WORKERS' COMPENSATION APPEALS TRIBUNAL
DECISION NO. 676/94
IN THE MATTER OF an application to the Workers' Compensation Appeals
Tribunal pursuant to section 17 of the Workers' Compensation Act,
R.S.O. 1990, c. W.11.
AND IN THE MATTER OF an action pending in the Ontario Court of
Justice (General Division) as Action No. 67378/91Q (formerly No.
3919/89 at London, Ontario).
AND IN THE MATTER OF an action pending in the Federal Court of Canada
as
No. P-1295/89.
AND IN THE MATTER OF an action pending in the Ontario Court of
Justice (General Division) as Action No. 17454/94.
B E T W E E N:
PATRICIA GARRY, DONALD GARRY, DANIEL GARRY,
KAREN GARRY and LYNN GARRY
Applicants in this application
and Plaintiffs in the Court Actions.
- and HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS
REPRESENTED BY THE MINISTER OF TRANSPORT, TRANSPORT CANADA, CANADIAN
TRANSPORTATION COMMISSION & CANADIAN AVIATION SAFETY BOARD, AIR ONTARIO
INC., THE CANADA TRUST COMPANY,
Executor of the Estate of George John
Morwood, THE ESTATE OF KEITH MILLS, SONIA HARTWICK, LAWRENCE BEELER, AIR
CANADA, VAUGHAN COCHRANE, and DRYDEN FLIGHT CENTRE INC.
Respondents in this application and Defendants in the Court
Actions.
WORKERS' COMPENSATION APPEALS TRIBUNAL
DECISION NO. 676/94
IN THE MATTER OF an application to the Workers' Compensation
Appeals Tribunal pursuant to section 17 of the Workers'
Compensation Act.
AND IN THE MATTER OF an action pending in the Ontario Court of
Justice (General Division) as Action No. 67378/91Q (formerly No.
3919/89 at London, Ontario).
AND IN THE MATTER OF an action pending in the Federal Court of
Canada as No. P-1295/89.
AND IN THE MATTER OF an action pending in the Ontario Court of
Justice (General Division) as Action 17454/94.
B E T W E E N:
PATRICIA GARRY, DONALD GARRY,
DANIEL GARRY, KAREN GARRY and LYNN GARRY
Applicants/Plaintiffs
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY THE
MINISTER OF TRANSPORT, TRANSPORT CANADA, CANADIAN TRANSPORTATION
COMMISSION & CANADIAN AVIATION SAFTEY BOARD, AIR ONTARIO INC., TH
CANADA TRUST COMPANY, Executor of the Estate of George John
Morwood, THE ESTATE OF KEITH MILLS, SONIA HARTWICK, LAWRENCE
BEELER, AIR CANADA, VAUGHAN COCHRANE, and DRYDEN FLIGHT CENTRE IN
Respondents/Defendants
WORKERS' COMPENSATION ACT
SECTION 17 APPLICATION
WORKERS' COMPENSATION APPEALS TRIBUNAL
DECISION NO. 676/94
This Section 17 Application was heard on September 6, 1994, by a Tribunal
Panel consisting of:
N. McCombie:
R.H. Apsey :
R.J. Lebert:
Vice-Chair,
Member representative of employers,
Member representative of workers.
THE SECTION 17 APPLICATION
This is an application by Patricia Garry, Donald Garry, Daniel Garry, Karen
Garry and Lynn Garry, Plaintiffs in Action No. 67378/91Q in the Ontario Court of
Justice (General Division), Action No. P-1295/89 in Federal Court of Canada and Action
No. 17454/94 in the Ontario Court of Justice (General Division). There are a number of
Defendants in this action and they are listed below.
The Plaintiffs/Applicants were represented by J.R. Morse, a lawyer with the firm
Lerner and Associates. Mr. Morse was assisted by B. Grant. Donald Garry attended the
hearing, but did not testify.
The Respondents/Defendants were represented by G.A. Chouest, a lawyer with the
firm Patterson, McDougall. He was assisted by B. Chambers.
The Panel raised a concern with respect to notice several of the Defendants,
those we characterized as the "federal defendants". Included in the pre-hearing
correspondence is a letter, dated May 31, 1994, from D. Friesen, Senior General
Counsel, Department of Justice, Canada. This letter, to the Tribunal Counsel Office,
indicates receipt of the Respondents' Section 17 Statement, but notes that Mr. Friesen:
cannot find any record of having been served with the Section 17 Statement of the
Applicant in this matter. In any event, my understanding is that the interests of the
Crown are not directly involved in this matter, and on that basis the Crown will not
participate in these proceedings at this stage.
Mr. Morse provided the Tribunal with an "Affidavit of Service", indicating that
on April 20, 1994, the Applicants' Section 17 Statement was served on "Her Majesty the
Queen in Right of Canada as represented by Minister of Transport". It was not clear to
us whether this also represented notice to the Defendants, Transport Canada and
Canadian Transport Commission & Canadian Aviation Safety Board. The Tribunal Counsel
Office again contacted Mr. Friesen and, by letter dated November 9, 1994, he indicated:
In reply to your letter of October 24, 1994, I confirm that I represent the Crown
in right of Canada as well as the National Transportation Agency of Canada (formerly
the Canadian Transport Commission) and the Canadian Aviation and Safety Board) in
litigation arising out of the Air Ontario crash at Dryden, Ontario, on March 10, 1989.
We are therefore satisfied that all those potentially affected by this matter
have been notified and given an opportunity to participate.
2
At the beginning of the hearing R. Carnovale and W. Devoe from the Canadian Union
of Public Employees attended to address a preliminary matter.
THE EVIDENCE
The Panel considered the material included in the Applicants' Section 17 Statement
(Exhibit #1), the Respondents' Section 17 Statement (Exhibit #2) and the Respondents'
Book of Authorities (Exhibit #3). In addition, we considered a letter from Mr. Morse
to Mr. Chouest, dated June 17, 1994 (Exhibit #4), an Affidavit of Service, concerning
the delivery of the Exhibit #1 to the Federal Minister of Transport, dated April 23,
1994 (Exhibit #5), and a package of five Affidavits from the Plaintiffs concerning
their relationship to Ms. Say, dated May 15 and 16, 1994 (Exhibit #6).
The Panel heard no oral evidence. Submissions were made by Mr. Morse and Mr.
Chouest. Post-hearing information was received from Mr. Morse by letter dated October
13, 1994.
THE NATURE OF THE CASE
This application arises out of an air crash in which Katherine Lea Say lost her
life. The Plaintiffs/Applicants are Ms. Say's non-dependent family members. They have
brought an action against a number of Defendants. The parties were in agreement on the
basic facts of the case. There are two legal issues which arise from these facts
which the Panel must decide: is an action seeking punitive damages barred by the
Workers' Compensation Act; and, if so, are one or more of the Respondents protected by
section 16 of the Act?
(i) The preliminary matter
Mr. Carnovale appeared as a representative of one of the Defendants in her
dealings with the WCB. He was concerned that this Defendant's WCB claim file might be
released to the parties. Mr. Morse and Mr. Chouest indicated that, as far as they were
concerned, the issues to be addressed were primarily legal and there was no need to
review this Defendant's file. The Panel agreed that there appeared to be no need to
refer to her file. With this understanding, Mr. Carnovale withdrew.
THE PANEL'S REASONS
(i)
Background
As indicated, there are no disputes concerning the factual background which may be
summarized as follows:
1.
On March 10, 1989, Ms. Say was employed as a flight attendant on Air Ontario
Flight Number 1363. That flight crashed shortly after taking off from Dryden,
Ontario, and Ms. Say was fatally injured.
2.
Air Ontario is a Schedule 1 employer and Ms. Say was in the course of her
employment with Air Ontario at the time of the accident. The worker's spouse was
initially part of the action which is the subject of this application, but
3
withdrew from that action and filed a claim for survivor's benefits under the
Workers' Compensation Act.
3.
4.
5.
6.
Ms. Say's mother, father, brother and two sisters ("the Garry family") are
Plaintiffs in an action against a total of 12 defendants, as follows:
(a)
Her Majesty the Queen in right of Canada as represented by the Minister of
Transport;
(b)
Transport Canada;
(c)
Canadian Transport Commission & Canadian Aviation Safety Board.
Defendants (a), (b) and (c), the three "federal defendants", were notified of this
application but, as outlined above, chose not to participate.
(d)
Air Ontario Inc.;
(e)
The Canada Trust Company, the executor of the estate of George John Morwood;
(f)
The estate of Keith Mills;
(g)
Sonia Hartwick.
Defendants (e), (f) and (g) were workers of Air Ontario - and co-workers of Ms.
Say - and were in the course of their employment at the time of the crash.
(h)
Dryden Flight Centre Limited;
(i)
Vaughn Cochrane;
(j)
Lawrence Beeler;
Defendant (h) was a Schedule 1 employer at the time of the accident, and
Defendants (i) and (j) were workers or executive officers for that company.
(k)
Air Canada.
7.
Defendant (k) is a Schedule 2 employer.
8.
The Garry family are immediate "members of the family", as defined in section 1(1)
of the Act, of Ms. Say ("non-dependent family members"). They were not wholly or
partly dependent upon her at the time of her death.
9.
The Plaintiffs are relying on the report of the Commission of Inquiry into the Air
Ontario Crash at Dryden, Ontario that was established to investigate the cause of
the Dryden crash. It is their contention that the findings of this report support
their claim for punitive damages against the Defendants.
(ii)
Can the Act bar actions for punitive damages?
As we have indicated, it is the position of the Plaintiffs that the Workers'
Compensation Act, as the name itself implies, is intended to provide compensatory
relief, and therefore, court actions seeking compensatory damages are barred. There is
4
a distinction, however, it is argued, between compensatory damages and punitive damages
and an action seeking the latter should not be barred.
(a) What are punitive damages?
There were a number of authorities referred to during the course of the hearing
which explained the evolution of exemplary or punitive damages in the Canadian and
1
English common law context.
It is clear that the present day appreciation of
exemplary damages was most significantly influenced by the House of Lords decision in
Rookes v. Barnard, [1964], All ER 367, which distinguishes exemplary or punitive
damages from other types of damages. This case is referred to in all the authorities
and was cited by the parties.
In addition to these authorities, we also note the 1991 Report on Exemplary
Damages, by the Ontario Law Reform Commission (the "OLRC Report"). This report noted
that while exemplary damages are primarily awarded to deter and punish, occasionally
exemplary damages have been supported on the grounds that they compensate the plaintiff
for the costs of litigation and other losses for which the plaintiff might not be fully
compensated. The courts have already tried to isolate the compensatory element from
punitive damages but have not been entirely successful. Historically, the primary
purpose of exemplary damages has been punishment and the OLRC recommends that this
2
continue to be the case.
We also note a recent article in the Canadian Bar Review in which it is observed
that the primary purpose of awarding punitive damages is for reasons of retribution and
3
deterrence.
In Canada, the author notes, the principal justification is one of
retribution, as compared with the United States where deterrence is the primary
rationale. The "individual plaintiff's suit [in the U.S.] becomes the vehicle to
express condemnation against the Defendant's actions which may have placed the
4
interests of others at risk".
This suggests that in civil actions in the U.S. the
courts have a greater interest than they do in Canada in monitoring the damage done to
the broader community, beyond the immediate damage done to the Plaintiffs.
The OLRC Report also discusses a number of significant differences between the law
on punitive damages in Canada and the U.S. It is noted that most of the controversy
about punitive damages in the U.S. is due to the very large jury awards of punitive
damages, which are infrequent but highly visible. In the Commission's view, the size
of an award in Canada is restricted by the requirement that the award relate only to
the conduct that injured the Plaintiff. The OLRC Report comments, at pp. 14-15:
1
Section 20 of the Nova Scotia Act is virtually identical to section 16 of the
Ontario Act.
2
3
4
OLRC Report, pp. 2, 4, 7-8.
5
However, most significant is the condition imposed by Lord Devlin in
Rookes v. Barnard, that "the plaintiff cannot recover exemplary
damages unless he is the victim of the punishable behaviour". This
is more than a simple standing requirement. It requires that the
exemplary award pertain only to the conduct that injured the
plaintiff. Although this consideration has been little developed or
challenged in Canada, we are aware of only one Canadian case that
has violated this consideration to impose a penalty for conduct
beyond that that injured the plaintiff. In fact, more restrictive
variations of this consideration have been adopted. In our view,
this, more than anything else, limits the quantum of exemplary
damages awards in Canada. It does so at the cost of rendering
exemplary damages relatively ineffective as a vehicle with which to
control a systematic wrongdoing. For example, if exemplary damages
were awarded in a products liability case in Canada, they would be
qualified with reference solely to the conduct that injured the
specific plaintiff. In contrast, in many cases in the United
States, it appears the award is given to deter and punish the
defendant for a general course of conduct that injured, or exposed
to the risk of injury, many parties other than the plaintiff. This
more than
anything else has lead to large awards, duplicative punishment for
the same act or course of conduct, racing to file the first suit,
and complex proposals to alleviate these problems.
The one Canadian exception is Claiborne Industries Ltd. v. National
5
Bank of Canada, where the Ontario Court of Appeal awarded
$4,800,000 in punitive damages against a bank that was found liable
in conspiracy. The facts in that case were sufficiently unusual
that, in our view, it should not be considered indicative of an
emerging trend in Canada. Moreover, the decision appears to violate
the condition endorsed earlier by the Supreme Court of Canada in
6
7
Vorvis, that the award pertain to a wrong done to the plaintiff.
5
(1989), 69 O.R. (2d) 65, 59 D.L.R. (4th) 533.
6
Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085, 58
D.L.R. (4th) 193. Vorvis was raised as an authority in support of the Plaintiff's
position.
7
While the OLRC Report indicates that there has only been one Canadian
multi-million dollar award, which they view as an aberration, the Ontario Court of
Appeal in Hill v. Church of Scientology (1994), 18 OR (3d) 385 recently upheld a
punitive damages award of $800,000. The Court indicated, however, that the libel
was so serious as to be "in a class by itself." Leave to appeal Hill was granted
by the Supreme Court of Canada on October 27, 1994.
6
Vorvis is the leading Canadian case on punitive damages. The Supreme Court of
Canada in that case noted, at p. 205, the problematic nature of punitive damages. They
require a civil court to impose a fine for conduct it finds worthy of punishment and
give the fine to the Plaintiff instead of to the state treasury. This is done in the
absence of the procedural protections of a criminal trial and on a balance of
probabilities standard, rather than the higher criminal standard of proof, beyond a
reasonable doubt. Thus, according to the Court, punitive damages should always receive
the most careful consideration and the discretion to award them should be most
cautiously exercised.
When they are awarded, as discussed by McIntyre, J., speaking for the majority at
p. 206:
It must never be forgotten that when awarded by a judge or jury, a
punishment is imposed upon a person by a court by the operation of
the judicial process. What is it that is punished? It surely
cannot be merely conduct of which the court disapproves, however
strongly the judge may feel. Punishment may not be imposed in a
civilized community without a justification in law. The only basis
for the imposition of such punishment must be a finding of the
commission of an actionable wrong which caused the injury complained
of by the plaintiff.
[emphasis added]
The basis for the action in Vorvis was breach of contract. This is in contrast to
a tort case which is the analogy that is appropriate in a workers' compensation
context. In that respect it is noted, at p. 207 of Vorvis:
In tort cases, claims where a plaintiff asserts injury and damage
caused by the defendant, the situation is different. The defendant
in such a case is under a legal duty to use care not to injure his
neighbour, and the neighbour has a right in law not to be so injured
and an additional right to compensation where injury occurs.
[emphasis added]
This suggests that there must first be a right to other damages, before the
additional right to punitive damages can be invoked. At the hearing we asked whether
Mr. Morse could cite any cases in which punitive damages alone were awarded. Mr. Morse
responded in a post-hearing letter, dated October 13, 1994. We will consider those
cases below.
(b) Punitive damages in a workers' compensation context -the
caselaw
It is useful to repeat the relevant provisions of the Act:
10(9) No employer in Schedule 1 and no worker of an employer in
Schedule 1 or dependant of such worker has a right of action for
damages against any employer in Schedule 1 or any executive officer
or any director or any worker of such employer, for an injury for
which benefits are payable under this Act, where the workers of both
employers were in the course of their employment at the time of the
happening of the injury, but, in any case where the Board is
satisfied that the accident giving rise to the injury was caused by
the negligence of some other employer or employers in Schedule 1 or
7
their workers, the Board may
such case or a proportion of
or group to which such other
accident cost record of such
direct that the benefits awarded in any
them shall be charged against the class
employer or employers belong and to the
individual employer or employers.
Section 16, which we will consider in more detail below, reads:
16 The provisions of this Part are in lieu of all rights and rights
of action, statutory or otherwise, to which a worker or the members
of his or her family are or may be entitled against the employer of
such worker, or any executive officer thereof, for or by reason of
any accident happening to the worker or any industrial disease
contracted by the worker on or after the 1st day of
January, 1915, while in the employment of such employer, and no
action lies in respect thereof.
[emphasis added]
There is one WCAT decision which directly deals with this question. In Decision
No. 846/93 (June 13, 1994), the Defendant applied to determine whether the Plaintiff's
right to sue for damages for a fall and for wrongful dismissal and wrongful retention
of goods was taken away by section 16. The Plaintiff had claimed "punitive, aggravated
and exemplary damages as well as regular compensatory damages." Most of the decision
deals with the nature of a claim for wrongful dismissal in a workers' compensation
context.
With respect to the claim for punitive damages, however, the Panel noted, at p. 6:
Concerning the Respondent's claim for punitive, aggravated and
exemplary damages, we are of the view that, to the extent that those
damages are associated with the allegations of negligence giving
rise to injury, to that extent are they barred by section 16. To
the extent that they are associated with the claim for wrongful
dismissal or wrongful detention of goods, they are not barred by
section 16. The quantification of such damages, and their
assignment to the heads of general damages, is something that is
best left to the courts.
Conversely, any punitive, aggravated, or exemplary damages which a
court might later award which have a nexus to the Respondent's
workplace accident are caught by section 16 and cannot be claimed by
the Respondent.
Canadian courts have had little to say on the subject. There is one recent case
that was argued at the hearing that is directly on point arising from a workers'
compensation case in Nova Scotia. In McIntyre v. Atlantic Hardchrome Ltd. (1991) COHSC
177, the court considered a claim for general and exemplary damages by a worker who had
suffered injuries when exposed to toxic chromium fumes. While the trial judge agreed
that the worker's right to claim general damages was taken away by section 20 of the
8
Nova Scotia Workers' Compensation Act, he was of the opinion that the basic purpose of
the Act was to provide compensatory awards. He then went on to find, at pp. 184-185:
8
8
Punitive damages are not awarded because of injuries suffered from
an accident; what is to be considered is the defendants' conduct as
related to the cause of that accident. The conduct of the defendant
company itself was not an accident, its conduct included deliberate
and conscious acts or omissions, which if they fall into the
category of exemplary or punitive damages, may be found as damages
against the defendants in the nature of general deterrence, rather
than compensatory.
I have come to the conclusion that the Workers' Compensation Act
does not and should not give total protection to the employer who
treats an employee with such cavalier contempt that, but for the
Workers' Compensation Act, the employee would be entitled to
damages.
The injury that is the result of such conduct may not be intended,
but the acts or omissions which give the cause of the injury are
both wilful and perceivable by the offender and therefore are not
accidental in a literal sense, but are subject to the offender's
control. To the intervenor's fear that the admission of claims for
exemplary damages would render the Act "useless," the Act would
still be a defence to general damage claims, and as I said, if the
acts or omissions are wilful, employers can easily arrange to avoid
them. The primary question now is, did the acts or omission of the
defendants establish conduct that is subject to exemplary damages?
This decision was reversed on appeal by the Nova Scotia Court of Appeal, (1991) 5
COHSC 117, which accepted the argument, at p. 120, that the effect of section 20 was to
bar:
The independent right of action against the appellant on the facts
that underlie this appeal. Having elected to take compensation, the
respondent lost his right to sue the appellant for damages,
exemplary or otherwise, arising from his injury which arose from a
compensable accident on the job.
Unfortunately, as was noted by counsel in our case, the Court of Appeal did not
provide extensive reasoning in support of the above finding.
Mr. Morse argued that the protection from lawsuit afforded by the Workers'
Compensation Act to workers, employers and executive officers is limited to claims for
compensatory damages only and cannot be extended to claims being made for punitive or
exemplary damages. He noted that the very title of Part I of the Act was
"Compensation". Part I is the main body of the Act.
Mr. Morse recognized that his argument was counter to the Nova Scotia Court of
Appeal decision in McIntyre, but argued that the reasons given in that case were
minimal and that we were not bound by that decision.
Meyer and McDermott et al. v. Waycon et al. (Ont. C.A., March 25, 1988, unrep.)
affg 15 O.A.C. 202.
9
We asked Mr. Morse whether he was aware of Canadian caselaw in which punitive
damages stood alone. That is, can these damages stand on their own, or are they always
added to general or other damages? After the hearing, Mr. Morse supplied us with two
cases. In Johnston Terminals & Storage Ltd. v. Miscellaneous Workers, etc., Union,
Local 351 (1975), 61 D.L.R. (3d) 741 (B.C.S.C.) it was found that a union local and one
of its officials were in breach of provisions of the then applicable British Columbia
Trade-unions Act.
The Plaintiffs were found to have been injured as a result of this
breach, although "they were unable to prove damages, so they are entitled to nominal
general damages. I assess these at $100." In addition punitive damages of $5,000 were
assessed.
It is of interest that even though the defendants in Johnston Terminals were
unable to prove general damages, a "nominal" amount of such damages was still awarded.
This suggests to us that the Court believed that such a nominal award was necessary in
order to allow for the punitive damages.
The other case provided was Cash & Carry Cleaners Ltd. v. Delmas et al. (1973), 44
D.L.R. (3d) 315 (N.B.S.C., Ap. Div.). In this case an appeal of the granting of a
permanent injunction against trespass was dismissed and an award of exemplary damages
in the amount of $500 was upheld. In this case punitive damages were the only damages
assessed, although injunctive relief was also granted.
Mr. Chouest argued that if we accepted Mr. Morse's arguments, there was a
potential flood of claims in which plaintiffs would use claims of punitive damages to
circumvent the sections 10 and 16 bar.
Mr. Chouest also pointed to section 103(4) of the Act which reads as follows:
103(4) Where in the opinion of the Board sufficient precautions have
not been taken for the prevention of accidents to workers in the
employment of an employer or where the working conditions are not
safe for workers or where the employer has not complied with the
regulations respecting first aid, the Board may add to the amount of
any contribution to the accident fund for which the employer is
liable such a percentage thereof as the Board considers just and may
assess and levy the same upon the employer.
He suggested that this section offered a mechanism for punishing employers who
were found to have failed in the provision of proper protection for their workers.
Mr. Chouest relied on the McIntyre decision and also noted Decision No. 324/92
(1992), 23 W.C.A.T.R. 306. That case found that Canadian law "probably does not allow
for an intentional tort exception" to the general bar on actions arising from
compensable circumstances.
Mr. Chouest urged us to give a clear reading to section 16 which removes "all
rights and rights of action". Such a reading, in his submission, prohibits a punitive
damages exception.
(c) The Panel's conclusions on punitive damage claims being barred
It is apparent on the face of it that the provisions in the Act do not limit
themselves to actions for compensatory damages alone. They are intended to address, as
10
section 16 makes clear, all rights, which would include rights to punitive or exemplary
damages.
Having reviewed the law in this area, we agree with the position taken by the
Panel in Decision No. 846/93 that, when considering a claim for punitive damages, "to
the extent that those damages are associated with the allegations of negligence giving
rise to injury, to that extent are they barred by section 16". This is also in accord
with the recent McIntyre decision in the Nova Scotia Court of Appeal and with a plain
reading of the section 16 bar against "all rights and rights of action, statutory or
otherwise".
This bar arises where there is "any accident happening to the worker". That would
include an accident that might be found to have resulted from the kind of egregious
behaviour that would lend itself to a claim for punitive damages.
In the case before us, these damages are indeed "associated with the allegations
of negligence giving rise to injury". Without the accident, there could be no claim
for any damages, punitive or otherwise. And that accident, as it affected Ms. Say, was
a compensable one. In our view, the claim for punitive damages cannot be distinguished
from the general statutory prohibition against actions, "statutory or otherwise".
We also note Mr. Chouest argument that section 103(4) provides a mechanism for the
levying what would be, in effect, "punitive damages" against an employer. The
existence of this mechanism supports a literal interpretation of section 16.
(iii) What is the effect of section 16?
Section 16 was the subject of an interpretation, in Decision No. 490/88I (1988), 9
W.C.A.T.R. 332, that resulted in the right of non-dependent family members to bring an
action being taken. The interpretation of section 16 in this decision results in the
anomaly that a particular class of plaintiffs -non-dependent family members - loses the
right to bring an action on the one hand, and yet on the other, has no right to collect
workers' compensation benefits. It is, of course, usually the case that when workers
or dependent family members have their right of action taken away by the Act, they are
entitled to benefits under the Act.
The 490/88I Panel's conclusions were:
In this case we are faced with persuasive arguments, ably presented,
which are diametrically opposed. On the one hand, is the argument
that non-dependent family members are strangers to the Act, caught
up in a trade-off which takes away their rights, with no replacement
provisions. This position appears to be supported by the Court of
9
Appeal ruling in Meyer/McDermott.
9
The terms "punitive" and "exemplary" appear to be used interchangeably in the
literature and we do not distinguish between them in this decision. Note,
however, the use of the term "aggravated" damages, although sometimes in the past
also used interchangeably, is now generally distinguished. See Waddams, The Law
of Damages, (December 1992) ¶11.10.
11
On the other hand, the governing statute appears to clearly
contemplate a situation such as this and directs an unambiguous
response. This position is particularly
supported by the fact that the Legislature consciously changed these
provisions in 1943.
On balance, when faced with these conflicting arguments, the Panel
agrees with Mr. Demeo that we must first look to the statute that we
are required to apply. Starting from that premise, we must conclude
that section 14 [now section 16] was intended to remove the rights
of even non-dependent family members. To find otherwise, would be
to ascribe to the words in the section a meaning that could not be
rationally supported. There is, in our view, no way of reading
section 14 other than as a straightforward statement of legislative
intent. While we certainly would not dispute Mr. Lenardon's
contention that social conditions and rights have changed
drastically since 1943, and that decision-makers must bear in mind
such changing conditions in interpreting legislation, we cannot
change the plain meaning of our statute. There is, in effect, no
room for "interpretation".
12
(a) The parties' positions
Mr. Morse submitted that the Panel in Decision No. 490/88I did not adequately
consider the phrase "in lieu of" in section 16. This phrase suggests, he argued, that
section 16 can only remove a right of action if it is replaced with something else;
i.e., workers' compensation benefits. As the Plaintiffs in this case are admittedly
non-dependent family members, they are not entitled to any WCB benefits, "in lieu of"
their right of action.
Mr. Morse also argued that if section 16 is applicable, it should only be applied
in removing the right of action against "the employer"; that is, Air Ontario. Section
16 cannot be used, he argues, to protect any of the other Defendants.
Mr. Chouest agreed with the reasoning in Decision No. 490/88I. In his submission,
a plain reading of the section removes the plaintiffs' right of action against not only
Air Ontario, but also most of the other Defendants as well. He argued that "in lieu
of" is merely introductory and he referred to the concluding lines, "no action lies",
as the significant phrase.
While it is "perfectly clear", in Mr. Chouest's submission, that section 16
applies vis-a-vis Air Ontario, it is also his position that it is a reasonable
extension of section 16 to remove the right of action against the deceased's
co-workers. In support of that position he referred to the decision of the Appeal
Division of the Nova Scotia Supreme Court in Gagnon v. Richmond District School Board,
et al. (1986) 33 D.L.R. (4th) 561. In Gagnon, Hart, J.A. interpreted the equivalent
section 16 provisions of the Nova Scotia Workers' Compensation Act - also section 16 as follows:
10
11
Both Mr. Justice Roger
and Mr. Justice Richard
agree that the word
"employer" in s. 16 of the Act must be interpreted to include the
servants, agents and workers of the employer so as to prevent any civil
action being brought against an employer or a fellow worker by an injured
employee. I agree that this must be the proper interpretation of the
section. The type of accidents contemplated by the Workers' Compensation
Act are expected to occur in industries employing large numbers of
persons. Especially in the case of corporate employers, it would be
contemplated that an employer would be guilty of conduct which would make
it liable in tort for injuries caused to one of its employees. The type
of liability contemplated would be the vicarious liability of the
employer for the tortious acts of its servants and agents during the
course of their employment. In setting up a scheme to compensate an
employee for injuries received regardless of fault and in rendering the
employer free from civil action arising from the negligence of its
10
J. Berryman, The Case For Restitutionary Damages Over Punitive Damages: Teaching
The Wrongdoer That Tort Does Not Pay. (1994), 73 Can Bar Rev. 320.
11
P. 322.
The OLRC report makes the same point at p. 14.
13
employees, the Legislature must, in my opinion, have intended by s. 16 to
bar civil actions not only against the employer but also the fellow
workers of the victim.
case.
Mr. Chouest urged us to apply this reasoning to the co-worker Defendants in this
These would be Morwood, Mills and Hartwick.
In addition, he argued, the language of Gagnon referred to "servants, agents and
workers of the employer" being protected. Cochrane and Beeler were workers for Dryden
Flight Centre and were acting in their capacity as "agents" of Air Ontario. It was
also argued that Air Canada should also be protected noting the Plaintiffs' own
Statement of Claim which describes Air Ontario as operating as "Air Canada's agent".
It was admitted that the other Defendant, Canada Trust, would not be protected by
section 16.
(b) The Panel's conclusions on section 16
The first question we must consider is the interpretation of section 16 given by
the Panel in Decision No. 490/88I; that is, can this section bar non-dependent family
members from pursuing an action? The Panel in Decision No. 490/88I made much of the
fact that the wording in the section was amended in 1943. That amendment replaced the
words barring a right of action against a worker's employer by "the workman or his
dependants" to "a workman or member of his family". The explanatory note reads:
Section 3. This amendment is also of a technical
nature and is really for the purpose of clarifying the
law only. The section as it now stands provides that
the provisions of the Act are
in lieu of all rights of action of the workman "or his dependants"
and the question has sometimes arisen as to whether when the Board
holds that a member of the family (e.g., a widow or children) has
not been supported by him and is not a dependant has the right to
bring an action. It is proposed to make this clear by changing the
word "dependants" to "members of his family".
The Act defines both "dependant" and "member of the family", indicating that there
is a clear distinction between these two terms. That clear distinction having been
drawn, we cannot treat the two as interchangeable. That is, in essence, what Mr. Morse
is asking us to do. The effect of his interpretation would be to have only Dependent
family members barred by section 16. If that was true, there would be no significance
to the 1943 amendment and the two distinct definitions of dependant and family member.
With respect to an action taken by non-dependent family members against the
employer, therefore, we agree with the Decision No. 490/88I Panel; the words and
legislative history provide for no other interpretation. While Mr. Morse argued that
the Plaintiffs have no rights under the Workers' Compensation Act, "in lieu of" such an
action, we find that the wording that follows makes it clear that their right of action
is taken away, even if workers' compensation benefits are not payable. In this
respect, we note that, in 1943, a worker was required to be disabled for more than
12
seven days before compensation was payable.
That is, in 1943 a worker could suffer a
12
The Gagnon trial judge, 70 N.S.R. (2d) 229.
14
compensable accident that would be disabling for fewer than seven days and therefore
not receive any compensation benefits. Nonetheless, it would appear on the face of it,
that that worker would be precluded from any action against the accident employer by
reason of section 16.
We therefore find that section 16 applies in this case and the Plaintiffs cannot
bring the action against Air Ontario.
With respect to the other Defendants, however, we agree with Mr. Morse. We have
given a literal interpretation to section 16 as to the rights of non-dependent family
members, although we acknowledge, as did the Decision
No. 490/88I Panel, that people in the Plaintiffs' position do lose a right with little
to replace it. With that in mind, we cannot accept the position argued by Mr. Chouest
that the bar should be extended to others - such as co-workers and "agents" of the
employer - not mentioned in the section. The removal of a common law right must be
clearly outlined by the Legislature. On a clear reading of section 16, there is no
authority to remove this right of action against the other Defendants.
What about Gagnon? While a panel of the Ontario Appeals Tribunal is not bound by
an appeal court decision from Nova Scotia, in our view the findings in Gagnon must be
considered. In our view, however, those findings can be distinguished.
We have relied on the 1943 amendment to the Ontario Act that changed "dependant"
to "family member". That change created a new class of participants who were not
entitled to benefits, as they were not dependants, yet were prevented from bringing an
action. As we read Gagnon that distinction does not exist in the Nova Scotia statute.
At page 564 of the decision, the equivalent to our section 10(9) - section 15 and to
our section 16 - also section 16 - are quoted. The Nova Scotia section 16 refers to
workers' compensation provisions being in lieu of all rights to which a worker "or his
dependents [dependants]" may be entitled.
In Ontario, section 10(9) generally prevents an action by a dependant against "any
employer in Schedule 1 or any executive officer or any director or any worker of such
employer" (emphasis added). In the Nova Scotia statute therefore, sections 15 and 16
can be seen as complementing each other in a way that section 10(9) and 16 cannot in
Ontario. (On the face of it, in fact, it would appear that there would be nothing in
the Nova Scotia Act to prevent non-dependent plaintiffs from pursuing an action against
anyone.)
Given this significant difference in wording, we are therefore satisfied that our
decision is not in conflict with Gagnon.
We also note that section 10(9) does broaden the list of protected Defendants
beyond the accident employer. The section 10(9) bar protects, in addition to "the
employer", other Schedule 1 employers, other Schedule 1 workers and executive officers.
That broader list could have been included by the Legislature in section 16, but it is
not. We must therefore conclude that the Legislature intended to distinguish these
sections, as it distinguished between "dependant" and "family member".
15
We therefore find that the right of action is not taken away as against the
Defendants other than Air Ontario.
THE DECISION
The application is allowed in part. The right of action of the Plaintiffs is not
taken away against any of the Defendants except for Air Ontario. The right of action
against Air Ontario is taken away by section 16 of the Act.
DATED at Toronto, this 2nd day of February, 1995.
SIGNED:
N. McCombie, R.H. Apsey, R.J. Lebert.