Case information
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36809
Bruce Brine v. Industrial Alliance Insurance and Financial Services Inc.
(Nova Scotia) (Civil) (By Leave)
Docket
Judgments on applications for leave to appeal are rendered by the Court, but are not necessarily unanimous.
| Date | Proceeding | Filed By (if applicable) |
|---|---|---|
| 2016-06-22 | Close file on Leave | |
| 2016-06-22 |
Correspondence (sent by the Court) to, Respondent, cover letter regarding certificate of taxation, dated June 22, 2016. |
|
| 2016-06-22 | Certificate of taxation issued to, Mrs. Patricia Wilson | |
| 2016-06-22 | Decision on the bill of costs, in the amount of $2,342.33, Reg | |
| 2016-06-22 | Submission of the bill of costs, Reg | |
| 2016-06-08 | Bill of costs, (Letter Form), Completed on: 2016-06-08 | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-05-13 | Copy of formal judgment sent to Registrar of the Court of Appeal and all parties | |
| 2016-05-13 | Judgment on leave sent to the parties | |
| 2016-05-12 |
Judgment of the Court on the application for leave to appeal, The application for leave to appeal from the judgment of the Nova Scotia Court of Appeal, Number CA 431538, 2015 NSCA 104, dated November 17, 2015, is dismissed with costs. Dismissed, with costs |
|
| 2016-04-11 | Correspondence received from, (Letter Form), Respondent re : they do not agree with the applicant's request., (Electronic version filed on 2016-04-11) | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-04-11 | All materials on application for leave submitted to the Judges, CJ Mo Ga | |
| 2016-04-07 | Correspondence received from, (Letter Form), Barry J. Mason, counsel for the applicant advising the Court that this file raises similar issues as file 36696., (Electronic version filed on 2016-04-07) | Bruce Brine |
| 2016-04-04 | Applicant's reply to respondent's argument, (Book Form), Completed on: 2016-04-04, (Electronic version filed on 2016-04-04) | Bruce Brine |
| 2016-02-25 | Correspondence received from, (Letter Form), Counsel for the Applicant, Mr. Barry J. Mason, Q.C. - fax letter dated February 25, 2016, re: motion to strike | Bruce Brine |
| 2016-02-25 | Order on motion to strike out, by Justice Côté | |
| 2016-02-25 |
Decision on motion to strike out, Côt, The respondent, Industrial Alliance Insurance and Financial Services Inc. (“Industrial”), has brought a motion for an order striking the affidavit of Professor Bruce Feldthusen, which has been filed by the applicant, Bruce Brine, in support of his application for leave to appeal in this Court. [2] The application seeks leave to appeal from a decision of the Nova Scotia Court of Appeal concerning a dispute over disability insurance between an insured, Mr. Brine, and an insurer, Industrial. The trial judge found Industrial had breached its contractual obligations and duty of good faith, awarding Mr. Brine contractual damages, $30,000 for mental distress, $150,000 in aggravated damages and $500,000 in punitive damages (2014 NSSC 219). The Court of Appeal allowed Industrial’s appeal, in part, reducing the combined mental distress and aggravated damages to $90,000, and the punitive damages to $60,000 (2015 NSCA 104). [3] Mr. Brine contends there is an issue of public importance raised by this case warranting the granting of leave by this Court, namely whether Canadian courts should be awarding higher punitive damage awards in order to adequately deter insurers from acting in bad faith. In particular, he asserts that the Court of Appeal’s reduced punitive damages award in this case is grossly inadequate and will do little to deter future misconduct by Industrial or other insurers. He includes the impugned affidavit of Prof. Feldthusen in his application to support his contentions. [4] Industrial requests that the affidavit be struck, along with portions of the applicant’s memorandum of argument that make reference to it, on the following basis: the affidavit is irrelevant to the issue of whether leave to appeal should be granted pursuant to s. 40(1) of the Supreme Court Act, R.S.C. 1985, c. S-26, and the contents of the affidavit are argument and inadmissible evidence contrary to Rule 89 of the Rules of the Supreme Court of Canada, SOR/ 2002 - 156. [5] Rule 89 sets out the requirements for affidavits filed in support of a proceeding in this Court, including applications for leave to appeal: 89 (1) An affidavit shall be filed to substantiate any fact that is not a matter of record in the Court. (2) An affidavit to be used in a proceeding shall be limited to the statement of facts within the knowledge of the deponent, but statements based on information or belief that state the source of the information or the grounds for the belief may be admitted by the Court, a judge or the Registrar. [6] In his affidavit, Prof. Feldthusen makes a number of statements about alleged misconduct by insurers that, in his view, is exacerbated by inordinately low punitive damages awards. He lists the names of 12 cases in which he says punitive damages were awarded against insurers since this Court’s decision in Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, as well as the amount of punitive damages awarded in those cases. He then concludes on that basis that misconduct is “very common in Canada” and that insurers consider low punitive damages awards to be a “mere license fee and a low cost of doing business”. Prof. Feldthusen sets out no further facts or analysis in respect of the cases cited. Neither does he provide additional statistics or other corroborating evidence to support his belief that bad faith and misconduct by insurers is related to the “modest and conservative” punitive damages awards that have failed to deter insurers “from engaging in ‘malicious’ and ‘high handed’ conduct”. This opinion evidence is inadmissible because it is lacking in proper foundation. [7] Moreover, the affidavit is not helpful to the Court in deciding whether or not leave to appeal should be granted, per the principles in Aecon Buildings v. Stephenson Engineering Ltd., 2011 SCC 33, [2011] 2 S.C.R. 560. While that decision concerned a motion to adduce fresh evidence and not a motion to strike, Binnie J.’s observations on when affidavits will be useful to the Court in considering whether or not to grant leave have application in the present circumstances: [4] Generally speaking, our Court takes the view that the question whether a legal issue is of public importance within the meaning of s. 43 of the Supreme Court Act, R.S.C. 1985, c. S-26, is not a matter on which affidavit evidence is helpful. The practice is not invariable however. In some cases it may not be apparent from the rest of the leave materials why, for example, the decision sought to be appealed is alleged to establish a precedent that is unworkable in practice, or otherwise is likely to have a problematic impact or jurisprudential importance not apparent on its face. Here, however, the issues are straightforward. […] [5] […] [The evidence sought to be filed] does not indicate any conflict in the authorities or suggest that there are good reasons, policy or jurisprudential, not readily apparent from the material already filed, for finding that the application raises a legal issue of public importance. [8] Even assuming the leave application raises the issues as framed by the applicant, which is for the leave panel to decide and about which I make no comment and express no opinion, the affidavit does not assist the Court with whether those issues are of public importance by, for example, pointing to conflicting decisions or otherwise unworkable legal principles resulting from the Court of Appeal decision. Neither does it provide the Court with background material relevant to the general importance of the case which, in some instances, might be helpful. Rather, it consists largely of sworn argument, addressing the ultimate questions the applicant seeks to put in issue on the proposed appeal. As Binnie J. suggested in Aecon, only rarely will affidavit evidence on an application for leave be useful to the Court. In the vast majority of cases, as here, that evidence will be irrelevant to deciding the public importance of the case.[9] Finally, the affidavit amounts to an improper attack on the correctness of the Court of Appeal decision below: see Ballard Estate v. Ballard Estate (July 2, 1991), Court file no. 22499, [1991] S.C.C.A. No. 239 (QL), in which Cory J. granted the motion to strike, finding “the affidavits filed on this case seek by way of experts’ opinion, to buttress an attack on the decisions from which leave to appeal is sought”. [10] I note that, as an alternative to granting the motion as requested, the applicant could have been given the opportunity to file an amended affidavit curing the deficiencies set out above, as an alternative to striking the affidavit in its entirety without leave to amend. However, considering that in this case the affidavit evidence is not helpful in assisting the Court on the issue of public importance, that option would not be the appropriate result. The same is true with respect to providing the respondent with the opportunity to cross-examine and file its own insurance expert affidavit to counter the one filed by the applicant.[11] The motion is therefore granted, with costs to the respondent in any event of the cause. The affidavit of Prof. Feldthusen and the relevant portions in the applicant’s memorandum of argument that refer to the affidavit are struck out, without leave to amend. The respondent shall have 30 days from the date of this order to serve and file its response to the application for leave to appeal. Granted, with costs |
|
| 2016-02-25 | Submission of motion to strike out, Côt | |
| 2016-02-25 | Order on motion to extend time, by Justice Côté | |
| 2016-02-25 |
Decision on motion to extend time, Côt Granted, with costs |
|
| 2016-02-25 | Submission of motion to extend time, Côt | |
| 2016-02-19 | Notice of name, (Letter Form), (Electronic version filed on 2016-02-18) | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-02-19 | Certificate (on limitations to public access), (Letter Form), (Electronic version filed on 2016-02-18) | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-02-19 | Respondent's response on the application for leave to appeal, (Book Form), amended version received 2016-03-23., Completed on: 2016-02-19, (Electronic version filed on 2016-02-18) | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-02-15 | Reply to motion to strike out, (Letter Form), Completed on: 2016-02-15, (Electronic version filed on 2016-02-15) | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-02-12 | Response to motion to strike out, (Book Form), Completed on: 2016-02-12, (Electronic version filed on 2016-02-16) | Bruce Brine |
| 2016-02-02 | Motion to extend time, (Book Form), (Included in the motion to strike out), Completed on: 2016-02-02 | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-02-02 | Motion to strike out, (Book Form), Completed on: 2016-02-02, (Electronic version filed on 2016-02-02) | Industrial Alliance Insurance and Financial Services Inc. |
| 2016-01-19 | Letter acknowledging receipt of a complete application for leave to appeal, file opened 2016-01-19. | |
| 2016-01-18 | Certificate (on limitations to public access), (Letter Form), (Electronic version filed on 2016-01-19) | Bruce Brine |
| 2016-01-18 | Application for leave to appeal, (Book Form), (2 volumes), amended memorandum received 2016-03-07., Completed on: 2016-01-18, (Electronic version filed on 2016-01-19) | Bruce Brine |
Parties
Please note that in the case of closed files, the “Status” column reflects the status of the parties at the time of the proceedings. For more information about the proceedings and about the dates when the file was open, please consult the docket of the case in question.
Main parties
| Name | Role | Status |
|---|---|---|
| Brine, Bruce | Applicant | Active |
v.
| Name | Role | Status |
|---|---|---|
| Industrial Alliance Insurance and Financial Services Inc. | Respondent | Active |
Counsel
Party: Brine, Bruce
Counsel
1254 Bedford Hwy.
Bedford, Nova Scotia
B4A 1C6
Telephone: (902) 832-1175 Ext: 225
FAX: (902) 832-1856
Email: bmason@pressemason.ns.ca
Agent
Ottawa, Ontario
K2P 0J8
Telephone: (613) 282-1712
FAX: (613) 288-2896
Email: msobkin@sympatico.ca
Party: Industrial Alliance Insurance and Financial Services Inc.
Counsel
Kevin Gibson
1969 Upper Water Street, Suite 1300
Purdy's Wharf Tower II
Halifax, Nova Scotia
B3J 2V1
Telephone: (902) 444-8509
FAX: (902) 425-6350
Agent
340 Albert Street
Suite 1900
Ottawa, Ontario
K1R 7Y6
Telephone: (613) 787-1009
FAX: (613) 235-2867
Email: pwilson@osler.com
Summary
Keywords
None.
Summary
Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.
Insurance – Punitive damages – Mental distress – Whether Canadian courts should be awarding higher punitive damage awards in order to adequately deter other insurers from acting in bad faith – Whether appellate courts are improperly reducing punitive damage awards such that insurers are not adequately deterred from acting in bad faith – Whether the Court of Appeal’s decision to reduce mental distress damages from $180,000 to $90,000 further entrenches the stigma and disadvantage to those suffering from a mental illness – Whether there is a cap on mental distress/aggravated damages.
The Applicant, Mr. Brine was found to be totally disabled within the terms of a disability insurance policy held by the insurer, National Life (and later its successor the Respondent, Industrial Alliance). The parties have been locked in a near two decade dispute, with issues regarding the provision of rehabilitation services, the tax treatment of benefits paid, and the deductibility of third party payments being the central areas of disagreement. Mr. Brine submitted that Industrial Alliance breached not only specific provisions of the policy, but also its duty of utmost good faith. Industrial Alliance submitted that it handled Mr. Brine’s claim appropriately, with no breach of any policy provision or the implied duty of utmost good faith. Industrial Alliance asserted that Mr. Brine failed to meet his obligations under the policy by not reporting payments from third party sources, resulting in substantial overpayments under the policy.
The trial judge awarded Mr. Brine $62,036.81 representing the portion of the overpayment claimed by Mr. Brine which was extinguished by his bankruptcy, $30,000 for mental distress damages arising from breach of contract, $150,000 for aggravated damages and $500,000 for punitive damages. Industrial Alliance was awarded $210,000 representing the amount due under the subrogation provision of the policy.
The Court of Appeal replaced the awards for mental distress and aggravated damages with one award of $90,000 as compensatory damages for mental distress caused by breach of contract, including breaches of the contractual duty of good faith. The appeal court also reduced the punitive damage award to $60,000. In all other respects, the appeal and cross-appeal were dismissed.
Lower court rulings
Supreme Court of Nova Scotia, Trial Division
No. 174118, 2014 NSSC 219
Applicant awarded damages in breach of contract ($62,032.81), mental distress ($30,000), aggravated damages ($150,000) and punitive damages ($500,000)
Nova Scotia Court of Appeal
CA 431538, 2015 NSCA 104
Appeal allowed in part; awards for mental distress and aggravated damages are replaced with one award ($90,000), punitive damages are reduced ($60,000)
Memorandums of argument on application for leave to appeal
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