lundi 24 septembre 2012

The court may grant moral damages despite the unintentional error of the defendant

by Adam Eidelmann
Cabinet Gamliel, avocats

In many cases, the attribution of moral damages is a tricky issue. Indeed, not only is the amount often difficult to ascertain, but the entitlement to said damages is far from being automatic. For these reasons, we draw your attention today to the recent case of Ubaldini v. Rio Tinto Canada Management Inc. (2012 QCCS 4323), where the Superior Court held that an intentional error can lead to the award of moral damages.
In the case at hand, the widow of Arturo Ubaldini, namely Erika Ubaldini (Mrs. Ubaldini), made a claim against the deceased’s former employer Rio Tinto (formerly known as Alcan when the contract was formed) under the Alcan Pension and Life Insurance Plan to enforce her spousal benefits. 

Alcan had a practice of sending its retirees an annual personal benefit statement. From at least 2002 until 2008, that statement mistakenly indicated Erika Ubaldini as the beneficiary for both the survivor benefit under the pension plan and the death benefit under the life insurance policy.

After analysis, the Honorable Judge Thomas M. Davis grants in part the plaintiffs’ claim for moral damages despite the fact that she is not entitled to survivor benefits for the following reasons:
[44]  Dealing first with her right to the benefits accorded to a surviving spouse, Mrs. Ubaldini does not meet the definition of spouse under the Alcan Pension Plan, as she was not Mr. Ubaldini's spouse at the time of his retirement.
[45]  She argues that sections 89 and 89.1 of the Act apply to her situation. The application of these sections was considered by Madam Justice Masse in the matter of Sylvie Bernier v. Groupe Pages jaunes cie.[5] As in the present matter, the pension plan before the court provided that the surviving spouse benefit was payable to the spouse of the member at the time of his or her retirement. This right was not extinguished upon divorce. Notwithstanding the pension plan, Madam Justice Masse concluded that the Act was of public order and that sections 89 and 89.1 were applicable. 
[46]   For the purposes of this matter, the Court does not need to determine their applicability. Section 89 provides that the right of the spouse to a survivor benefit is extinguished upon divorce. In that eventuality, section 89.1 allows the member to obtain a revaluation of his or her pension benefits. The sections do not, however, stipulate that a new spouse replaces the divorced spouse as the beneficiary of the survivor benefit. Therefore, even if they are applicable they do not assist Mrs. Ubaldini. 
[47]  Considering now her position that Alcan, by recognizing her as the beneficiary of the spousal survivor benefit in the annual statements provided to Mr. Ubaldini beginning in 2002, had contracted with her late husband to provide the said benefit, the Court cannot accept this argument. 
[48]  The pension plan provided to Mr. Ubaldini by Alcan was part of his conditions of employment. Subject to any applicable legislation, the rights of Mr. Ubaldini, and a beneficiary, crystallized upon Mr. Ubaldini retirement. That contract provided for the payment of a pension to him for his life and the payment of the survivor benefit to his first wife. While Alcan's error, repeated successively in the annual statements of benefits provided to him beginning in 2002, is certainly unfortunate and did cause damages to Mrs. Ubaldini, it did not modify the contract. 
[49]  Alcan is correct when it submits that an error does not give rise to any contractual right, particularly where pension or insurance matters are concerned. 
Interestingly, despite the absence of any intentional error on the part of the defendant, Justice Davis invokes two recent decisions of the Quebec Court of Appeal to grant moral damages:
[54]   It is clear that Alcan's error was unintentional and that Alcan in no way meant to harm Mrs. Ubaldini. However, intent is not a prerequisite to moral damages being awarded. In the matter of Fisch v. St-Cyr, the Court of Appeal considered whether it was opportune to award moral damages to a woman whose health condition had been misdiagnosed. The court held that in awarding moral damages, it was appropriate for the trial judge to have considered the anxiousness, anger and psychological stress that the plaintiff had suffered as a result of the misdiagnosis.
[55]   In Compagnie d'Assurances Standard Life v. Tremblay, the Court of Appeal also recognized that moral damages could be awarded as a result of psychological stress suffered due to Standard Life's conduct.
The Superior Court ultimately comes to the following conclusion providing monetary compensation for the plaintiff:
[61]  CONDEMNS Defendant to pay to Plaintiff the sum of $10,000.00 in moral damages, plus interest and the additional indemnity since March 9, 2010;
The full text of the decision is available here:

Neutral reference: [2012] ABD 339

Other decisions cited in the present post:

1. Fisch v. St-Cyr, 2005 QCCA 688.
2. Compagnie d'Assurances Standard Life v. Tremblay, 2010 QCCA 993.

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