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Administrative - Competing Court-Tribunal Jurisdiction (2). Keulen v. Allstate Insurance Co.
In Keulen v. Allstate Insurance Co. (Div Court, 2024) the Divisional Court dismissed the novel argument that a recently-created administrative regime, which excludes previously court-available common law punitive damages jurisdiction, was unconstitutional for that reason:Issue #2 – Elimination of Punitive Damages Is Not Unconstitutional
[21] The Appellant’s argument on this point is as follows:(a) the Supreme Court of Canada has found that punitive damages are available at common law;
(b) the Supreme Court of Canada has found that the legislature must use clear language to remove traditional jurisdiction from the Superior Court of Justice to an administrative tribunal: Chrysler v. Competition Bureau, 1992 CanLII 68 (SCC), [1992] 2 SCR 394; Idziak v. Canada, 1992 CanLII 51 (SCC), [1992] 3 SCR 631;
(c) the legislature of Ontario has not used clear language to remove claims for punitive damages from the jurisdiction of the Superior Court of Justice, and therefore the laws of Ontario that have this effect are unconstitutional. [22] With the greatest of respect, this argument obviously lacks merit. The first two propositions are unremarkable. The third argument is incorrect in its premise, and in error in its conclusion in any event.
[23] First, punitive damages are a remedy, not a right of action. Punitive damages are available at common law. The legislature may vary the common law – indeed, legislation governing rights, obligations and remedies is, by its nature, amendment to or enactment of the common law. The status of a legal principle as arising from common law does not, by that fact, insulate it from legislative amendment.
[24] Second, the legislature used clear language removing jurisdiction over claims arising in respect to statutory accident benefits from the Superior Court of Justice and placed that jurisdiction in the LAT: this is set out, in clear language, in s. 280 of the Insurance Act, cited above. Particular remedies available to the LAT – whether awards of benefits, interest, costs, or special awards, are aspects of the exclusive jurisdiction that the LAT has over these claims.
[25] Third, the LAT has the authority to adjudicate SABS claims in accordance with the SABS Schedule and the governing legislation and regulations. That regime does not include authority to award punitive damages. Prior to April 1, 2016, the Financial Services Commission of Ontario (“FSCO”) and the Ontario Superior Court had parallel, concurrent jurisdiction over statutory accident benefits claims. Thereafter, this jurisdiction was conferred exclusively upon the LAT as a result of amendments to the Insurance Act: Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, SO 2014, c. 9, Sch. 3, s. 14. Under the former regime, the Superior Court had jurisdiction to award punitive damages and the FSCO did not. The legislature opted not to authorize the LAT to award punitive damages in the same manner that FSCO did not have that authority: as found by the Court of Appeal in Stegenga, this was a policy choice made by the legislature.
[26] Fourth, if the legislature had failed to remove jurisdiction from the Superior Court of Justice over SABS claims, the remedy would not be a finding of unconstitutionality, but rather, that the Superior Court still retains jurisdiction.
[27] I decline to undertake a “deep[er] dive” into a constitutional question that is so obviously misconceived. The Appellant’s first two arguments are trite law. The third argument has no basis in law and no authority in support of it. For decades, governments have wrestled with balancing compensation for accident victims with the overall cost of insurance. The SABS Schedule limits compensation available to claimants. Punitive damages are a non-compensatory award: Whiten v. Pilot Insurance Company, 2002 SCC 18, para. 79. The legislature has not eliminated non-compensatory awards for claims arising under the SABS Schedule, but rather it has limited them. I see no basis for the Appellant’s arguments that such limitations are constitutionally infirm.
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