Law Times

Page 18 November 24, 2014 • Law Times www.lawtimesnews.com with a long-term disability (LTD) component from com- pany that later merged with de- fendant insurer. Policy provid- ed that in event of total disabil- ity, plaintiff would be entitled to $1,000 per month, subject to coordination of other public and private benefits. In March 2000, plaintiff suffered severe stroke rendering her totally disabled. Defendant processed her claim and began sending her monthly LTD payments of $1,000. Plaintiff 's father in- quired about effect of Canada Pension Plan (CPP) disability benefits on LTD payments. De- fendant advised that maximum amount of income that plaintiff could receive from all sources could not exceed $1,422.29, which was two-thirds of her gross monthly salary. In Sep- tember 2000, plaintiff was approved for CPP disability benefits in amount of $683 per month, effective July 2000. De- fendant treated CPP payment as "indirect benefit" and deducted from LTD benefit amount that combined CPP and LTD pay- ments exceeded $1,422.29, leaving LTD benefit of $739 per month. In December 2000, defendant concluded that mis- take had been made and ad- vised plaintiff that CPP benefit was "direct offset" to LTD ben- efit and that her monthly LTD payment was being reduced to $316.62. Plaintiff commenced action and brought motion for summary judgment for find- ing that CPP benefit payment was not direct offset from LTD benefit. Motion dismissed. CPP disability payment was direct, dollar for dollar, setoff. Provisions of plaintiff 's policy were clear and unambiguous in that regard. That meant that plaintiff 's $683 monthly CPP payment must be deducted di- rectly from her $1,000 monthly policy entitlement, leaving net monthly disability payment of $316 from defendant insurer. Holmes v. Desjardins Finan- cial Security Life Assurance Co. (Aug. 25, 2014, Ont. S.C.J., Edward P. Belobaba J., File No. CV-09-376116) 244 A.C.W.S. (3d) 690. PROPERT Y INSURANCE Damage excluded from coverage pursuant to clear and unambigu- ous faulty workmanship exclusion Action arose out of insurance coverage for property damage to log home owned by plaintiff. Damage was allegedly caused by negligent workmanship of contractor plaintiff retained to perform restoration work on premises. Plaintiff 's insurance policy was standard home- owner's policy issued by defen- dant insurer and arranged for by defendant broker. Plaintiff commenced action against in- surer based on alleged breach of contract of insurance and against broker based on alleged breach of contractual and fidu- ciary duty and failure to advise plaintiff in timely way that she had claim against insurer. De- fendants brought motion for summary judgment to dismiss action. Motion granted; action dismissed. There was no cover- age for alleged losses sustained by plaintiff under insurance policy. Damages plaintiff com- plained of in action against defendants were caused by contractor's failure to follow industry standard practices and take protective measures required by contract. Plain and simple reading of provisions of faulty workmanship exclusion revealed it was clear and un- ambiguous and should be given its plain and simple meaning. Faulty workmanship exclusion included within its scope dam- age to work that formed subject matter of contract and damages resulting from faulty work- manship related to work. There was nothing in wording of pol- icy and no compelling policy reason why resultant damage exemption was to be read into faulty workmanship exclusion. Damage to plaintiff 's house was excluded from coverage pursu- ant to clear and unambiguous wording of faulty workman- ship exclusion. Assuming dam- age was properly characterized as resulting damage, exception for resulting damage in prop- erty damage exclusion in policy could not extend coverage for such resulting damage in cir- cumstances where damage was caused by faulty workmanship. Terms of faulty workmanship exclusion excluded all damage resulting from faulty work- manship and trumped excep- tion for resulting damage in property damage exclusion clause. Exception for result- ing damage in property dam- age exclusion only applied to property that was damaged as result of something other than faulty workmanship. Damages to plaintiff 's property resulted from faulty workmanship and policy excluded coverage for damages incurred by plaintiff. As there was no primary insur- ance coverage, there could be no damages f lowing from any breach of broker's duty to plain- tiff. Monk v. Farmers' Mutual Insur- ance Co. (Jun. 27, 2014, Ont. S.C.J., E.J. Koke J., File No. CV- 11-093) 244 A.C.W.S. (3d) 694. Sale of Goods OBLIGATIONS OF SELLER Defendant failed to establish breach of implied condition of merchantable quality Plaintiff was manufacturer and supplier of commercial animal feed. Defendant was commer- cial rabbit farmer who asked plaintiff to prepare custom for- mula rabbit feed. Plaintiff sold custom formula rabbit feed to defendant. Defendant experi- enced sudden increase in rabbit deaths and illnesses. Defendant claimed feed was contaminated with vomitoxin and refused to pay for it. Plaintiff brought action against defendant for amount owing. Defendant brought counterclaim for dam- ages for negligence and breach of contract. Action allowed; counterclaim dismissed. Plain- tiff was awarded $26,097.08 as claimed. There had not been express term respecting quality or acceptable maximum level of mycotoxins in feed. Defen- dant failed to establish breach of implied condition of mer- chantable quality in s. 15 of Sale of Goods Act (Ont.). There was no evidence of any established tolerance level for vomitoxin in rabbit feed, nor any proven link between contamination levels in feed and problems with de- fendant's rabbits. Jones Feed Mills Ltd. v. Raivio (Jul. 21, 2014, Ont. S.C.J., D.A. Broad J., File No. 11-4922SR) 244 A.C.W.S. (3d) 744. TAX COURT OF CANADA Constitutional Law CHARTER OF RIGHTS Denial of disability tax credit did not perpetuate preju- dice or stereotyping Taxpayer had his left eye re- moved in 1938 and wore pros- thesis in that eye, although his vision in his right eye was above average. Taxpayer claimed dis- ability tax credit in respect of his 2012 taxation year. Min- ister of National Revenue de- nied claim on basis that tax- payer was not "blind" as used in s. 118.4(1)(b) of Income Tax Act (Can.). Taxpayer appealed on ground that s. 118.3 and s. 118.4 of Act breached s. 15 of Canadian Charter of Rights and Freedoms. Appeal dis- missed. Section 118.3 and s. 118.4 of Act did not breach s. 15 of Charter. Section 118.3 and s. 118.4 of Act created distinc- tion between people with less severe disabilities and people with more severe disabilities. Taxpayer's visual impairment caused him some personal dif- ficulties. Judicial notice was taken of existence of prejudice and stereotyping of people with less severe disabilities. Denial of disability tax credit did not perpetuate prejudice or stereo- typing suffered by less severely disabled people. Taxpayer did not provide evidence of finan- cial needs of less severely dis- abled people. Taxpayer did not show that line between people with more severe disabilities and people with less severe dis- abilities was not generally ap- propriate. Bleiler v. R. (Oct. 6, 2014, T.C.C. [Informal Procedure], David E. Graham J., File No. 2013-1924(IT)I) 244 A.C.W.S. (3d) 739. ONTARIO CRIMINAL DECISIONS Appeal GROUNDS Trial judge's reasons failed to analyze conflicting evidence Accused found guilty of breach of probation. Accused suffered from major mental illness. Trial judge ordered NCR assessment of accused. Probation officers testified that accused refused to abide by order because he feared surveillance from devic- es implanted in his body. Ac- cused also mistakenly claimed that probation order was under appeal. Trial judge found ac- cused NCR in single-sentence judgment. Summary convic- tion appeal court upheld trial judge's order. Appeal allowed and new trial ordered. Trial judge's reasons were insuffi- cient. There were multiple ways trial judge could have found accused NCR. Trial judge's rea- sons failed to analyze conf lict- ing evidence and explain which route he took to find accused NCR. R. v. Capano (Aug. 19, 2014, Ont. C.A., Gloria Epstein J.A., K. van Rensburg J.A., and G. Pardu J.A., File No. CA C56540) 115 W.C.B. (2d) 543. Charter of Rights SEARCH AND SEIZURE Litigating privacy issues would provide guidance to police and telecommunications industry in future Constitutionality of produc- tion orders to telecommunica- tions providers. Telecommu- nications providers bringing application pursuant to s. 24(1) of Charter to quash produc- tion order . Order requiring disclosure of information of over 40,000 subscribers to po- lice. Police applying to revoke orders under s. 487.01(5) in ex parte hearing and arguing Charter applications moot. Telecommunications providers seeking inter partes hearing of Charter application. Charter application to proceed inter partes despite mootness. Court had discretion to require con- tested hearing in suitable case. Litigating privacy issues would provide guidance to police and telecommunications industry in future. Ongoing adversarial relationship between police and providers existed. No judi- cial resources to date had been dedicated to litigation of priva- cy issues raised by production orders. Issues raised affected privacy rights of potentially 40,000 subscribers. R. v. Rogers Communica- tions Partnership (Jul. 16, 2014, Ont. S.C.J., Sproat J., File No. CRIMJ(P)299/14, C R I M J ( P ) 3 0 0 / 1 4 , C R I M J ( P ) 2 9 9 A / 1 4 , CRIMJ(P)300A/14) 115 W.C.B. (2d) 577. Indictment and Information JOINDER AND SEVERANCE Severance should not be granted where both parties engage in cutthroat defence Accused sought severance midway through murder trial in which he and his wife were charged with killing of his 10 year old son. Co-accused was stepmother of child and both accused engaged in cutthroat defence blaming each other. Severance was sought after at- torney for co-accused disclosed he came into possession of pho- tographs depicting that child was chained to bed by silver chain. Evidence had previ- ously been led and white chain was entered into evidence and mother of co-accused had in- dicated that he had seen child chained by accused with silver chain. Counsel for accused ar- gued he would have changed his cross-examination of mother, who also claimed that accused beat child but never told police, who denied seeing white chain that was previously entered into evidence. Accused argued that severance was required as picture of silver chain would have effect of rehabilitating evi- dence from mother and he was suspicious that co-accused or- chestrated late disclosure to her lawyer. Application dismissed. Court reasoned that case law has held that severance should not be granted in jury trials where both parties engage in cutthroat defence by blaming each other as that could lead to inconsistent verdicts. Court had no evidence supporting allegation that co-accused was attempting to manipulate proceedings by late disclosure and it was speculation that her counsel might be called to give evidence on that point in sepa- rate trial. It was not surprising that third party might have come forward with evidence given that both accused were attacking each other. Fairness requires that jury be allowed to assess credibility of mother of co-accused who testified in light of evidence that supported her testimony. Court also ques- tioned how cross-examination might have changed if counsel for accused was aware of pho- tographs at time. Court did not find that evidence would affect accused in making full answer and defence as counsel for ac- cused may have made tactical decision and such things could happen in joint trial when par- ties attack each other. R. v. Boothe Rowe (Mar. 10, 2014, Ont. S.C.J., Dawson J., File No. null) 115 W.C.B. (2d) 644. Motor Vehicles IMPAIRED DRIVING AND "OVER 80" Trial judge erred in finding that Crown was required to prove realistic risk of danger Crown appealed accused's ac- quittal on charge of impaired care or control. Accused could not be found and appeal took place without his presence. Ac- cused was in his van in middle of night. At some point, van left road and ended up facing in wrong direction, with its back wheels on grassy area between curb and sidewalk. Witness CASELAW

• Cover