2011 QCCA 85, 2011 QCCA 85

Unofficial English Translation Transamerica Vie Canada c. Rossignol 2011 QCCA 85 COURT OF APPEAL CANADA PROVINCE OF QUEBEC QUEBEC REGISTRY No. 200-09-006608-092 (200-17-007409-063) DATE: January 18, 2011 CORAM: THE HONOURABLE J.J. MICHEL ROBERT, C.J.Q. PAUL VÉZINA, J.A. DOMlNIQUE BÉLANGER, J.A. (AD HOC) TRANSAMERICA LIFE CANADA APPELLANT/INCIDENTAL RESPONDENT – Defendant v.

GUY ROSSIGNOL RESPONDENT/INCIDENTAL APPELLANT – Plaintiff JUDGMENT [ 1 ] THE COURT; - On the Appellant's appeal and the Respondent's incidental appeal from a judgment rendered on January 14, 2009, by the Superior Court, District of Quebec (the Honourable Madam Justice Suzanne Hardy-Lemieux), which allowed in part the Respondent's motion, ordered the Appellant to pay him $134 377.57 (with legal interest and the additional indemnity from the summons), ordered the Appellant to pay the contributions to the retirement security plan in accordance with the terms of the insurance contracts, and also ordered the Appellant to fulfil and honour all obligations set forth in the contracts for the duration of the Respondent's disability, for the period beginning on November 1, 2007. [ 2 ] Having examined the file, heard the parties and on the whole deliberated;

[ 3 ] For the reasons of Bélanger J.A. (ad hoc), with which Robert C.J.Q. and Vézina J.A. agree; [ 4 ] ALLOWS the principal appeal in part, without costs, for the sole purpose of replacing paragraph [156] of the trial judgment with the following paragraphs: [TRANSLATION] ORDERS Transamerica Life Canada to pay the amount of $ 23 224.17 to the Respondent, with interest and the additional indemnity from the summons; ORDERS Transamerica Life Canada to pay the amount of $111 153.40 to the Respondent, with interest and the additional indemnity as of the due dates of the benefits payable after the institution of the action. [ 5 ] STRIKES paragraph 157 of the trial judgment; [ 6 ] DISMISSES the incidental appeal, without costs. (

s) J.J. MICHEL ROBERT, C.J.Q. (

s) PAUL VÉZINA, J.A. (

s) DOMINIQUE BELANGER, J.A. (AD HOC ) Mtre. René Vallerand Donati Maisonneuve For the Appellant/Inciden tal respondent Mtre. Michel Lemieux Joli-Cœur Lacasse For the Respondent/Incidental appellant Date of hearing: November 2, 2010

REASONS OF BÉLANGER, J.A. [ 7 ] The Appellant appeals from a judgment rendered on January 14, 2009, by the Superior Court, District of Quebec (the Honourable Madam Justice Suzanne Hardy-Lemieux), which allowed in part the Respondent's motion, ordered the Appellant to pay him $134 377.57, with legal interest and the additional indemnity as of the summons, ordered the Appellant to pay the contributions to the retirement security plan, in accordance with the terms of the insurance contracts, and ordered the Appellant to fulfil and honour all obligations set forth in the contracts for the duration of the Respondent's disability, for the period beginning on November 1, 2007.

The dispute [ 8 ] The dispute concerns the

interpretation and application of a clause included in three disability insurance policies covering an insured's residual income loss after his or her return to work. [ 9 ] Below is the clause in question: [TRANSLATION] RESIDUAL INCOME LOSS "Residual income loss" means that: (

a) you are not totally disabled; (

b) you are gainfully employed; and (

c) you sustained a loss of income of 20% or more due solely to an injury or illness that occurred while the policy was in force. After the waiting period, the injury or illness need no longer be present and you need not be followed by a physician . [Emphasis added.] The facts [ 10 ] The Respondent is a general practitioner working in the Bas-Saint-Laurent and Gaspésie regions.

Following three health problems that resulted in a decrease of his income, he availed himself of three disability insurance policies to cover his residual income loss and the reimbursement of his office expenses. [ 11 ] As of December 5, 2002, the Respondent began having heart problems that led to a coronary bypass on February 4, 2003. He was on full leave from work until June 10, 2003, at which time he gradually resumed working. Subsequently, as recommended by his attending physician, he reduced his workload. He stopped receiving benefits on October 7, 2003, resulting in the dispute with the Appellant.

[ 12 ] In 2004, he instituted proceedings, alleging that he was still sustaining a residual income loss of more than 20%. In his view, he was entitled to benefits under his insurance coverage if he lost income due to his heart problems. [ 13 ] As of October 27, 2006, a herniated lumbar disc required surgery and resulted in full leave from work until the end of December 2006, when he gradually resumed work. [ 14 ] He subsequently developed cervical stenosis, which required him to undergo another operation on July 16, 2007.

He was on full leave from work until November 6, 2007, at which time he resumed his professional activities. [ 15 ] The Respondent's position is that, following his heart problems, he was never again able to work at his pre-disability pace. He therefore feels that he is entitled to claim residual income loss, on an uninterrupted basis, for that entire period.

Trial judgment [ 16 ] The trial judge believed that the Respondent was entitled to the payment of benefits, even if he was gainfully employed, as long as he sustained an income loss of at least 20% due to an illness or injury that began while the policy was in force . [ 17 ] After analyzing and interpreting the insurance policies in question, the trial judge added that the insured was entitled to the payment of benefits even if he was no longer ill or injured, provided he sustained an income loss of at least 20% with regard to his pre- disability income . [ 18 ] She concluded that, to the extent the Respondent's attending physician recommended he not work more than 35 hours a week, there was necessarily loss of income compared with what the Respondent was earning before his disability, especially since, as she noted from the evidence, he sometimes worked 60 to 70 hours a week prior to his illness. [ 19 ] Thus, she noted that, from October of 2003 to May of 2005, the Respondent continuously sustained income losses in excess of 20%. [ 20 ] She observed that the Respondent subsequently went through periods where he made no claims, his income losses being below 20%. [ 21 ] After observing that the insurance policies contained no provisions regarding the termination of payment of benefits for residual income losses, the trial judge believed that the Respondent sustained a residual income loss for most of the first three-year period and that a new waiting period for the second and third disability periods should not be imposed.

That conclusion is not challenged by the Appellant. Analysis of the grounds submitted [ 22 ] The Appellant challenged both the

interpretation of the insurance policies and the assessment of the facts and expert reports. [ 23 ] The Appellant alleged that the trial judge committed eight palpable errors. Certain groupings are warranted. [ 24 ] But first, it is not pointless to reiterate a well-established principle: in appeal, the Court may substitute its assessment for that of the trial judge only in the event of a palpable and overriding error. That principle is regularly restated by our Court [1] or even the Supreme Court:

[1] A proposition that should be unnecessary to state is that a court of appeal should not interfere with a trial judge’s reasons unless thereis a palpable and overriding error. The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trialjudge’s decision if there was some evidence upon which he or she could have relied to reach that conclusion. [2] Authority for this abounds particularly in appellate courts in Canada and abroad (see Gottardo Properties (Dome) Inc. v. Toronto(City) (1998), (ON CA), 162 D.L.R. (4th) 574 (Ont. C.A.); Schwartz v.

Canada, (SCC), [1996] 1S.C.R. 254; Toneguzzo-Norvell (Guardian ad litem of) v. Burnaby Hospital, (SCC), [1994] 1 S.C.R. 114; Van de Perre v. Edwards, [2001] 2 S.C.R. 1014, 2001 SCC 60). In addition scholars, national and international, endorse it (see C. A. Wright in “TheDoubtful Omniscience of Appellate Courts” (1957), 41 Minn. L. Rev. 751, at p. 780; and the Honourable R. P.

Kerans in Standards ofReview Employed by Appellate Courts (1994); and American Bar Association, Judicial Administration Division, Standards Relating toAppellate Courts (1995), at pp. 24-25). [3] The role of the appellate court was aptly defined in Underwood v.

Ocean City Realty Ltd. (1987), (BC CA), 12B.C.L.R. (2d) 199 (C.A.), at p. 204, where it was stated: The appellate court must not retry a case and must not substitute its views for the views of the trial judge according to what the appellatecourt thinks the evidence establishes on its view of the balance of probabilities. [4] While the theory has acceptance, consistency in its application is missing. The foundation of the principle is as sound today as100 years ago. It is premised on the notion that finality is an important aim of litigation.

There is no suggestion that appellate courtjudges are somehow smarter and thus capable of reaching a better result. Their role is not to write better judgments but to review thereasons in light of the arguments of the parties and the relevant evidence, and then to uphold the decision unless a palpable error leadingto a wrong result has been made by the trial judge. [5] What is palpable error? The New Oxford Dictionary of English (1998) defines “palpable” as “clear to the mind or plain to see” (p.1337).

The Cambridge International Dictionary of English (1996) describes it as “so obvious that it can easily be seen or known”(p. 1020). The Random House Dictionary of the English Language (2nd ed. 1987) defines it as “readily or plainly seen” (p. 1399). [6] The common element in each of these

definitions is that palpable is plainly seen. Applying that to this appeal, in order for theSaskatchewan Court of Appeal to reverse the trial judge the “palpable and overriding” error of fact found by Cameron J.A. must be plainly seen.

As we will discuss, we do not think that test has been met .1 1st question: Did the trial judge err in interpreting the insurance coverage? [25] After emphasizing that the insurance contracts at the heart of the dispute were very different from those that are regularlysubmitted to the courts, the trial judge noted that it was not a question of applying the definition of "total disability" but, rather, that of"residual income loss". [26] She believed that the purpose of the insurance coverage was to protect the insured's ability to earn the same income as before hisdisability.

She noted that whether the reduced work week was medically justified was beside the point and that the point was whether,while working in good faith, the insured earned the same income as before his disability. [27] According to the Appellant, the trial judge's

interpretation was erroneous, and she should have looked for the continuation of anillness or injury during the post-disability period. [28] That argument, however, was rightly set aside by the trial judge. The clause is clear: after the waiting period, there is no need forinjury or illness to remain. It is enough for the residual income loss to be a consequence of the injury or illness. [29] The trial judge accepted the opinion of the Respondent's attending physician, who, following the Respondent's heart surgery,recommended that the respondent reduce his workload .

[ 30 ] No error was made in interpreting the insurance policy with respect to the coverage offered.

The trial judge correctly ascertained that the insurance coverage was intended to compensate for residual income loss . [ 31 ] Similarly, she did not accept the testimony of the Appellant's cardiology expert, whose mandate was to evaluate whether the Respondent was medically required to limit his professional activities to 35 hours a week. [ 32 ] The rejection of that testimony was the direct consequence of how the coverage offered was interpreted. 2nd question : Did the trial judge make a palpable error in some of her findings of fact? [ 33 ] The Appellant alleged that the trial judge erroneously accepted that the Respondent worked about 70 hours a week during the pre-disability period. [ 34 ] The Respondent testified in that regard more than once, and the judge could draw that finding of fact from the evidence adduced. [ 35 ] It should be pointed out in passing that, in paragraph 1 of her judgment, the trial judge wrote [TRANSLATION] " 60 to 70 hours a week", whereas, in paragraph 12, she noted [TRANSLATION] " 70 hours a week, if not more", and, in paragraph 33, that the Respondent [TRANSLATION] "regularly worked 60 to 70 hours a week" . [ 36 ] It will be recalled that it is not up to appellate courts to question the weight given to each piece of evidence. [ 37 ] Besides, the trial judge addressed the matter of the number of hours worked purely for guidance purposes.

Its relevance, be it before or after the disability period, is highly relative, since the income loss is what must be considered, not the number of hours worked. It will also be noted that the parties reached an agreement on the Respondent's pre-disability income and on the variation in that income. [ 38 ] Consequently, there is no palpable and overriding error there. [ 39 ] The Appellant also tried to argue that the variation between the number of hours worked before and after the disability is not indicative of the decrease in income, while acknowledging that the Respondent did experience such a decrease.

In the Appellant's view, this is indicative of the drop income being due to something other than the cause put forward by the Respondent, namely, reducing his workload on the recommendation of his physician. [ 40 ] Yet, the Appellant was unable to identify any other cause that would explain the decreases income. That is no doubt the reason why the trial judge could not adopt the same solution as in Belzile v.

NN Compagnie d'assurances du Canada . [2] [ 41 ] It will be recalled that, in Belzile , the drop in income was due to a decrease in the number of the dentist's clients further to the arrival of a new dentist in the immediate vicinity, and to regional economic factors that had nothing to do with his illness. 3rd question : Did the trial judge make a palpable error in setting aside the opinion of the Appellant's public accountant? [ 42 ] The trial judge accepted the calculations performed by the Respondent over the months, which calculations were accepted by the Appellant as regards current income as opposed to business income .

She indicated it should be borne in mind that the Respondent was self-employed and did not run a business. In her view, the Respondent had been very meticulous in drawing up the tables respecting his claims.

[ 43 ] In short, she accepted across the board the calculation method of the Respondent, who said he used the same claim method for the contested periods as that accepted by the Appellant for the uncontested period. [ 44 ] She dismissed the entire report from the Appellant's public accountant, and listed a series of reasons, over 12 of them, for rejecting public accountant Bélanger's testimony and report.

It is perhaps not impossible that some of the trial judge's many criticisms of the public accountant are not wholly conclusive. [ 45 ] It remains that the expert testified that he evaluated the Respondent's income using the insurance companies' method, not the method provided for on the current income loss forms the Respondent had to fill out and send to the Appellant every month.

The expert admitted that he saw them too late. [ 46 ] It was up to the trial judge to assess all the evidence, and the Appellant did not show any palpable error in her assessment. [ 47 ] Moreover, there are multiple variables in all the evidence pertaining to damages. [ 48 ] There are three insurance policies, three events and two different ways of calculating the damages, with, as further variables, the income adjustments required on the tax forms, which should be done monthly, not annually, in order to comply with the spirit of the insurance coverage, as well as variable expenses throughout the period concerned.

In addition, both the Respondent and the Appellant's experts redid their calculations more than once. [ 49 ] A palpable error must necessarily be obvious.

Not only did the Appellant not demonstrate an obvious error, but it did not demonstrate what effect any of the alleged errors would have on the quantum of the claim. [ 50 ] Essentially, the Appellant wants the action to be dismissed, which cannot be done, for even its expert acknowledges that certain amounts would be due if there were a residual income loss throughout the period, as accepted by the trial judge. 4 th question : Did the trial judge err in ordering the Appellant to pay interest and the additional indemnity as of the date of summons, that is, May 10, 2004? [ 51 ] There is an error in this respect in the trial judgment. [ 52 ] Indeed, according to the Appellant, and undisputed by the Respondent, only the amount of $23 224.17 was owing on the date of the summons in 2004.

The amount of $111 153.40 reportedly became due over time. A correction will therefore be made. Miscellaneous [ 53 ] The conclusion in paragraph 157 of the judgment, ordering the Appellant to pay the contributions to the Respondent's retirement security plan, is of no use, since they are not due. [ 54 ] Since Counsels did not submit any arguments respecting the incidental appeal, it will be dismissed without costs. [ 55 ] For these reasons, I propose to: [ 56 ] ALLOW the principal appeal in part, without costs, for the sole purpose of replacing paragraph [156] of the trial judgment with

the following paragraphs: ORDERS Transamerica Life Canada to pay the amount of $ 23 224.17 to the Respondent, with interest and the additional indemnity from the summons; ORDERS Transamerica Life Canada to pay the amount of $111 153.40 to the Respondent, with interest and the additional indemnity as of the due dates of the benefits payable after the institution of the action. [ 57 ] STRIKES paragraph 157 of the trial judgment; [ 58 ] DISMISSES the incidental appeal, without costs. (

s) Dominique Belanger, J.A. (AD HOC) [1] For recent applications of this principle, see Sealrez inc. v. Luxwood Auto trim inc. , 2010 QCCA 1227 , JE 2010-1248 (C.A.) at paras 11 and 12 ; P.L. v. Benchetril , 2010 QCCA 1505 , [2010] R.J.Q. 1853 (C.A.) at paras 23 et seq. ; 3377466 Canada Ltd. v. Aviva Insurance Company of Canada/Aviva, compagnie d'assurances du Canada , 2007 QCCA 1585 , J.E. 2007-2245 (C.A.) at paras 20-21 ( Housen v. Nikolaisen , [2002] 2 S.C.R. 235 , 2002 SCC 33 at paras 1-6 ; see also H.L. v. Canada (Attorney General) , [2005] 1 S.C.R. 401 , 2005 SCC 25 at paras 52-55 ).