The Trilogy Cap Re-secured - Lee v Dawson 2006 BCCA 159
Leave to Appeal dismissed 2006 CanLII 35806 (S.C.C.)
The cap on damages for non-pecuniary loss was entrenched
by the Supreme Court of Canada in 1978 by the trilogy of cases and
has remain unchanged and is presently at approximately $311,000.00
CAD or so (see Statistics for Litigators by Rich Rotstein and Ian
Wollach). This amount is applied in the most serious of losses including
those of paraplegics and quadriplegics and provides a decreasing
scale for damages for less and less serious injuries. Unlike our
American counterparts, we do not have an unbridled range of damages
even for the most severe of cases.
Recently, the British Columbia Court of Appeal announced
reasons for judgment and Lee v. Dawson 2006 BCCA 159 which
included the plaintiff's charter arguments and attempted to challenge
the upper limit of non-pecuniary loss damages. The jury at trial
had awarded $2,000,000.00 for general damages but had not been instructed
on the upper limits. The trial judge replaced this verdict with
a judgment of $292,600.00 for non-pecuniary loss (the highest amount
at that time pursuant to the trilogy).
The plaintiff appealed and sought a substituted award
of $2,000,000.00 to conform to the jury's assessment. The Court
of Appeal dismissed the appeal and stated that the upper limit of
damages established by the trilogy in the Supreme Court of Canada
cases back in 1978 were binding upon the Court of Appeal of British
The Supreme Court of Canada then dismissed the application
for leave to appeal with costs and the conditional leave to cross-appeal
was dismissed with costs on October 19, 2006.
The plaintiff had argued that the rough upper limit
of the trilogy could be revisited and that the Court of Appeal could
overturn the trilogy and that rough upper limit could be extended.
The defendants in turn also appealed for various items including
a reduction in management fee and tax and sought to have three of
the damage awards reduced. The plaintiff's arguments centered on
s.15 of the Charter which indicated that such upper limits were
in breach of the Charter because the affect of such application
discriminates between classes of persons injured in tort actions
founded in negligence. The decision for the Supreme Court of Canada
in Thornton (Next Friend of) v. Prince George School District
No 57  2 S.R.C. 267, Andrews v. Grand & Toy Alberta
Ltd.  2 S.C.R. 229 and Arnold v. Teno (Next friend
of)  2 S.C.R. 287 ("the trilogy") predate the
entrenchment in the Constitution of the Canadian Charter of Rights
and Freedoms. The Charter values, it was argued, were inconsistent
with this finding.
Further the plaintiff argued that the rough upper
limit was a guideline and not a strict rule of law and asked the
court to examine the underpinnings of same. The Court of Appeal
in Lee v Dawson found quite clearly that it was bound by
the Supreme Court of Canada as per ter Neuzen v. Korn 
3 S.C.R. 674 where the Supreme Court of Canada observed that the
rough upper limit is to be applied as a rule of law. As per La Forest,
Sopinka, Gonthier, Cory, McLachlin and Iacobucci JJ, "Whether
the jury is or is not advised of the upper limit, if the award exceeds
the limit the trial judge should reduce it to conform with the "cap"
established, adjusted for inflation. In the present case it was
reasonable for the trial judge not to give an instruction on the
upper limit, but since the damages awarded for non-pecuniary losses
far exceeded that limit, he ought to have reassessed the award.
In Lindal v. Lindal [1981) 2 S.C.R. 629, the Supreme Court
of Canada had also found that the Court of Appeal had correctly
determined the appropriate level of damages for non-pecuniary loss
in that case to be $100,000 and was correct when it replaced the
trial court's award of $135,000.00. The Supreme Court of Canada
in Lindal indicated, "The award did not depend upon
the gravity of the injury alone. Its purpose was not to compensate
for loss of amenities, but rather to provide a substitute for those
amenities in order to ameliorate the victim's condition and make
his life more bearable. Inflation, however, could be a factor in
considering whether to exceed the upper limit."
The defendant's appeal in Lee v. Dawson was
also dismissed on the basis of the facts of the case and the decision
maintained in the regard. Further, the trial judge had dismissed
the defendant's complaints regarding the failure to award a structured
settlement in the action. The trial judge was found that there was
no suggestion that the plaintiff's parents were spending the plaintiff's
money and that there was merit in the plaintiff's argument that,
on the one hand, the defendant suggested that the plaintiff was
not sophisticated enough to handle money and that on the other hand
he had to be sophisticated enough to save for his retirement after
the age of 65. The plaintiff satisfied the trial judge that a structured
settlement was not in the plaintiff's best interest and she declined
to make such an order. The Court of Appeal went on to indicate that
the decision of the trial judge was consistent with the view that
the best interests of the plaintiff were demonstrated as a matter
of evidence. In this case, the trial judge found that questions
of fiscal irresponsibility on the part of the plaintiff or his family
were not of concern. The defendants did not demonstrate any error
in principle and the conclusion reached by the trial judge was open
to her on the evidence.
The trial judge had found that she was bound by the
trilogy and quoted Sopinka J. in ter Neuzen v. Korn (supra) "while a trial judge does not sit in appeal of a jury award,
the trilogy has imposed as a rule of law a legal limit to non-pecuniary
damages in these cases. It would be wrong for the trial judge to
enter judgment for an amount that, the matter of law, is excessive.
While it is true that the matter can be corrected on appeal, an
appeal may be unnecessary if the correct amount is fixed at trial."
The plaintiff's submissions in Lee v Dawson at the Court of Appeal level centered around the fact that, for
less serious injuries, juries are not advised of the cap. Therefore,
those who are seriously injured are treated differently because
the cap is mentioned to the jury and imposes a differential treatment
with the result that seriously injured plaintiffs are not properly
compensated for their loss. The cap creates favoured classes and
sub-classes based on the severity of the plaintiff's injury and
that this was impermissible. In the same vein, reference was made
to a medical malpractice case in Alabama in Moore v. Mobile Infirmary
Association 592 So. 2d 156. Analogy was made to the cap in Canada.
Further analogies were made to those with mental injuries as apposed
to physical injuries as well as the fact that that the upper limit
does not apply in defamation cases.
The Court of Appeal, however, found that there is
more to the rationale for the cap than full compensation for pecuniary
loss. The Court endorsed the perspective that full compensation
for non-pecuniary losses as meaningless and argued the danger in
that such losses, by their nature, cannot be fully restored. Further
non-pecuniary awards are intended to provide solace and are not
dependent upon severity of the injury and that the purpose is not
compensatory but rather the objective is to provide a substitute
for a lost amenities in an effort to improve the victim's condition
and to make the his/her life more bearable. The upper limit is not
meant to be a valuation of the assets that have been lost by a plaintiff.
Such assets do not have a number value and objective evaluation
is impossible. The Court of Appeal quoted the Supreme Court of Canada
in Lindal, supra, wherein it was stated:
"It is true that the Court in Andrews spoke of exceeding the limit of $100,000 in 'exceptional circumstances'.
The variety of possible fact situations is limitless, and it would
be unwise to foreclose the possibility of ever exceeding the guideline
of $100,000. But, if the purpose of the guideline is properly
understood, it will be seen that the circumstances in which it
should be exceeded will be rare indeed. We award non-pecuniary
damages because the money can be used to make the victim's life
more bearable. The limit of $100,000 was not selected because
the plaintiff could only make use of $100,000 and no more. Quite
the opposite. It was selected because without it, there would
be no limit to the various uses to which a plaintiff could put
a fund of money. The defendant, and ultimately, society at large,
would be in the position of satisfying extravagant claims by severely
The Court of Appeal in Lee found that the non-pecuniary award
provided no direct relationship between degrees of damages sustained
and the quantum of the non-pecuniary damages that is appropriate.
The Court of Appeal found that the comparative groups as used by
the plaintiff in this case though were not well aligned.
In Lindal, the court found that there was no
justification for exceeding the upper limit of $100,000.00 "at
The Court of Appeal in Lee v. Dawson stated
"I agree with the plaintiff and the intervenor that the time
may have come for the rationalization or conceptual underpinning
for having a rough upper limit on non-pecuniary damages to be re-examined.
However, I am not persuaded that it is open to this Court to proceed
on the footing that the trilogy establishing the rough upper limit
is not binding on us. Some of the submissions made by the appellant
and the intervenor advocating a reconsideration of the rough upper
limit seem to me to be compelling but, in the end, this Court cannot
overturn the trilogy.
The Supreme Court of Canada dismissed the leave to
appeal. It is not yet time apparently to overturn the trilogy and
to reexamine the rough upper limit. The cap has been securely fastened
again for the foreseeable future.
Kim E. Stoll
The Freight Broker in Canada: The
Unregulated Field May Have Its Pitfalls
As a matter of custom and practice, the term "freight
broker" (synonymous with "load broker") has developed
a distinct meaning in Canada as one who arranges the transportation
of goods by road carriage from a shipper to a consignee, for compensation.
Freight Brokers - like Freight Forwarders - Essentially
Have 'Free Reign'
Freight brokers are essentially unregulated. This
could be a 'good thing' - or maybe not - for the broker. While the
unregulated field readily allows new entrants and arguably trims
costs [in a low profit margin world], the absence of codification
as to standards of care and liability may prove to be problematic
for the unwary freight broker who fails to implement a deliberate
and consistent business model and method of operation. Unlike the
statutory governance of motor carriers, there is no 'uniform bill
of lading' or contract deemed applicable to freight brokerage operations.
The freight broker is not handed specific liability guidelines or
defenses. Rather, the freight broker must fend for itself with the
'freedom of contract' that comes with operating in what is essentially
an unregulated world. The liability of the freight broker is simply
assessed on the basis of agency principles. In acting as an agent,
the freight broker undertakes responsibility for arranging the transportation
of the cargo from origin to destination, and must obey and competently
perform his instructions with due care and skill. As will be seen
below, this lack of regulation, combined with frequently undocumented
and casual 'middleman' dealings between shipper and carrier may
not bode well for the freight broker in terms of liability exposure.
I made mention of the fact above that the freight
brokerage industry is essentially unregulated. While freight brokers
are not required to hold operating licenses in Ontario they are
required to hold as trust funds monies received from a shipper or
consignee earmarked for payment as freight charges billed by a performing
The freight brokerage industry in Canada has not yet
published standard trading conditions at the industry level for
freight brokers to "opt into" and incorporate in their
dealings with shippers. The National Transportation Brokers Association is presently the only Canadian association representing the interest
of companies who primary business is load brokerage.
The Standard of Care of the Freight Broker
The liability of a load broker has been analogized
to that of a travel agent in arranging the performance of services
If a person agrees to perform some service
or work, he cannot escape contractual liability by delegating
a performance to another . . . but if his contract is only to
provide or arrange for the performance of services then he has
fulfilled his contract if he has exercised due care in the selection
of a competent contractor...
Accordingly, it is clear, on the basis of agency principles
that a broker will be liable for the incompetent dispatch of instructions
to a carrier resulting in non-delivery or late delivery. Liability
could also potentially extend to failing to timely place a claim
against a carrier, in time, if this formed part of the expectation
placed upon the freight broker in the circumstances.
In considering the expectations and obligations on
the part of a load broker, it should be noted that there is a surprising
lack of case law on the point in Canada. A polling of industry participants
as concerns the scope of the duty of a freight broker suggests that
absent an agreement to the contrary that the freight broker is (in
addition to the competent conveyance of instructions) expected to:
- ensure that the motor carrier being dispatched
is licensed to perform the transportation service requested, and
- advise the motor carrier of a value of a shipment,
if advised of the value by the consignor or consignee, for the
purpose of ensuring that the motor carrier has sufficient road
haulers liability insurance to cover the value of the goods being
And so it should follow, one would think, that matters
should work easily for the freight broker given its apparent limited
involvement. After taking preliminary details concerning a shipment,
and thereafter providing a quotation to a shipper (whether prior
to or after securing the services of a motor carrier) the freight
broker then as a matter of course and practice simply faxes a 'load
confirmation sheet' to the motor carrier covering the essential
performance parameters. Subsequently, the motor carrier attends
at the shipper's location. Following delivery, the motor carrier
invoices the load broker, attaching a copy of the proof of delivery.
As a rule, the load broker would have independently invoiced the
consignor or the consignee effecting a low profit margin or markup
over the carrier's charges.
Simple enough. What could possibly go wrong? Lots.
Things may not have been properly documented from the standpoint
of the freight broker.
The Exposure [Unintended or otherwise] of the Freight
It follows from the foregoing that there are potential
pitfalls and gaps for the freight broker.
- Could the Freight Broker be Regarded as a Carrier?
First, the freight broker may face a claim that it is liable,
as a carrier, strictly by virtue of the loss or damage to the
cargo. The shipper may express surprise that the load was 'brokered'
and argue that it gave the broker the business, trusting 'it and
only it' with the shipment. The freight broker, if confronted
with assertions that it was understood by the customer to have
been a carrier, may have difficulty if it is found that this undertaking
was given. The broker is then saddled with the significant exposure
faced by carriers. The broker may not be able to assert the 'uniform
bill of lading' defences. There is no known case law on point.
The problem in this respect arises from the fact that paragraph
1 of the Uniform Bill of Lading provides that "the carrier
of the goods described in this contract is liable for any loss
or damage to goods accepted by the carrier or the carrier's agent
except as provided in this Schedule".
Whether the broker, liable as a carrier, (but who did not issue
a bill of lading or for that matter actually accept the goods)
can rely on the Uniform protections would then seem to fall on
the question as to whether the actual carrier is considered on
the facts of the case to have been the 'agent' of the broker in
receiving the goods for carriage. The problem here will be obvious:
the broker may face the problem of not having the same limitation
of liability defense that the actual carrier [who is responsible
for the loss] will have. As a carrier the broker will have certain
common law defenses [i.e. exonerations from liability] but if
liable, it may not have the limitation of liability defense that
the carrier would have (for lack of a declared value on the contract
of carriage). The broker is then caught in the middle, in effect
underwriting the difference between the amount of the loss and
the carrier's limit of liability, the carrier presumably 'being
on the hook' for at least the limitation amount.
Certain freight brokers often run the risk of 'crossing the line'
into carrier responsibility by publishing bills of lading forms
[often provided to their customers in 'sets'] with their name
and/or logo and by appearing to be a carrier in the separate and
distinct as between the shipper and it and it and the carrier
- How can the Freight Broker be liable even if acting
only as an intermediary agent?
There may be a potential exposure for the freight broker, tied
into the fact that it tends to exist on the basis of earning modest
mark ups on carrier freight bills over a volume of shipments.
This may lead to casual and undocumented exchanges and receipt
of instructions. This could lead to problems for the broker, as
There will always be a first time that a broker engages the services
of a particular carrier. The broker faces exposure to claim if
it is seen to be negligent in the selection of a carrier. Increasingly
brokers log onto, and make use, of Internet services such as LoadlinkTM for introductions to carriers. The freight broker should be prepared
to defend its selection of a carrier. Consider the case where
a carrier causes loss or damage to a shipment. The carrier may
be able to limit liability, and as such the affected cargo interest
may wish to make full its recovery by including a claim against
the broker for negligence in choosing the carrier involved. The
limited case law on the point would suggest that the duty extends
to the 'reasonable' selection of a carrier [whatever this might
mean], ensuring that the carrier is properly licensed, and, where
the value of the cargo in question is known, properly insured.
A concern for the freight broker is that in the event
of a claim coming forward for loss, damage or delay, it will not
necessarily be the case that it can simply claim 'middleman' status
seeking the carrier to be fixed with any and all liability. The
problem, essentially, is that as a middleman the broker has had
separate dealings with the shipper and with the carrier.
By way of illustration, assume the following set of
facts which shows how easily the freight broker could have exposure
to a claim:
- Your client is a freight broker.
- your client takes a phone inquiry from a shipper,
who provides a request for the shipment of a general description
of cargo (i.e. 'x' number of boxes, contents not disclosed) for
carriage between certain points, perhaps accompanied with an instruction
as to when the cargo is to be picked up and a date
by which the same must be delivered to destination1.
Assume in this case that your client is told to ensure that the
cargo will be ready for pick up on a Friday afternoon for delivery
to destination the following Monday. Assume further that the geography
between origin and destination is such that the shipment will
not always be in transit, but that at some point therefore that
the trailer in question is left stationary overnight by the carrier
while en route pending final delivery.
- Assume that your client does not have standardized
internal methods of recording or memorializing information and
requests received from a shipper. In essence, it trades only on
a 'shipment by shipment / instruction by instruction' basis and
information may be written down, 'somewhere', as and when received.
- After taking the above details verbally from the shipper, a representative from your client sends a freight
rate quote to the customer. The rate quote features standard conditions
in this illustration.
- Thereafter, a "carrier confirmation sheet"
is issued to the carrier listing the above pick up and delivery
- Assume however that a bill of lading is issued
by the pickup carrier and there was not a declared value endorsed
on same by the shipper.
- Assume that the trailer is stolen by unknown third
parties (of course for whom no recovery could ultimately be obtained)
and that there is then a cargo claim filed by the shipper customer.
As there was no declared value on the bill of lading
issued by the carrier it will seek to limit liability to the "Uniform
bill of lading" rate of $2.00 per pound of the goods in question.
This limitation amount may fall below the value of the lost shipment.
The freight broker may be left 'hanging' for the 'difference' by
virtue of its casual dealings with the shipper on the one hand and
the carrier on the other.
The shipper may assert that the freight broker was
negligent in its choice of a carrier (especially one used for the
first time) however presumably compliance with the aforementioned
standards would amount to some sort of a defense. The bigger problem
lies with the credibility issues with the shipper now 'conveniently'
announcing - post loss - that at the outset it had instructed the
freight broker to ensure that a certain minimum of protection and
security be afforded over the cargo while not actually in transit
pending delivery. As such, while the carrier may or may not have
employed security devices (i.e. pin locks, secured fencing, guard
supervision, restricted access to the area in question etc.) the
shipper might take the position that the goods were expected to
have enjoyed an enhanced level of security, or indoor storage or
the like - which, if complied with, would have prevented the theft
The risk here, and the essential concern, is that
in the commercial interest of keeping dealings separate and distinct
as between the shipper and the carrier the freight broker may assume
the risk of any difference in the receipt and dispensing of instructions
between the two. The shipper is, for example, not given the opportunity
to vet the carrier confirmation sheet given to the carrier to "sign
off" that any and all instructions contained therein are thorough
and complete. As such, the shipper might assert that verbal instructions
were provided at the front end and if these instructions (i.e. in
the nature of security required over the shipment) were not ultimately
conveyed to the carrier that this was simply the fault of the freight
What is then necessarily and essentially a volume
based business poses potential hazard. While the freight broker
might be held in a sympathetic light by virtue of a minimal markup
relative to what exposure it might take on, from the court's standpoint
"profit is profit" (or "consideration is consideration")
for the purposes of holding a freight broker to the standard as
agent. If found to have been given instructions, and having failed
to take reasonable steps to implement those instructions, then the
freight broker will be found liable for damages subject to the usual
mitigation and remoteness limitations thereon. As mentioned the
carrier will not always be liable for the full amount of loss to
provide an 'indemnify flow-through' for the broker.
The freight broker therefore has to be deliberate
with its business model and the capacity in which it acts. Standard
procedures should be adopted concerning memorializing the detail
of instructions received at the front end by the shipper. Certain
leading load brokers are now publishing service conditions for access and review on a website which codify the nature of the
services provided and the basis upon which rate quotations are provided.
By this approach the customer is requested to advise the freight
broker if there is anything by way of instruction not specifically
reflected in the rate quotation submitted to it. The idea is for
the freight broker to avoid liability for failure to communicate
special handling, storage, security instructions, cargo needs or
as to the value of a shipment to a carrier unless the customer has
advised the freight broker accordingly.
Additionally the freight broker should be deliberate
in laying the guidelines as to the responsibility of declaring a
value on a bill of lading. The classic load broker function would
suggest that this is left to the shipper to attend to when the carrier
issues a bill of lading at the loading dock. Where the load broker
gets involved in this regard it does so at its peril. This could
blur the lines between it acting only as an agent and acting as
a carrier. Even if not regarded as a carrier, this opens up a further
liability exposure on the broker, calling for a credibility assessment:
if no value was declared and there is a loss, with the limitation
calculation being relevant, the broker may then have to defend a
suggestion by the shipper that it was responsible to address a declaration
of valuation with the carrier. This will certainly be a gratuitous
exposure given the infrequency in which values are declared on bills
Service conditions may offer significant protection,
featuring limitations of liability or outright exonerations from
liability (for example, in the case of delay or consequential damage
claims brought against the freight broker). Most importantly they
will provide guidelines for shippers to understand who will be responsible
for what. Notice of claim requirements will also provide significant
Freight brokers should also take further protection
in standardizing, internally, the method in which instructions are
recorded from shippers such that it can be stated with some confidence
that if there is no writing internally with the broker as to an
instruction that the instruction was simply "never received".
By implementing standard practices and putting the
shipper to confirming details of needs in respect of the cargo,
in a uniform way, the broker will more readily avoid the credibility
issue pitfalls that seem to surface following a loss where for whatever
reason liability does not flow for the full amount of a claim to
the responsible carrier.
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