COURT OF APPEAL FOR ONTARIO

ONCA 653

DATE: 20131031

DOCKET: C56554

MacFarland, Watt and Epstein JJ.A.

BETWEEN

Phillip Daniel Dickerson, Marilyn Sussan Dickerson, Phillip Hartley Dickerson and Melissa Marilyn Clampitt

Plaintiffs (Appellant)

and

1610396 Ontario Inc. C.O.B. as Carey’s Pub & Grill, David William Radcliffe, Mike Habash, Dwayne Hurley and Brandon Stewart

Defendants (Respondent)

Rasha M. El-Tawil and Michael A. Polvere, for the appellant

David Radcliffe, acting in person

Heard: June 26, 2013

On appeal from the order of Justice Johanne N. Morissette of the Superior Court of Justice, dated January 21, 2013, with reasons reported at 2013 ONSC 403.

MacFarland J.A.:

[1] This is an appeal from the order of Morissette J. dated January 21, 2013, dismissing the appellant’s motion.

[2] The appellant had moved for declaratory relief as follows:

i. A Declaration that a subsection 69.39 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, stay of proceedings does not operate with respect to enforcement of the judgment of Justice T.D. Little dated March 24, 2009 in court file number 47580 against the Bankrupt;

ii. A Declaration that the judgment of Justice T.D. Little and the damages awarded to Phillip Daniel Dickerson against David William Radcliffe is “an award of damages in civil proceedings for bodily harm intentionally inflicted” in accordance with s. 178(1)(a.1) of the Bankruptcy and Insolvency Act;

iii. A Declaration, pursuant to s. 178(1)(a.1) of the Bankruptcy and Insolvency Act that the judgment dated March 24, 2009 and endorsement dated May 25, 2009 of Justice T.D. Little against the Bankrupt, survive the Bankruptcy and is not a debt released by an order of discharge; and

iv. Costs of this motion on a substantial indemnity basis from any party opposing the motion.

THE FACTS

[3] The respondent was convicted of aggravated assault against the appellant. Contrary to the motion judge’s finding, the respondent did not plead guilty.

[4] At the criminal proceedings conducted before the Getliffe J. on June 20, 2006 at London, Ontario, the respondent conceded that the facts read in by the prosecutor at his trial would lead to a conviction of aggravated assault. The trial judge convicted the respondent of aggravated assault on the basis of those facts, of the concession of counsel, and of the evidence the judge had heard from the witness box. The uncontested facts as read in by the Crown at the criminal trial were:

On April 19, 2005 the victim, Phillip Dan Dickerson and several friends had been drinking at Carey’s Bar on Oxford Street in London. At some point in the evening the group had become involved in an altercation with another group of males. This included David Radcliffe. The initial disturbance ended when witness Trevor Stevens, who was a friend of the victim, discovered he had dropped his cell phone; called his cell phone number – oh sorry. Dan Dickerson called the cell phone number, was told to meet them at Cheapside and Second Street, however, the victim and his group of friends ended up meeting with the accused and his group of friends on the grounds of Fanshawe College at 1460 Oxford Street in London. At this time, a number of people began fighting. The victim in the case was not involved in the fight. He had left the area, called the police on his cellular telephone. At this point, the accused ran up to the victim and punched him once in the head. This caused the victim to lose consciousness and fall to the ground, striking his head on the curb. The victim was unconscious, unresponsive and transported to University Hospital where he was listed in critical condition. He suffered from bleeding to the brain. The accused had run from the area and was later apprehended by police. In addition to the facts read in this morning, those are the allegations.

THE COURT: All right.

[DEFENCE COUNSEL]: We concede that those allegations would lead to a conviction of aggravated assault.

THE COURT: Thank you [Defence Counsel]. Well, on the basis of the facts that I heard from the witness box and the facts that have additionally been read in by the Crown, there will be a conviction registered in this matter.

[5] In addition to the criminal proceedings, a civil suit was brought by the appellant against the respondent. The trial in the civil matter proceeded before Little J. and a jury. The evidence in the civil trial was, in essence, the same as the evidence that had been before the Criminal Court.

[6] The appellant had been standing a distance away from where the fighting was taking place and had his back to it. He was on his cell phone trying to call police when the respondent came up behind him. The respondent punched the appellant in the head with his closed fist with such force that the appellant lost consciousness and fell to the ground.

[7] At the time of the assault, the appellant was about five feet nine inches tall and weighed one hundred and thirty-five pounds. The respondent was just shy of six feet and weighed between one hundred and eighty and two hundred pounds.

[8] Three of that jury’s responses to the questions posed to it are relevant for present purposes. They are:

QUESTIONS FOR THE JURY

LIABILITY

1. Were Daniel Dickerson’s injuries caused or contributed to by any deliberate or negligent or acts of David Radcliffe.

YES √

2. State fully the deliberate or negligent act or acts that caused or contributed to the injuries of Daniel Dickerson.

David Radcliffe deliberately punched Daniel Dickerson in the head directly causing the injury.

6. Were Daniel Dickerson’s injuries caused or contributed to by his own negligent act or acts.

YES NO √

[9] I should add that Carey’s Pub and Grill was also named as a defendant in the civil proceeding brought by the appellant but was exonerated of any liability by the jury. In separate proceedings, the finding of the jury (in relation to Carey’s Pub and Grill) was appealed to this court. The appeal was dismissed. This court noted in the opening paragraph of its reasons:

Mr. Radcliffe, unprovoked, punched Mr. Dickerson in the head with enough force to cause significant brain injury and permanent disability.

[10] The civil jury awarded damages in the appellant’s favour against the respondent in excess of one million dollars.

[11] As a result of the judgment, the respondent filed a proposal under s. 62(1) of the Bankruptcy and Insolvency Act (“the BIA”) on February 16, 2011.

THE ISSUE

[12] The issue before the motion judge was whether the civil judgment obtained by the appellant fell within and met the requirements of s. 178(1)(a.1)(i).

[13] The motion judge found that it did not and dismissed the appellant’s motion.

[14] For the reasons that follow, I would allow the appeal.

ANALYSIS

[15] Section 178(1)(a.1) of the BIA provides:

178(1) An order of discharge does not release the bankrupt from

(a.1) any award of damages by a court in civil proceedings in respect of

(i) bodily harm intentionally inflicted, or sexual assault or

(ii) wrongful death resulting therefrom.

[16] In paragraph 12 of her reasons, the motion judge correctly stated the issue before her:

In order for this section to apply, I must be satisfied that the award imposed by the jury is in respect to “bodily harm intentionally inflicted”.

And she concluded at paras. 34-36:

The questions and answers from the jury do not provide a judicial analytical framework to assess whether it was an ‘intentional infliction of bodily harm’. The jury found that indeed Mr. Radcliffe ‘deliberately punched the plaintiff in the head’. And as a result of that punch, the injuries were sustained. There is a causal link for the tort claim and award.

Parliament could not have intended in legislating the exceptions in s. 178 to include the unfortunate and tragic consequences to mean that Mr. Radcliffe would have this lifelong penance for what was one punch.

I cannot find on the facts of this case that Mr. Radcliffe set out to intentionally injure Mr. Dickerson.

[17] In considering s. 178 of the BIA it is appropriate to begin with a consideration of the words of Blair J. (now J.A.) in Simone v. Daley (1999), 1999 CanLII 3208 (ON CA), 43 O.R. (3d) 511 (C.A.), at p. 522:

In Jerrard v. Peacock [(1985), 1985 CanLII 1148 (AB KB), 57 C.B.R. (N.S.) 54 (Alta. Q.B.)], Master Funduk – an experienced official in matters of this nature – subjected s. 178 to the following analysis, which in my opinion is an accurate one. At pp. 62-63 he said:

Considering the new start object ingrained in the Act, the logical interpretation of the two subsections in question is that subs. (2) creates the general principle (being a release of all debts) with subs. (1) being an exception to the general principle. Subsection (2) [sic] establishes exceptions, not the principle, and must be viewed in that light.

It is as if the section literally reads that the order of discharge releases the bankrupt from all claims provable in bankruptcy “except the following: and then lists the seven (now six) categories in subs. (1).

All of the exceptions in the section are based on what might be classed as an overriding social policy. In other words, they are the kinds of claims which society (through legislators) considers to be of a quality which outweighs any possible benefit to society in the bankrupt being released of these obligations.

Paragraph (a) is essentially an administration of justice concept. The liabilities caught by it will be in relation to criminal or quasi-criminal matters.

Paragraphs (b) and (c), regardless of the language used, are nothing other than society’s vested interest in ensuring that a person “supports” a dependent spouse and children. Obligations incurred for that cannot be shucked by the bankruptcy.

Paragraphs (d) and (e) are morality concepts which look at conduct. Those kinds of conduct are unacceptable to society and a bankrupt will not be rewarded for such conduct by a release of liability. [Footnote omitted.]

[18] We are here, of course, concerned with paragraph (a.1). It is not disputed that any claim falling within s. 178(1)(a.1) must arise from an act done with specific intent to injure (as opposed to an intentional act that incidentally results in injury).

[19] In determining whether the respondent possessed the requisite intent when he punched the appellant in the head, it is of some assistance to review some recent cases in which specific intent to injure has been found.

[20] In Martin v. Martin, 2005 NBCA 32, 9 C.B.R. (5th)235, the court was concerned with the liability of joint tortfeasors. In that case the victim Martin was assaulted by one Zoel Martin. Three of Zoel Martin’s brothers were present at the time of the attack and stood by while their brother beat the victim, Martin. In a civil action against all four Martin brothers, the victim Martin recovered damages exceeding $350,000 for injuries sustained as a result of the intentional tort of battery. The three brothers of Zoel Martin were found liable as joint tortfeasors. Subsequent to the judgment they filed assignments in bankruptcy and were discharged with respect to their bankruptcies pursuant to s. 178(2) of the BIA and released of all debts “except those matters referred to in ss. 178(1) [of the Act]”.

[21] The victim Martin (the plaintiff in the action for damages) applied for a declaratory order that the three were not released from liability on the judgment despite the discharge in bankruptcy obtained pursuant to the Act.

[22] The court quoted with approval this court’s decision in Simone v. Daley, supra, and that “… the logical interpretation of ss. 178(1) and (2) is that the latter creates a general principle (being a release of all debts) with subsection (1) being an exception to the general principle.” And then went on to say at paras. 11-12:

But even viewed as an exception to the general principle, and thus as a legislative provision to be interpreted restrictively, the object and clear purpose of the exceptions set out in s. 178 must be respected. The exceptions, as mentioned in Simone, are based on an overriding social policy that certain claims should be protected against the general discharge obtained by a bankrupt because of the class of claimants involved, in the present case, the victim of an assault causing bodily harm, and because of the reprehensible nature of the bankrupt’s conduct. As mentioned in Simone, for example, the types of debt which survive bankruptcy are debts arising out of fraud, dishonesty or misconduct while acting in a fiduciary capacity. Parliament has clearly made a policy decision that a bankrupt should not be allowed to raise the shield of his or her general discharge against judgment creditors who hold judgments grounded on such reprehensible conduct. As the court in Simone stated, “those kinds of conduct are unacceptable to society and a bankrupt will not be rewarded for such conduct by a release of liability.”

In my view, the same can be said with respect to claims or awards of damages in respect of “bodily harm intentionally inflicted, or sexual assault, or wrongful death resulting therefrom” mentioned in s. 178 of the Act. What must be examined is the type of claimant involved and the conduct of the bankrupt which gave rise to the award of damages.

[23] The court concluded that the victim Martin had been singled out for a beating and that each respondent was acting in furtherance of a common design. The court stated, at para. 16:

Thus, the decision as to whether the respondents are entitled to benefit from the discharge in bankruptcy must be decided on the basis that each of the respondents participated in a tort in furtherance of a common design to subject Lucien Martin to a beating.

The intention to inflict bodily harm upon the victim could be imputed to all of the respondents. The bankrupts were not released from liability.

[24] In Sangha (Re), 2004 BCSC 799, 4 C.B.R. (5th) 275, the bankrupt intentionally drove his car into his daughter and her boyfriend. He pleaded guilty to aggravated assault. The court noted that it was clear the bankrupt’s actions were intentional.

[25] The bankrupt’s automobile insurer, a provincial government insurer, paid the daughter and her boyfriend in excess of $300,000 under the provincial statutory scheme. The insurer then brought action against the bankrupt to recover the money it had paid to the victims on the bankrupt’s behalf. The insurer alleged that the accident was the result of an intentional act of violence and that the bankrupt had thereby forfeited his right to indemnity. The insurer succeeded and was awarded judgment against the bankrupt in excess of $350,000. Shortly thereafter the bankrupt made his assignment in bankruptcy. The insurer brought an application for a declaration pursuant to s. 178(1) that the judgment against the bankrupt was not released by the order of discharge. The application was granted.

[26] The court found the bankrupt’s actions were intentional and that they fell within the parameters of s. 178(1)(a.1) of the BIA. Master Groves accepted the insurer’s submission that the daughter and her boyfriend’s claims were “exactly the kind of claim that Parliament had in mind when creating the exceptions to the discharge” (at para. 18).

[27] In Winfield v. Lomas, 2008 BCSC 1636, 48 C.B.R. (5th) 37, the bankrupt husband assaulted his wife on two occasions, he struck her with both fists, shaking her head and neck, pushing her, putting a pillow over her face and pushing down. The wife obtained a judgment for damages for assault in the sum of $75,000 against the husband. Immediately thereafter the husband made an assignment in bankruptcy. Dickson J. had no difficulty concluding, at para. 14, that this intentional assault fell with the s. 178 exemption “as it concerns an award of damages for intentionally inflicted bodily harm.”

[28] Similarly in Thiessen v. Antifaev, 2003 BCSC 197, 41 C.B.R. (4th) 266, the bankrupt violently assaulted the victim with his motor vehicle and plead guilty to assault with a weapon. Hood J. held that such a claim would not be released by a discharge order by virtue of s. 178 of the BIA.

[29] In Matthew v. Tattrie, 2009 BCSC 263, the bankrupt struck the victim in the head with a baseball bat at a New Year’s Eve party. He pleaded guilty to aggravated assault. The damages awarded at the subsequent civil trial were found to arise from the intentional infliction of bodily harm and hence within s. 178(1)(a.1) of the BIA.

[30] Today there is only one principle or approach to statutory interpretation. According to the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27, at para. 21:“the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the Scheme of the Act, and the intention of Parliament” (citation omitted).

[31] I repeat for convenience the relevant section of the BIA:

178(1) An order of discharge does not release the bankrupt from

(a.1) an award of damages by a court in civil proceedings in respect of

(i) bodily harm intentionally inflicted.

[32] The intentional infliction of bodily harm falls within the requirement of the provision. In my view, the requisite intention can be proved directly or it can be reasonably inferred from the facts.

[33] The cases in which courts have concluded that s. 178(1)(a.1)(i) does not apply are distinguishable from the present appeal. Those cases were characterized by the absence of the intent required by the provision.

[34] For example, in Floros v. Mueller, 2003 SKQB 513, 244 Sask.R. 164, a judgment creditor had successfully brought a claim for malicious prosecution against the bankrupt. The malicious prosecution had caused the judgment creditor mental suffering that had manifested itself in physical symptoms. The creditor brought an application for a declaration that his judgment should survive the bankruptcy. Justice Kyle dismissed the application, holding, at para. 5, that to fall within s. 178(1)(a.1) “the action giving rise to the harm must have had the harm itself as its goal.”

[35] Similarly in Marshall (Re) (2001), 2001 CanLII 28287 (ON SC), 32 C.B.R. (4th) 74 (Ont. S.C.) – the bankrupt was sued for defamation. The victim suffered dizziness and vertigo as a result of the defamation. Deputy Registrar Stevens held that the court had not found that the bankrupt had intentionally inflicted bodily harm on the victim.

[36] In neither Floros nor Marshall were civil actions for damages for assault or for the direct and deliberate (intentional) infliction of bodily harm.

[37] Similarly, where a bankrupt is sued for negligence arising out of a motor vehicle collision, the resulting judgment for damages in favour of the victim is not excluded by the provisions of s. 178(1)(a.1). See Bélair v. Gottschlich, 2008 ABQB 47, 42 C.B.R. (5th) 280.

[38] I conclude from this review of reported cases that s. 178(1)(a.1)(i) will apply where there is direct proof of intentional infliction of harm or where such intent can be reasonably inferred on the facts.

[39] Without the intentional infliction of harm as the basis for the judgment the section does not apply, as in Floros.

[40] In all the reported cases of assault, the section was found to apply.

[41] As this court noted in Simone at p. 522:

Paragraph (a) is essentially an administration of justice concept. The liabilities caught by it will be in relation to criminal or quasi-criminal matter. [Emphasis added.]

[42] The respondent here was convicted of aggravated assault and the civil judgment against him is based on that same assault.

[43] In my view, it matters not whether there was one punch or ten. The requirements of the statute will be satisfied if the respondent intended to inflict bodily harm. Similarly, it is immaterial whether the bodily injury is inflicted with a fist or a weapon, provided there is direct or circumstantial evidence of an intention to inflict bodily harm.

[44] The evidence in this case established that the appellant was not involved in the fight that broke out between the two groups. He had left the vicinity of the fight and called for police assistance on his cell phone. The respondent, who was physically much bigger than the appellant, ran up to him at this point, and punched him with a closed fist once in the head with sufficient force to cause the appellant to lose consciousness and fall to the ground. In my view, it does not matter whether the appellant’s permanent brain damage resulted from the punch or from the impact of his head against the curb when he fell unconscious to the ground. When one person hits another with a closed fist with sufficient force to cause the unsuspecting recipient of the punch to lose consciousness and fall to the ground, it cannot be seriously doubted that the person intended to inflict bodily harm.

[45] The motion judge erred when she stated, at para. 33 of her endorsement:

Put another way, is there a concerted effort to inflict bodily harm in this case to import the abhorrent conduct that the legislation intended?

[46] On the plain language of the statute, the appellant is only required to demonstrate “bodily harm intentionally inflicted” – nothing more. In particular, he is not required to prove that the circumstances in which the bodily harm was intentionally inflicted were sufficiently offensive to social mores to justify withholding the protection of bankruptcy. The statute does not require the appellant to demonstrate “a concerted effort”, show particularly “abhorrent” conduct, or take account of sympathetic factors that might apply to the bankrupt. Had that been the Legislature’s intention, the language of the statute would have been different.

[47] Were a court required to take account of such factors, the statute would have contained language directing such considerations. The text could have provided, for example, “bodily harm intentionally inflicted in egregious circumstances” or “bodily harm intentionally inflicted in circumstances that require social condemnation” or “where, in the court’s discretion, an order of discharge should not be released.” However, there is no such language in the statute.

[48] There is no doubt that the consequences of the events of April 19, 2005 are tragic. The respondent is left with a crushing debt, and the appellant is left with permanent brain damage. Nevertheless, it is not for the court to weigh the relative blameworthiness of the respondent’s conduct in relation to the quantum of the debt he must bear.

[49] The language of the statute is clear. Where a civil damage award is in respect of bodily harm intentionally inflicted, the bankrupt is not released from such judgment by an order of discharge.

[50] The motion judge committed a palpable and overriding error in concluding, on the facts of this case, that the respondent did not intentionally injure the appellant.

[51] I would allow the appeal, set aside the motion judge’s order and substitute an order granting the appellant the relief sought in paragraphs one through three of the Notice of Motion.

[52] The appellant is entitled to his costs in this court fixed in the sum of $7,500 inclusive of disbursements and HST as well as his costs below.

[53] If counsel are unable to agree on what those costs should be the appellant may proceed to have those costs assessed.

Released: October 31, 2013 “JMacF.”

“J. MacFarland J.A.”

“I agree David Watt J.A.”

“I agree Gloria Epstein J.A.”