince George), [1978] 2 S.C.R.
267.

Reasons: Hartling v. Nova Scotia (Attorney General), [2009] N.S.J. No. 599.

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