Court File and Parties

COURT FILE NO.: CV-15-520150 DATE: 20170531 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JOSEPH CAMPISI, Applicant AND: HER MAJESTY IN RIGHT OF ONTARIO AS REPRESENTED BY THE ATTORNEY GENERAL OF ONTARIO and the INSURANCE BUREAU OF CANADA, Respondents

BEFORE: Justice Edward P. Belobaba

COUNSEL: Peter Murray and Rocco Galati for the Applicant Daniel Guttman and Padraic Ryan for the Attorney General of Ontario Jeff Galway and John Mather for the Insurance Bureau of Canada

HEARD: May 2 and 3, 2017

Constitutional Challenge to ss. 267.5(1) and 280 of the Insurance Act

1The applicant, Joseph Campisi, challenges the constitutionality of two automobile accident provisions in the Insurance Act [1]: s. 267.5(1) which limits the pre-trial recovery of lost income to 70 per cent of gross income [2] and s. 280 which grants sole jurisdiction to the Licence Appeal Tribunal (“LAT”) to resolve Statutory Accident Benefits Schedule (“SABS”) disputes, subject only to appeals on questions of law or applications for judicial review. [3]

2Mr. Campisi says that the impugned provisions violate ss. 15 and 7 of the Charter of Rights [4] and further, that giving comprehensive jurisdiction to LAT to decide SABS disputes and eliminating the parallel court option violates s. 96 of the Constitution Act, 1867 [5].

The impugned provisions

(1) Section 267.5(1)

3Section 267.5(1), capping the pre-trial recovery of lost income to 70 per cent of gross income, first appeared in 1996 in legislation that restored a limited right to sue in tort for economic losses. The first version of this provision capped the recovery of lost income before trial to 80 per cent of net income. The second version, in 2010, changed the cap on recovery for accidents after September 1, 2010 to 70 per cent of gross income. [6]

(2) Section 280 and LAT

4Every auto insurance policy issued in Ontario is statutorily deemed to provide no-fault accident benefits according to a prescribed schedule. [7] The SABS sets eligibility criteria, severity thresholds, and benefit payment amounts. Between 1990 and April 2016, any SABS dispute that was not resolved by mediation could be decided by arbitration before the Ontario Insurance Commission, later replaced by the Financial Services Commission of Ontario (“FSCO”), or by a proceeding in the courts.

5In 2014, the provincial legislature adopted one of the key recommendations of the Cunningham Report [8] and amended s. 280 of the Insurance Act so that effective April 1, 2016 all SABS disputes would be resolved solely by LAT, subject only to appeals on questions of law or applications for judicial review. [9] The court option was eliminated.

Decision

6For the reasons that follow, the application is dismissed. The application fails because Mr. Campisi has no standing to bring this proceeding. The application also fails on the merits. Neither ss. 267.5(1) nor 280 of the Insurance Act breaches ss. 15(1) or 7 of the Charter; nor is LAT’s dispute resolution jurisdiction in violation of s. 96 of the Constitution Act, 1867. I will explain each of these points in turn.

Analysis

(1) No standing

7Mr. Campisi is a personal injury lawyer. He has not established a private interest standing to bring this application. He has not been injured in an automobile accident. He is not claiming for lost income. Nor is he disputing a SABS benefit before LAT. Indeed, as a personal injury lawyer, he has little to do with SABS disputes. As his paralegal Cesar Carranza explained during cross-examination on his affidavit (because no affidavit was filed by Mr. Campisi) their law firm is only retained “on the cases where there is a viable lawsuit or the injury is likely to be catastrophic” and “rarely, very rarely” does it deal with people who have SABS complaints. [10]

8Mr. Carranza points to the fact that Mr. Campisi drives an automobile and “has a concern for the welfare of all accident victims.” But this is not enough under the applicable case law. Mr. Campisi is not directly affected by ss. 267.5(1) or 280 of the Insurance Act and as such lacks private interest standing to bring this constitutional challenge. [11]

9Mr. Campisi also lacks public interest standing. As the Supreme Court made clear in Canada (Attorney General) v. Downtown Eastside Sex Workers United Against Violence Society [12] public interest standing may be granted in the court’s discretion if the following three prerequisites, in combination, are satisfied:

(i) There is a serious justiciable issue raised; (ii) The applicant has a real stake or a genuine interest in the issue; and (iii) In all the circumstances, the proposed application is a reasonable and effective way to bring the issue before the courts. [13]

10Mr. Campisi does not satisfy the second prerequisite. He has not demonstrated that he has a real stake or genuine interest in the constitutional validity of the two provisions in question. [14] As already noted, Mr. Campisi did not file his own affidavit. And no court has ever granted public interest standing to an applicant in the absence of any direct evidence that he or she has a “genuine interest” in the case.

11Mr. Campisi also fails to satisfy the third prerequisite. I am not persuaded that in all the circumstances, the proposed application is a reasonable and effective way to bring these constitutional issues before the courts. In my view, there are other reasonable and effective ways to bring these issues before the courts.

12For example, with respect to the s. 267.5(1) challenge, the application record contains the affidavits of two individuals who claim to have been directly affected by s. 267.5(1) – one filed by Ms. Vanderkop who was injured in an automobile accident in 1997 and whose case has now been litigated to completion [15] and the other filed by Mr. Gerritsen who was injured in a motorcycle accident in 2014. Both of these deponents, as well as any one of the thousands of other persons who are injured in motor vehicle accidents in this province are more directly affected by the legislation than the applicant and could bring a challenge to the constitutionality of the impugned legislation, either in a proceeding against their insurer or, as here, by way of a stand-alone application for a declaration. [16]

13The same can be said about s. 280 and the SABS disputes before LAT. Here as well, there are literally thousands of claimants who are actually and directly affected by this legislation. These claimants do not even have to bring an application in Superior Court. They can challenge the constitutionality of s. 280 in their submissions to LAT. Indeed, the case law makes clear that raising the constitutional issue before the very tribunal that is resolving the dispute is the preferred route because then the reviewing court has the full benefit of the tribunal’s reasons for decision as well as a “rich, fully developed record in hand.” [17]

14In short, denying the applicant standing to pursue this challenge will not risk immunizing ss. 267.5(1) and 280 of the Insurance Act from judicial scrutiny.

15There is a further reason why in my view this application is not “in all the circumstances … a reasonable and effective way to bring the issue before the courts.” The factual underpinning for the constitutional claims that are being advanced is grossly inadequate. There is little to no evidence about the impact or effect on accident victims of the pre-trial income recovery limitation in s. 267.5(1) and absolutely no evidence about s. 280 and the actual workings of the LAT dispute resolution system and its effects on actual claimants. The Supreme Court has made clear that “Charter decisions should not and must not be made in a vacuum” and that “the absence of a factual base … is fatal.” [18]

16The applicant relies on the decision of the Federal Court in Galati v. Canada (Governor General) [19] where Mr. Galati was granted public interest standing to challenge the Governor General’s decision to give royal assent to federal legislation amending the Citizenship Act [20]. However, as the court explained, that was not a challenge involving the Charter:

[T]his proceeding does not engage any issues pursuant to the Charter. There is no Charter challenge, no question of section 1 evidence. All counsel stress that the issue before this Court is both narrow and discrete. In addition, the well-understood caution against the adjudication of constitutional issues in a vacuum is not triggered … The Court has all the necessary legislative facts before it. There is no missing factual matrix. [21]

17Here the required factual matrix is missing.

18When I add ‘the absence of a factual matrix’ to the reasons already stated, I have no difficulty exercising my discretion against Mr. Campisi and concluding that this is not a case for public interest standing.

19If I am wrong in this regard, I would still dismiss the application on the merits. I can find no breach of ss. 15(1) or 7 of the Charter or s. 96 of the Constitution Act, 1867. I will explain each of these conclusions in turn.

(2) No breach of section 15(1) of the Charter

20Section 15(1) of the Charter provides as follows:

Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

21In order to determine whether a law discriminates contrary to s. 15(1) of the Charter the court must first ask if the impugned law creates a distinction on the basis of a prohibited or analogous ground. If it does, the court must then decide if the distinction has the effect of creating or perpetuating an arbitrary disadvantage based on an individual’s membership in a group identified by a prohibited or analogous ground. [22]

22This application fails at the first step. Neither ss. 267.5(1) nor 280 draws a distinction based on a prohibited ground enumerated in s. 15(1) of the Charter or on any analogous ground. More specifically, and contrary to the applicant’s submissions, neither of the impugned provisions discriminates between persons based on their physical disability. Auto accident victims may well be seriously injured and physically disabled. But there is nothing in either of the statutory provisions in question that draws lines on this basis or singles out persons with disabilities for different or discriminatory treatment.

Section 267.5(1)

23Section 267.5(1) caps the recovery of pre-trial income loss to 70 per cent of gross income if the motor vehicle accident occurred on or after September 1, 2010 and 80 per cent of net income if the accident occurred before September 1, 2010. There is no limit on recovery of damages for economic loss for the post-trial period.

24The pre-trial limitation on recovery applies whether the accident victim is physically disabled or not and regardless of the severity of any injury. And the fact that auto accident victims are subject to this limitation while, for example, home accident victims are not, is not a distinction based on disability. It is a distinction based on the cause or place of the injury which is not a prohibited ground under the Charter. [23] As this court concluded in Hernandez, [24] “the type or category of accident victim is not an enumerated or analogous ground protected by s. 15(1) of the Charter.” [25]

25The s. 15(1) challenge to s. 267.5(1) does not succeed.

Section 280

26The above analysis also applies to s. 280. There is nothing in s. 280 that discriminates on the basis of disability or any analogous ground. The fact that insured persons with SABS disputes may be physically disabled and are required to proceed before LAT and cannot go to court (except as already noted) is not a distinction on the basis of disability. The Supreme Court held in Nova Scotia (Workers’ Compensation Board) v. Martin [26] that the distinction between those who are able to enforce legal rights in the court system and those who are part of an administrative scheme is not a distinction based on disability. [27]

27The Court of Appeal dealt directly with s. 15(1) of the Charter and SABS in Daley [28] where it noted the following:

Virtually all statutory provisions make distinctions. The no fault benefit provisions in the Schedule could not work if distinctions were not made among the various persons whose disabilities entitled them to some form of no fault benefit. The principle of equality underlying s. 15 is not offended whenever a distinction is drawn by legislation. Equality is put at risk only where the distinction discriminates against an identifiable group on the basis of the grounds identified in s. 15 … [29]

28The applicant’s s. 15(1) challenge to s. 280 does not succeed.

(3) No breach of section 7 of the Charter

29Section 7 of the Charter provides that “Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.”

30A court considering a challenge under s. 7 must apply a two-step test. First, does the law deprive the person of life, liberty or security of the person? Second, if it does, is this deprivation in accordance with the principles of fundamental justice? The onus is on the party challenging the legislation at both steps. [30]

31Here, the applicant has filed little to no evidence about any deprivation of life, liberty, or security of the person in the application or operation of ss. 267.5(1) or 280. In any event, the s. 7 challenge to the impugned provisions fails on the law. The case law is clear that neither a statutory limitation on tort damages nor the elimination of a court option deprives an accident victim of his or her right to life, liberty or security of the person.

32I will explain.

Section 267.5(1)

33In Whitbread v. Walley [31], the B.C. Court of Appeal considered a challenge to sections of the federal Shipping Act that limited recovery for personal injury damages. The plaintiff argued that if he was deprived of full compensation for his injuries by the operation of the statute he would be unable to purchase care and assistance and would thus suffer a deprivation of liberty and security of the person.

34McLachlin J.A. (as she then was), concluded, in essence, that tort claims are proprietary in nature and that the right to sue for damages for personal injury is not protected under s. 7 of the Charter. She then added the following:

The matter may be viewed in another way. The deprivation of life, liberty and security of person which the plaintiff has suffered is not caused by ss. 647 and 649 of the Canada Shipping Act. Rather, it was caused by the accident. The plaintiff’s physical and psychological loss arose independently of the impugned provisions and will, in large part, continue, regardless of whether those provisions apply or not. What the limitations on liability in ss. 647 and 649 cause is not the plaintiff's physical loss of liberty and security, but his inability to recover more than a stipulated amount of money from the persons legally responsible for the accident. While money, as already noted, may almost always be argued to affect a person's liberty and security, that is an indirect and incidental effect not contemplated by s. 7 of the Charter. [32]

35This decision was affirmed on appeal. [33] I therefore conclude here as well that the limitation on pre-trial recovery of income loss in s. 267.5(1) does not deprive the applicant of his right to life, liberty or security of the person and therefore does not breach s. 7 of the Charter.

Section 280

36Nor does the elimination of the court option in s. 280 offend s. 7 of the Charter. Section 7 does not extend to property interests and an injured person’s right to security of the person is not violated by a law that restricts his or her ability to access the courts to recover damages for personal injury claims.

37In Filip v. Waterloo [34] the Ontario Court of Appeal specifically held that s. 7 of the Charter does not embrace the right to bring an action for the recovery of damages for personal injury. The Court said this:

In combination, s. 284(5) of the Municipal Act, which requires notice in writing to an urban municipality to be given or sent within seven days, and s. 284(6), which excuses failure to give timely notice in the absence of prejudice to the municipality in all cases of death and of injury caused other than by snow or ice upon a sidewalk, operate, if constitutionally valid, to take away Daria's right of action against the city. The appellants submitted that the deprivation of Daria's right to restitution in integrum, in the form of financial compensation for a tort committed against her, constituted a deprivation of her right to security of the person. In my view, however, this submission cannot prevail against the formidable array of authority, in this province and elsewhere, for the proposition that the right to security of the person under s. 7 does not embrace the civil right to bring an action for the recovery of damages for personal injury: [case citations omitted]. [35]

38The same point was made by the Court of Appeal in Rogers v. Faught [36]:

[Section] 7 of the Charter does not embrace the right to bring an action for the recovery of damages for personal injury. A civil action is economic and proprietary in nature and as such outside the range of interests protected by s. 7 … [37]

39In sum, the legislative requirement that all SABS disputes be resolved at first instance by LAT without giving claimants the option of going to court does not breach s. 7 of the Charter.

(4) No violation of section 96 of the Constitution Act, 1867

40Section 96 of the Constitution Act, 1867 which provides that “ [t]he Governor General shall appoint the Judges of the Superior, District, and County Courts in each Province ” is a constitutional safeguard that works to limit the kinds of cases that can be decided by provincial agencies and tribunals.

41In Re Residential Tenancies Act [38] the Supreme Court set out a three-part test for determining when s. 96 of the Constitution Act, 1867 allows jurisdiction to be conferred on an administrative tribunal:

(i) Does the power or jurisdiction “broadly conform” to a power or jurisdiction exclusively exercised by a superior, district or county court at the time of Confederation? (ii) If so, is it a judicial power? and (iii) If so, is the power either subsidiary or ancillary to a predominantly administrative function or necessarily incidental to such a function? [39]

42The second step is not in issue. LAT obviously exercises a judicial power when it decides a SABS dispute. The focus here is on the first and third steps.

43If the historical inquiry in the first step leads to the conclusion that the power conferred on a tribunal does not conform to a power exercised exclusively by a superior court at the time of Confederation, “that is the end of the matter” and the jurisdiction of the tribunal will be sustained. [40]

44The first step requires the court to look beyond the remedies in question and focus on the “type of dispute” that is involved – that is, the focus must be on “the subject matter rather than the apparatus of adjudication.” [41]

45Here the dispute that is being resolved by LAT is not simply “a contractual dispute” of the type that ordinarily fell within the jurisdiction of superior courts at the time of Confederation. To characterize SABS disputes as ordinary contractual disputes that existed in 1867 - as the applicant tries to do - is not only overly broad but, frankly, disingenuous. To begin with, modern-day insurance policies are not ordinary, freely negotiated contracts. They are “statutory contracts” that do not reflect the words of the parties but “the words of the statute or of the regulation.” [42] However, I need not dwell on this point.

46There is a more obvious point that in my view is determinative.

47The disputes that LAT is resolving are disputes about the availability of statutorily prescribed no-fault accident benefits. This is a novel power or jurisdiction that did not exist in 1867 because neither automobiles nor automobile insurance existed in 1867. And certainly not statutorily prescribed no-fault automobile accident benefits.

48Just as the establishment of youth courts in Reference re Young Offenders Act (P.E.I.) [43], was found to be a “novel jurisdiction” that was not within the power of the superior courts at the time of Confederation, the resolution by LAT of SABS disputes is also “part and parcel of a [comprehensive provincial auto insurance] scheme designed to respond … to … a novel concern of society.” [44]

49I therefore conclude that the applicant’s s. 96 challenge to s. 280 of the Insurance Act and LAT fails at the first step of the Residential Tenancies test. The type of dispute that LAT is deciding did not exist in 1867. And because “new powers or jurisdiction are not part of the core of jurisdiction protected via s. 96 of the Constitution Act, 1867” this finding alone is “dispositive of the matter.” [45]

50The s. 96 challenge also fails at the third step of the Residential Tenancies test – whether the resolution of SABS disputes by LAT is “necessarily incidental” to the achievement of a broader policy goal. As the Supreme Court noted in Residential Tenancies:

It is possible for administrative tribunals to exercise powers and jurisdiction which once were exercised by the s. 96 courts. It will all depend on the context of the exercise of the power ... the powers may be necessarily incidental to the achievement of a broader policy goal of the Legislature. In such a situation, the grant of judicial power to provincial appointees is valid. [46]

51In my view, it cannot be seriously contested that the resolution of SABS disputes by LAT is necessarily incidental to the broad policy goals that led the provincial legislature to establish threshold no-fault automobile insurance in the first place.

52In Sobeys Stores [47], the Supreme Court upheld the jurisdiction of a provincial labour standards tribunal to decide unjust dismissal appeals involving non-unionized employees because this jurisdiction was necessarily incidental to the legislature's broader policy goal of providing minimum standards of protection for non-unionized employees and a speedy system for dispute resolution. [48]

53Here as well, the SABS dispute resolution jurisdiction that has been granted to LAT is necessarily incidental to the stated goal of providing automobile accident victims with speedy no-fault benefits coupled with a quick and efficient system of dispute adjudication. Also, in a larger context, LAT’s jurisdiction over the resolution of SABS disputes is necessarily incidental to the overall system of automobile accident insurance regulation.

54There is therefore no basis for the applicant’s s. 96 challenge to s. 280 of the Insurance Act.

(5) Unwritten constitutional principles do not assist

55Unwritten constitutional principles, including the rule of law, may help in interpreting the text of the written constitution, but they do not provide an independent basis for striking down statutes. In British Columbia v. Imperial Tobacco [49], the Supreme Court rejected a similar challenge that was premised on the argument that modifications to the common law of tort violated unwritten constitutional principles. The Court dismissed the claim and expressly held that there was no constitutional right to the common law status quo. [50]

Conclusion

56I therefore conclude as follows. The applicant, Mr. Campisi, lacks both private and public interest standing to bring this application.

57Even if this court in its discretion had granted public interest standing, the application would have failed on the merits. Neither ss. 267.5(1) nor 280 of the Insurance Act are in breach ss. 15 or 7 of the Charter or s. 96 of the Constitution Act, 1867.

Disposition

58The application is dismissed.

59Costs are sought by the Attorney General but not by the Insurance Bureau of Canada. If the question of costs cannot be resolved, I would be pleased to receive brief written submissions – from the AG within 10 days and from the applicant within 10 days thereafter.

60My thanks to counsel on both sides for their assistance.