Criminal contempt sentencing, travel insurance and bad faith and the Crime Victim Assistance Act

 

This week on Legally Speaking with Michael Mulligan:

Two men charged with criminal contempt for breaching an injunction prohibiting interference with the construction of the Trans Mountain Pipeline plead guilty and were sentenced.

Neither man had a previous criminal record.

The first man was a 69-yead old, retired university professor. He had climbed a tree and used a bicycle lock around his neck, and cables, to secure himself to the tree in order to slow construction of the pipeline. The police used a cherry picker to remote him.

The second man was 21 yeas old. He provided no details of his personal circumstances. He attempted to use a “sleeping dragon” that was buried beside him to secure himself to the ground. He failed to properly secure himself within the device and so the RCMP were able to easily remove his hands and arrest him.

Aggravating sentencing considerations included the fact that the injunction had been in place for some time, that the men had breached the injunction in a public way, including by the conduct of media interviews. Mitigating factors included that they neither man had a previous record and both plead guilty.

The judge pointed out that sentences for criminal contempt generally increase over time until compliance is achieved.

The 69-year-old man was sentenced to 21 days in jail, while the 21-year-old received 14 days in jail. Distinguishing factors included the time and effort to remove them and the degree to which they had publicised their breached the court order.

Also on the show, the BC Court of Appeal overturned an award of punitive damages against an insurance company that denied a travel insurance claim and then managed to pay the hospital involved less than ordinarily billed by not telling them that that the claim had, eventually, been allowed.

The incident involved a man who purchased travel insurance before a trip to Reno. He experienced a loss of consciousness (known as a “syncope”) while drinking at a bar and fell hitting his neck. He was hospitalized for 12 days and had a pacemaker installed. The hospital bill was $293,127.60.

For two years, and with little investigation, the insurance company denied the claim alleging that it was caused by drinking alcohol, despite medical evidence to the contrary. Eventually the insurance company relented, once a court case had been commenced, and agreed to cover the claim. Without telling the hospital that they had agreed to cover the claim, the insurance company got the hospital to agree to apply an “uninsured discount” and settled with them for $47,000.

This was upsetting to the man because of the excellent care he had received from the hospital.

Insurance contracts require the insurance company, and the insured, to act in good faith. This means, amongst other things, that the insurance company must act fairly and reasonably. They must give as much consideration to the interests of the insured as their own interested.

The trial judge concluded that the insurance company had not done this and awarded $100,000 in punitive damages against the insurance company.

The BC Court of Appeal overturned this award on the basis that the insurance company eventually agreed to pay the claim and because the duty to act in good faith applies only to the insured person and not, for example, the hospital which may have been misled when it agreed to reduce its bill.

Finally, on the show, the Crime Victim Assistance Act, and how it relates to civil claims for injuries caused by criminal activity, is also discussed.

 

Legally Speaking with Michael Mulligan is live on CFAX 1070 every Thursday at 10:30 am. It’s also available on Apple Podcasts, or wherever you get your podcasts.

An automated transcript of the show:

Legally Speaking Mar 10, 2022

Adam Stirling [00:00:00] It’s time for Legally Speaking. Joined by Michael Mulligan, Barrister and Solicitor with Mulligan Defence Lawyers Morning, Michael, how are you doing?

Michael T. Mulligan [00:00:06] I’m doing great. Always good to be here.

Adam Stirling [00:00:08] What’s on the agenda for us today?

Michael T. Mulligan [00:00:11] Well, the first thing I want to comment on, I was listening to a question that a caller asked a few minutes ago about what authority there would be to prevent things like trucker blockade of the Legislature. And indeed, the Criminal Code has provisions which would capture exactly that kind of conduct. In particular, section 423 of the Criminal Code makes it a criminal offence to block or obstruct a highway. If your purpose in doing that is to force somebody to do something, they have a lawful right not to do or to compel somebody to abstain from doing something. So, you cannot blockade a highway in order to try and get your way. That amounts to a criminal offence. In addition, we have the events of mischief with which some of the people from Ottawa are charged. There are various ways somebody can commit mischief, including Section 431(b), which is obstructing interfering with a person’s lawful use or enjoyment or operation of property and so in, so that would prohibit you, for example, for example, sitting outside somebody’s house, blaring your horn all night long; you’re clearly going to interfere with their lawful use and enjoyment of their property.

Adam Stirling [00:01:34] Yeah.

Michael T. Mulligan [00:01:35] And if somebody were to engage in that kind of behaviour or indeed if a police officer had reasonable grounds to believe that somebody was about to commit an offence, either of those offences, they would have the authority to arrest the person under 495 of the Criminal Code. And so, there are existing criminal court offences that would prohibit things like blocking a highway or engaging in sort of behaviour, like honking your horn all night long, driving around the Legislature. And so that is why they’re one of the reasons why there was some controversy about whether the Emergency Measures Act was necessary. Some would argue that, well, look, there are already these provisions in the Criminal Code that make that kind of conduct a criminal offence.

Adam Stirling [00:02:28] Yeah.

Michael T. Mulligan [00:02:28] And so the police could simply arrest somebody who was doing it or somebody to prevent them from doing it. So, we do have existing provisions that would capture what’s being contemplated there.

Adam Stirling [00:02:40] Yes, fascinating. There was a report, I believe it was yesterday or the day before in the Toronto Star, but a large denomination of cryptocurrency being frozen or seized in relation to an as yet unspecified criminal investigation that arose from the convoy matter in Ottawa. I’m not sure how it works exactly, with warrantless surveillance of bank accounts under the or in the emergency period. But the more time that transpires between the emergency period and now, the more. I think that surveillance powers may have been the issue, but I don’t know.

Michael T. Mulligan [00:03:10] Sure. And even in non-emergency periods, there are provisions for things like production orders to get access to records like that. And there are existing provisions in the criminal code that make it an offence to do things like counsel an offence.

Adam Stirling [00:03:26] hmm.

Michael T. Mulligan [00:03:26] And so even in non-emergency periods, you can’t encourage other people to go and block the highway to get your way. The act of encouraging or assisting is itself a criminal offence. You become a; you could become a party to it.

Adam Stirling [00:03:38] Mm-Hmm.

Michael T. Mulligan [00:03:39] So just like you can’t fund somebody’s bank robbery efforts, you’re also not permitted to fund somebody’s effort to go and block the highway to get their way and force some activity, that’s not allowed. Right? Somebody saying you want to invest in my bank robbery by paying for my mask? You can’t say, sure. You know, just give me five percent or, you know, I hate the Royal Bank or something. None of that’s allowed. And so, the same principles would apply if somebody was giving money to somebody so that they could go and block the highway to enforce their political will.

Adam Stirling [00:04:12] Absolutely.

Michael T. Mulligan [00:04:12] So we do have provisions dealing with it.

Adam Stirling [00:04:14] Perfect. Well, thank you, Michael.

Michael T. Mulligan [00:04:16] Yeah, those same provisions tie into the next story I wanted to talk about because in the context of applications for injunctions to prevent blockades, one of the things again discussed was, look, those provisions of the criminal court I just referenced already are there. And so, courts have considered those in the context of applications for injunctions and recognize that they could also apply. But the fact that there is a criminal code provision that might make a particular blocking activity a criminal offence already is not a reason to deny an application for an injunction. Part of the analysis would be that an injunction could be broader or tailored in a way to prevent something from happening; like order people to stay back a certain number of meters or this kind of thing. So that there’s clarity about what can be done and what’s not permitted. And so, one of the cases I wanted to talk about was a recent sentencing decision with respect to two people convicted of criminal contempt, who pled guilty to that offence in the context of blocking the Trans Mountain pipeline expansion project in 2021.

Adam Stirling [00:05:34] Yes.

Michael T. Mulligan [00:05:35] This being, of course, before it was washed out by the atmospheric river. And before we’re trying to avoid sending money to Mr. Putin to continue to kill people in this day in his war.

Adam Stirling [00:05:48] Yeah.

Michael T. Mulligan [00:05:49] And so this was the sentencing of two people. One of the individuals there was a 69-year-old retired professor. The other individual was a 21-year-old man, neither of whom had any criminal record. And the 69 year old professor, he, in contravention of the injunction that prevented people from interfering with the efforts to build this pipeline, had climbed up a tall tree and used a bicycle lock to connect himself to it, resulting in a police using a cherry picker to come up and cut off the u-lock and cable to get this man down. And the other individual had laid down, and it looked like he tried to make it look like his, he was connected to this thing called a sleeping dragon.

Adam Stirling [00:06:40] Oh, you see arm locking device? Yeah, I’m familiar with it.

Michael T. Mulligan [00:06:44] Oddly, it looks like he wasn’t actually connected to it. He just, I guess, trying to look like he was connected to us. They were able to just lift him out. He wasn’t actually in that thing, whatever exactly it amounted to. And so, both of these individuals pled guilty, and the Crown had requested a sentence of 21 days in jail for the university professor retired and 14 days in jail for the other younger man. And so, it resulted in the court analyzing those submissions and the considerations for sentencing of that kind. And some of the salient points that the court made included the fact that sentences for criminal contempt would be expected to increase over time. And again, the court applied that principle right. The idea is, look, you know, full well, we’ve tried lesser sentences and they’re not effective. And so simply, the court will increase sentences as time goes by in order to ensure compliance. There was also an interesting discussion that the court engaged in. The 69-year-old university professor had proposed that he be permitted to do one hundred community work service hours rather than to receive a week less in prison. And he made a submission to the judge that, that would show him how to act legally in the community and would encourage him to do so. The judge had no time for that, indicated that in the judge’s view, the sentiment was entirely disingenuous and hardly deserved consideration. Referencing the fact that this man had otherwise led a law-abiding life, he didn’t have a criminal record. And, you know, he was obviously a well-educated person who was a retired professor. And the court commented that he understood how to change government policy and how to do that in a legitimate way, and that instead of doing so, he has taken it into his own hands to force his will against lawful commercial activity for his own ends, and so rejected that idea that community work service, rather than a portion of the jail sentence, would be appropriate. Also, with respect to both of the men, one of the, the judge found it to be a mitigating circumstance that both had pled guilty. So that would have reduced what otherwise might have been imposed by way of a sentence.

Adam Stirling [00:09:15] yeah.

Michael T. Mulligan [00:09:15] But in both cases, one of the aggravating factors was that both men had engaged in sort of public discussions about their contemptuous activity, in the media. And the judge took note of their activity in that regard. And of course, one of the elements of criminal contempt is to do so in a public fashion.

Adam Stirling [00:09:43] Yeah.

Michael T. Mulligan [00:09:43] Shows the effect of undermining respect for the rule of law.

Adam Stirling [00:09:46] You know, almost to inspire others.

Michael T. Mulligan [00:09:48] Yeah, yeah, that’s right. You know, it’s a different thing. If somebody sort of, you know, hasn’t read the order, it didn’t know about it or breached it in some non-criminal way.

Adam Stirling [00:09:57] Yeah.

Michael T. Mulligan [00:09:57] Where the objective would be, getting the person in compliance, right? Yeah, but when you have somebody intentionally publicly doing something, that’s what brings it into the realm of criminal contempt. And so, the end of the day for these two men, the sentences imposed were as the requested 21 and 14 days, and the judge commented that but for the fact that the Crown had suggested 14 days for the younger man, it’s clear that the judge would likely have imposed a sentence in excess of that. Bearing in mind that that man had also engaged in the sort of public discussions about the contemptuous activity. And so, I thought that was just worth noting because it’s a recent case dealing with that. And of course, we have these hundreds of people who are charged with breaching similar orders with respect to logging here in Vancouver Island. And so that will be very interesting to watch, but this is a recent example of sentencing and those principles dealing with the Trans Mountain pipeline.

Adam Stirling [00:10:59] Interesting. Michael Mulligan. We’ll take a quick break. Legally Speaking, we’ll continue in just a moment on CFAX 1070.

[00:11:05] COMMERCIAL.

Adam Stirling [00:11:06] Although I was an ordinary guy, I’m not perfect. I don’t always get things right. Sometimes I need to be corrected. It’s important that we turn to experts in various fields to better understand them, which is one of the many reasons I enjoy our legally speaking segment every week with Michael Mulligan from Mulligan Defence Lawyers moving on from criminal contempt of court cases. Michael, what’s next on the agenda?

Michael T. Mulligan [00:11:25] Next on the agenda is a case involving travel insurance and the concept of good faith and the way those interplay is. This insurance contracts are described as contracts that involve this element of good faith, and it can go both ways. From an insured person’s point of view, you’ve got an obligation to be truthful to your insurer and tell them promptly about, you know, what happens with respect to the circumstances of a claim, for example. And insurance companies equally have a duty. They have a duty of good faith with respect to people that have purchased the insurance policy. And that can include a number of things like they were required to do a reasonable investigation. They required to be prompt. They’re required to make a balanced and reasonable decision. And one of the lines that is used by courts is they must give consideration to the interests of the insured just as they give consideration to their own interests. So, the idea is they have to act in good faith, they can’t be able to get you. And this case, which just went to the Court of Appeal, involved a man who purchased travel insurance prior to a trip to Reno, Nevada. Very sadly, in 2015.

Adam Stirling [00:12:37] Yeah.

Michael T. Mulligan [00:12:37] Very sadly. The man was having a drink at a bar, experienced a brief loss of consciousness, fell, hit his neck, then wound up in the hospital for 12 days, where they had to install a pacemaker and engage in emergency surgery.

Adam Stirling [00:12:50] Wow.

Michael T. Mulligan [00:12:51] Terrible circumstance for him.

Adam Stirling [00:12:53] Yeah.

Michael T. Mulligan [00:12:54] It resulted in a medical bills of $293,000dollars, and so he made a claim against his travel insurance, right?

Adam Stirling [00:13:04] Yeah.

Michael T. Mulligan [00:13:05] And another thing to note is that often the person you’re buying, the travel insurance from them will have some friendly name like in this case, right, the seller of the insurance. But ultimately, there’s an entity which is the company providing the actual coverage. And in this case, it was Lloyd’s Underwriters and Industrial Alliance Insurance and Financial Services Inc. And so, this claim came in, and the insurance company denied the claim, saying that they believe the injury the claim was caused by being intoxicated. With what the judge found to be very little investigation into that. And despite the fact that there were doctors suggesting that that alcohol did not play any factor, he needed a pacemaker and had some event, he just happened to be in a bar.

Adam Stirling [00:13:58] Yeah.

Michael T. Mulligan [00:13:58] It resulted in a man eventually got a lawyer. So, the hospitals and so on were trying to collect from him. Collection agencies were after him. He got a lawyer, lawyer wrote to the insurance company, and shortly before the trial was going to start about whether the company had to pay this medical bill or medical bills. The insurance company finally, after two years, got a blood alcohol specialist and then changed their tune and decided that he was covered, but without telling the hospitals that in fact, there was insurance coverage. They then went about trying, successfully negotiating a discount in terms of what they would pay the hospitals and obtained what was described as an uninsured discount of 78%.

Adam Stirling [00:14:47] Huh.

Michael T. Mulligan [00:14:47] I guess the hospitals realized that hard to collect all this money from somebody who has no insurance. So eventually the Lloyd’s managed to get these the hospital to agree to accept $56,429, rather than the two hundred and something thousand that was originally billed. And so that’s the basis upon which the matter got to trial. The man argued, hey, this is unacceptable. These doctors provided and nurses provided wonderful care, saved my life. Then you’ve sort of, you know, his view was cheated them out of what they deserved for all their good work by suggested that I was uninsured. That’s not right. And you didn’t pay me for two years, causing major stress and dislocation as the collection agencies were after him, and the trial judge agreed with the man. In addition to giving him $10,000 for mental suffering, the trial judge described the conduct of the insurance company as shocking, egregious, and motivated by profit, and found it to be contrary to that principle of good faith. Well, the insurance company didn’t like that decision, and they appealed it to the Court of Appeal. The man also appealed. By this time, sadly, he had passed away, so eventually it was his daughter and his estate. By the time this potentially got to the Court of Appeal and argued that in addition to being in bad faith because it was in bad faith, the insurance company should have had to pay all of his legal expenses. It wasn’t fair that he had to pay those expenses. Well, sadly for the man and his daughter, the insurance company in the Court of Appeal succeeded on their appeal and the reason for that; the essence of it was that the Court of Appeal found that the trial judge had relied on the conduct of the insurance company with respect to the hospital. You know, by not telling them that the man had was in fact now going to be covered by insurance, suggesting that he should get those uninsured discount, but found that the bad faith wasn’t with respect to the man. It was potentially with respect to the hospital. And despite how the man felt about that, that couldn’t be the basis for a finding of bad faith to support an award to him for the conduct of the how they eventually settled the claim. And they found that it was significant that prior to trial, they changed their tune, even though it took more than two years and agreed the man wasn’t impaired. And that wasn’t the cause of it but managed to settle the claim despite the fact it was much less. And despite the fact that the man was very upset, that the doctors and nurses the hospitals weren’t paid what they had originally billed. That wasn’t enough to find the claim for bad faith with respect to him. And then the Court of Appeal went on to say that he wasn’t entitled to all of his legal fees being paid on the basis that really, that’s just a matter of interpreting what the contract says, and the contract doesn’t provide for that. And so, decisions about fees being paid would be simply a matter of analyzing costs which are awarded irregularly. And so, the net result is that the insurance company does not have to pay the estate $100,000 for bad faith. And the outcome for the hospital that cared for the man would be that the applied a 78% discount and the insurance company won’t have to pay for that. So, it certainly doesn’t look like the shiniest day in the world for the insurance company.

Adam Stirling [00:18:31] No.

Michael T. Mulligan [00:18:31] But.

Adam Stirling [00:18:33] But when doesn’t it?

Michael T. Mulligan [00:18:33] But I guess at the end of the day, they’re not on the hook for the very large potential award for bad faith. So, I guess narrowing that concept and making it clear that the bad faith has to be with respect to the insured person.

Adam Stirling [00:18:51] There we go. We’ve got two and a half minutes left.

Michael T. Mulligan [00:18:54] Sure. So, the last one I could probably summarize in that time, the last case I wanted to talk about was a man who was rendered a quadriplegic as a result of being seriously assaulted. And he made a claim under the Crime Victim Assistance Act, which in BC permits money to somebody who’s a victim of crime to pay for things like their care needs, and that act, Some people may not know has a provision that where money is paid out, if the individual who was the victim of crime sues and manages to collect money to compensate them for their injury, the province can come and take back some of the money that was paid to them under that Crime Victim Assistance Act. And this was a case where this man was so seriously injured he did sue the was a man injured, it sounds like at a house party. So, he sued like the homeowners and the people that put on the party and the people that assaulted him.

Adam Stirling [00:19:47] Yeah.

Michael T. Mulligan [00:19:48] And eventually came to a settlement with all of those people for much less than what all of his future care would include. And when the settlement was agreed to, there was a representative from the Crime Victim Assistance Act for the province who participated in the settlement, and the agreement involved the people being sued, paying back the province some $200, sorry $312,000, they had expended for caring for this man, but the province had agreed as part of the settlement that they would keep paying for the man’s care going forward, they wouldn’t make him use all of the money he got as part of the settlement before they would keep paying for his care. And the case that was just decided found that when the province did so, it amounted to a contract and the province wasn’t able to later come along, as they were trying, and change their position. So the point was that when a case like that is settled and settled in this way, with the province agreeing to the terms of it that can amount to a contract, which was binding on the province, and they can’t simply come along later as they were trying to do and change their position to make the man use the settlement funds he received to pay for all of his care needs without any further money coming from the Crime Victim Assistance Act. So the outcome of all of it is that the man will continue to get help paying for his daily care and nursing and all the other things that he will need for the rest of his life and won’t be required to spend all of the money he got in his settlement before he would continue to receive those benefits because the province agreed not to do that when the settlement was made.

Adam Stirling [00:21:26] Michael Mulligan for Mulligan Defence Lawyers, Legally Speaking, during the second half of our second hour every Thursday here on CFAX, Michael, a pleasure, as always.

Michael T. Mulligan [00:21:34] Thank you so much. Have a great day.

Adam Stirling [00:21:36] You too.

Automatically Transcribed on March 14, 2022 – MULLIGAN DEFENCE LAWYERS