Honan v. Gerhold et al., [1975] 2 SCR 866

Supreme Court of Canada

Honan v. Gerhold et al., [1975] 2 S.C.R. 866

Date: 1974-10-01

Kathleen Lorrain Honan, an infant by her next friend Kenneth Honan, and the said Kenneth Honan (Plaintiffs) Appellants;

and

Raymond Gerhold and Nita Sinclair, executrix of the Last Will and Testament of Chester Doman, deceased (Defendants) Respondents;

and

London and Midland General Insurance Company Third Party.

1974: May 10; 1974: October 1.

Present: Martland, Judson, Spence, Dickson and Beetz JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Motor vehicles—Owner’s liability—Liability of registered owner—Determination of ownership at common law—The Highway Traffic Act, R.S.O. 1970, c. 202, s. 132.

Damages—Quantum—Review of award by appellate Court.

The appellant had sued for damages resulting from a collision involving a vehicle driven by her and one driven by the late Chester Doman. The trial judge found that the accident had occurred solely through the negligence of Doman and granted judgment against Doman’s executrix but dismissed the action against Gerhold the registered owner, at the time of the accident, of the vehicle driven by Doman. Doman had been the real and registered owner of the vehicle but, fearing execution of an alimony judgment, had secured registration in name of Gerhold by execution of a transfer and payment of sales tax on the transfer and registration costs. Doman retained sole control of the vehicle and continued to operate it, but Gerhold had secured its insurance coverage under his policy along with two other vehicles. The Court of Appeal affirmed the judgment at trial of $35,000 general damages, $5,244.75 special damages to the infant plaintiff and $12,643.42 to her father for

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expenses, and also the dismissal of the action against Gerhold.

Held: The appeal should be allowed.

The Court of Appeal erred in finding that Gerhold had no title whatever in the vehicle. Doman moved to protect the vehicle from seizure in execution of a judgment which he could only do by transferring the title in the vehicle. Doman intended to and did transfer the vehicle. Gerhold, for his part, notwithstanding retention of possession and control by Doman, manifested his ownership and control of the vehicle by insuring it on his existing policy, by applying for registration on several occasions and by disposing of the wreck and taking for himself the proceeds. Whether or not “Owner” in s. 105 (now s. 132) of The Highway Traffic Act, R.S.O. 1960, c. 172 (now R.S.O. 1970, c. 202.) should be interpreted to cover registered owner, Gerhold was the owner in the common law sense and therefore liable under s. 105 of the Act.

The Court of Appeal declined to amend the award of general damages on the basis that it was so inordinately low as to require amendment, however, in the circumstances, the award was inordinately low and a proper and conservative award for general damages would be $53,000, the special damages and damages to the father remaining as fixed at trial.

Haberl v. Richardson, [1951] O.R. 302; Hayduk et al. v. Pidoborozny, [1972] S.C.R. 879; Gorman v. Hertz, [1966] S.C.R. 13; Nance v. British Columbia Railway Company Limited, [1951] A.C. 601 referred to.

APPEAL from a judgment of the Court of Appeal for Ontario[1] dismissing an appeal from a judgment of Grant J. awarding damages as against the driver but dismissing the action as against the registered owner of a motor vehicle. Appeal allowed.

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E.A. Cherniak, Q.C., and R.R. Nicholson, for the appellants.

C.S. Ritchie and J.R. O’Donnell, for the respondent Gerhold.

W. Bell, Q.C., and T.W. Hainsworth, for the respondent Sinclair.

B. O’Brien, Q.C., and D.H. Proudfoot, for the third party.

The judgment of the Court was delivered by

SPENCE J.—This is an appeal from the judgment of the Court of Appeal for Ontario pronounced on December 1, 1972. By that judgment, the said Court dismissed an appeal without costs from the Judgment of Grant J. delivered on January 5, 1972.

The plaintiff, here appellant, had sued for damages for serious personal injuries sustained in an automobile collision between a vehicle driven by her and one driven by the late Chester Doman. The learned trial judge found that the accident occurred solely through the negligence of Doman and granted judgment against the executrix of the latter’s last Will and Testament, he having died from unrelated causes subsequent to the accident. The learned trial judge, however, dismissed the action against Raymond Gerhold who had been the registered owner of the motor vehicle driven, at the time of the accident, by the late Chester Doman. Damages were assessed at trial in the amount of $35,000 general damages and $5,244.75 special damages to the plaintiff, who at the time of the commencement of the action was an infant, and $12,643.42 to Kenneth Honan, her father, for accounts such as hospitalization, medical attention, and other out-of-pocket expenses.

The action against Raymond Gerhold was, of course, based on the provisions of s. 105 of The Highway Traffic Act as it stood at the time of the accident. That section now is s. 132 of the Revised Statutes of Ontario, 1970, c. 202. Subsection (1) reads as follows:

132. (1) The owner of a motor vehicle is liable for loss or damage sustained by any person by reason of

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negligence in the operation of the motor vehicle on a highway unless the motor vehicle was without the owner’s consent in the possession of some person other than the owner or his chauffeur, and the driver of a motor vehicle not being the owner is liable to the same extent as the owner.

Grant J. was of the opinion that the word “owner” in that subsection did not mean an owner registered under the provisions of The Highway Traffic Act but rather the real owner. He accepted the guidance of such decisions as Wynne v. Dalby[2], Comer v. Kowaluk[3], and Haberl v. Richardson[4], to determine that the person to whom the section referred in the word “owner” was the person who had the dominion and control over the automotive vehicle. The appellant here appealed from that judgment to the Court of Appeal for Ontario and Jessup J.A. gave reasons for the Court. At the commencement of his reasons, the learned justice on appeal said:

At the conclusion of the appeal the Court indicated it was not prepared to regard the assessment of general damages as a wholly erroneous estimate of the damages of the infant Plaintiff but reserved judgment on the issue of the liability of the Defendent Gerhold.

Jessup J.A. proceeded to consider the provisions of s. 105 and many other sections of The Highway Traffic Act as it then existed, and expressed a concurrence with the view of Grant J. that the sections did not require that the word “owner” in s. 105 (now s. 132) be interpreted as the registered owner. As to the proper test by which it might be determined who was the owner within the meaning of s. 105, the learned justice on appeal considered the decision of this Court in Hayduk et al. v. Pidoborozny et al.[5] That decision has been pronounced on May 1, 1972, i.e., after the decision of Grant J. and prior to the argument in the Court of Appeal. In

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concluding his reasons, Jessup J.A. said:

In my opinion Haberl v. Richardson (supra) cannot stand with Hayduk (supra) and that seems clearly to be the view of Laskin J. in his concurring judgment in Hayduk (supra). Accordingly, it is my view that a registered owner of a motor vehicle who has any title to it is vicariously liable under the Ontario statute for negligence in its operation notwithstanding that dominion and control is in another. In the present case, however, the defendant Gerhold had no title whatever in the vehicle registered in his name. I think judicial notice can be taken that the application for transfer form appearing in a motor vehicle permit issued in this Province does not contain any words of conveyance or assignment that would cause its completion to operate to convey to a transferee title in the vehicle to which the permit relates.

In my view, it will be sufficient for the disposition of this appeal if I were to consider the conclusion set out in that paragraph and particularly to investigate the question of whether Gerhold “had no title whatever in the vehicle registered in his name”. This consideration requires a rather careful review of the facts none of which are in dispute and which were all found by the learned trial judge.

The late Chester Doman had in 1965 purchased a Ford Galaxie automobile which he had first put in the name of a woman Geraldine Squires with whom he was then living. In November 1965, he caused the vehicle to be transferred to his own name, following an argument with Mrs. Squires. It would appear that the late Chester Doman’s legal wife had an alimony judgment against him and was threatening to take his assets by execution including this 1965 Ford Galaxie automobile. The learned trial judge stated that in 1965 Doman came to Gerhold and asked the latter if he would allow the vehicle to be registered in his name. I am of the opinion that there is an error in the recital of that date as produced at trial as Ex. 19 was a transfer vehicle permit for the year 1966 which

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indicates that the transfer from Doman to Gerhold took place in that year. The actual year is not important. What occurred was that Doman drove up to Gerhold’s residence, summoned him by tooting the horn, explained to him upon Gerhold coming out to the automobile that he feared his wife would take his car and he asked Gerhold to accept the registration of the car in his name. Doman executed the transfer portion of the automobile licence issued by the Department and paid to Gerhold the sales tax which would be assessed when the registration was made in Gerhold’s name and also the registration cost. Doman calculated the value of the vehicle to be $1,000. Gerhold then attended the local motor vehicle registration office, presented the transfer form completed and the cash for the sales tax and cost of transfer, and had issued to him the 1966 transfer vehicle permit now Ex. 19. Doman continued to operate the automobile and to have the sole control of it but Gerhold, even prior to the transfer having been registered in his name, had notified his insurance agents and the vehicle described by serial number was registered as being covered by an insurance policy which Gerhold had in the London and Midland General Insurance Company and which already covered two other vehicles. The following year, 1967, Doman applied for a new registration in Gerhold’s name and signed Gerhold’s name to the application form without any authority from Gerhold. Gerhold remonstrated and insisted that he should sign all such forms so that in the year 1968 and again 1969 Gerhold himself took the current year’s motor vehicle permit into the local registration office and he himself signed the application for the issuance of the annual renewal licence.

The situation continued in this way until the date of the accident.

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Doman was very seriously injured in the accident. The Ontario Provincial Police, in the course of the investigation, contacted Gerhold and he informed the police that Doman was driving the vehicle with his, Gerhold’s, consent as the owner. It was Gerhold who directed the removal of the vehicle to an automobile wrecker. Gerhold had two conversations, one personal and one a mere telephone conversation, with Doman following the accident as to what should be done with reference to the automobile. In the first of these, Gerhold testified Doman expressed the desire to have the vehicle repaired but he, Gerhold, was of the opinion that the costs of such repairs would exceed the value of the vehicle. In the second, Doman merely remarked “what should we do?” After Doman’s death, Gerhold sold the vehicle to a local firm of auto wreckers for $141. A cheque was issued in Gerhold’s name and delivered to him. He cashed the cheque and used the proceeds for his own purposes.

In the defence as originally entered, Gerhold continued to tell the same story as he had given to the police and it was only after his own solicitors, and not the solicitor for the third party who had charge of the litigation until then, discovered the facts which I have now recited that an amended defence was entered. Those, briefly stated, are the circumstances upon which Jessup J.A. made the finding that “in the present case, however, the defendant Gerhold has no title whatever in the vehicle registered in his name”.

With every respect for the learned justice on appeal, I am not so persuaded. What had moved Chester Doman was to protect the vehicle from seizure in execution of the judgment held by his wife. That end could not be accomplished unless he transferred the automobile. He, therefore, did transfer the automobile. The transfer gave Gerhold the legal title and it was intended to have that exact effect. The form of applica-

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tion for register of the transfer does, in my view, contain words which show that there has been a conveyance. Such a form appears in Ex. 19 and it should be noted that the form is signed both by the transferor and the transferee and it contains the words: “I hereby give notice of the change of ownership of the vehicle described hereon and make application for transfer of the permit”. Of course, under the circumstances, the late Chester Doman continued to have the exclusive possession of the automobile and have it under his dominion and control. That was part of the transaction. In fact exclusive dominion and control was present in both Haberl v. Richardson and Hayduk v. Pidoborozny. Despite this, however, Gerhold did manifest his ownership in several important actions. Firstly, he placed the vehicle under his insurance policy, and so certified to the insurance company that the vehicle was his. Secondly, he applied for the registration, in the first place in 1966 and again in 1968 and 1969, and he took great objection to Doman having done so in Gerhold’s name in the year 1967. Finally, and in my view most important, he disposed of the wrecked car and took the proceeds for his own use with evidently no intention of accounting to the estate of the late Chester Doman. This latter action could only be consistent with an assertion of his ownership of the vehicle.

I have therefore come to the conclusion that the appeal should succeed on the basis that whether the word “owner” in s. 105 (now s. 132) of The Highway Traffic Act should be interpreted to cover registered owner, Gerhold was the owner in a common law sense of the vehicle which was involved in this accident and therefore Gerhold is liable under the provisions of the said s. 105 of The Highway Traffic Act.

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In the result, the respondent Gerhold should be held jointly liable to the appellants together with the respondent Nita Sinclair.

I turn now to the appellants’ appeal as to the quantum of damages. As I have said, the learned trial judge awarded $35,000 in special damages and that amount the appellants did submit to the Court of Appeal for Ontario and do now submit to this Court is inordinately low. I have already cited the disposition made of the appeal as to quantum in the Court of Appeal for Ontario.

This Court in Gorman v. Hertz[6], adopted the well-known statement by Viscount Simon in Nance v. British Columbia Electric Railway Company Limited[7], at p. 613, that the appellate court in deciding whether it is justified in disturbing the finding of the court of first instance as to the quantum of damages must be guided by the principle that it is not justified in substituting a figure of its own for that awarded by the court below simply because it would have awarded a different figure if it had tried the case in the first instance and that before the appellate court can properly intervene it must be satisfied that either the judge in assessing the damages applied a wrong principle of law or, short of this, that the amount awarded is so inordinately low or so inordinately high that it must be a wholly erroneous estimate of the damage. That statement has been adopted in this Court in many cases before and in several cases after Gorman v. Hertz.

The learned trial judge examined the appellants’ claim for damages in meticulous detail. He carefully cited a list of the injuries which the plaintiff Kathleen Honan suffered in the accident as follows:

(a) a fracture of the left femur;

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(b) a compound fracture of the midshaft both of the right tibia and fibula;

(c) large cuts and bruises over both knees with fractures of both kneecaps

(d) a fracture of the pelvis;

(e) fractures involving the metatarsels of the right foot;

(f) about one-third of one of her back teeth was chipped off and four front upper and lower teeth had chips and sharp edges which were smoothed off with dental equipment;

(g) there was also multiple bruises to her head, body and limbs. She was under severe shock and lost a great quantity of blood.

The learned trial judge continued:

She was taken to Victoria Hospital under the care of Dr. William George Jamieson a specialist in surgery. The left femur was placed in balance traction and a long leg plaster of Paris cast applied to her fractured right tibia and fibula. The right kneecap was removed. The casts on the right leg were removed on June 24th and on June 27th the left leg was taken out of the traction sling and placed in a spica cast from her waist to feet where it remained until June 30th. Up until this time she had been immobile.

On July 17th she was removed by ambulance to her home in Toronto where she was confined to bed. On September 12th she was returned to Victoria Hospital where x-rays indicated her left leg was not yet healed. The wires were removed but the spica cast was continued on the right leg.

She remained in hospital until October 12th taking very extensive physiotherapy to restore muscles and bend her knees. September 29th was the first time she was out of bed. The cast remained on her right leg until October 12th.

When she left the hospital on this occasion she was able to get about on crutches. She returned home until December 3rd when she returned to hospital to have the cast removed from her right leg. On this occasion she remained in hospital until December 17th taking further physiotherapy. She made all attempts by way of exercise at home to restore the

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leg muscles and by the end of January was walking with the use of canes.

Early in that month, on the advice of her doctor she flew to Florida to enlist the help of sunshine and warm weather in her recovery. She returned with her parents by automobile on January 10th, 1970. She discarded the canes at the end of that month. She had been such a good student at Teachers’ College that she was granted her diploma and not required to return for further training.

About February 1st she started teaching one day a week and this was gradually increased until she was spending full time in such vocation by May. In September of that year she started teaching Grade V and has continued steadily at such work since then. The fracture of the pelvis which was only slightly displaced healed satisfactorily without special treatment. For some two months after the accident she had double vision but thereafter this presented no problem to her.

There is an obvious bow in her left femur extending out to the left as shown in Ex. 10. This can only be corrected by again breaking and resetting her leg. There is also a shortening in the left leg of between one-half to two-thirds of an inch. This is compensated to some extent by a lift which has been placed in her shoe. The right leg has healed well but some tenderness exists in the bone below the knee. She has some stiffness in the left hip. She walks with a noticeable limp and to some extent her gait has the appearance of a waddle.

If she remains in one position for any period of time, either sitting or standing, she will have aching discomfort in her legs. When she awakens in the morning she is stiff until she gets moving around. She had limitations of motion in both her knees although this is more pronounced in the left. She has aching discomfort around her knee joints and if she attempts to kneel she will have difficulty in doing so because of the sensitivity of her knees.

She has a very good range of back motion without any apparent discomfort. It is by bending at the back that she ordinarily moves to pick anything off the floor. When she attempts to do a hip and knee squat she can only get down about fifty per cent of this movement. She has full extension of the left knee but flexes the knee to approximately ten degrees beyond

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a right angle and the knee then seems to have almost a mechanical block.

There is crepitation on flexion and extension of the left knee. There is a hyperesthesia along the scar on the inferior portion of the left knee. This scar is about eight inches in length. She also has a scar where the traction was applied to the left tibia and a slightly smaller scar distal to this. She has a satisfactory range of ankle movement on the left side.

The right knee has the absence of the patella and again there is hypersensitivity associated with the surgical incision. This knee has full extension and flexes almost completely, lacking about fifteen degrees of full flexion. There was, however, some ligamentous instability in this knee both in the crucial ligaments and the collateral ligaments. She has tenderness on the small puncture wound at the junction of the lower and mid-third of the right tibia and this is quite pronounced. She has some discomfort on the dorsal aspect of her right foot.

The disability relative to her left knee is permanent and it is the opinion of Dr. Cameron that this will increase somewhat in its severity and she will have difficulty in climbing stairs. She has evidence of post-traumatic arthritis in her knee which the doctor feels will increase in severity in time. She has a permanent disability of the right knee in that she lacks full flexion and this will probably not improve. She has some parasthesia associated with both knees. This will persist and be a nuisance type of problem to her. She has tenderness at the fracture site in the right tibia. The scars on the base of each knee as shown in Ex. 9 are large, discoloured and very noticeable. These can be improved by plastic surgery. There is also a depressed scar on the front of the right tibia, together with two scars where the traction was applied to the left tibia. All these scars are very obvious and are a source of real concern to her.

She must have sustained very considerable pain during the course of her hospitalization and convalescence. She still takes medication to ease the pain. She is limited in her ability to engage in sports that she would normally enjoy. She is very conscious of her disability and disfigurement. She will be put to further medical and hospitalization expense if she has

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further operations to improve the appearance of the scars or the bowing of her leg.

After such an extremely detailed analysis of the appellant’s injuries, the treatment thereof, the results therefrom, the appellant’s then condition and her prognosis, the learned trial judge concluded most briefly:

I would fix her general damages at $35,000.00. Her loss of income, damages clothing and automobile total $5,244.75. Kenneth Honan, her father, incurred accounts for hospitalization, medical attention and other out-of-pocket expenses in the total sum of $12,643.42.

Jessup J.A., in giving reasons for judgment for the Court of Appeal, said:

At the conclusion of the appeal the Court indicated it was not prepared to regard the assessment of general damages as a wholly erroneous estimate of the damages of the infant Plaintiff but reserved judgment on the issue of the liability of the Defendant Gerhold.

Counsel for the appellant in this Court submitted a most persuasive argument that the award for general damages made by the learned trial judge was so inordinately low as to require amendment by the Court of Appeal and that it is the duty of this Court under the provisions of s. 47 of the Supreme Court Act to increase that award to an amount which the Court of Appeal should have awarded.

I think it must be noted that the learned trial judge in his reasons for judgment found that the respondent Gerhold was not liable to the plaintiffs for damages. Nita Sinclair as executrix of the Estate of Chester Doman was represented at trial, in the Court of Appeal, and in this Court but she neither testified herself nor called evidence. Her counsel has throughout taken the position that Gerhold should be found jointly liable. Some evidence at trial indicated that the late Chester Doman had obtained a reduction to nil of the payments to be made by him as directed in the judgment in his wife’s alimony

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action. The only liability insurance in reference to the vehicle would appear to be the policy in the name of Gerhold with the third party to which I have already made reference.

It also may be noted that the provisions of s. 22 of The Motor Vehicle Accident Claims Act, as amended by s. 2 of c. 73 of the Statutes of Ontario, 1968-69, provided that in respect of applications for payment out from the fund as to accidents occurring between the 1st of October 1962 and the 1st of September 1969, such payments be limited to the amount of $35,000. The accident giving rise to this action occurred on March 28, 1969.

The appellant is a young woman who, at the time of the accident, was under the age of twenty-one years and unmarried. She was attending school at the London Teachers College and was only two months away from graduation. The evidence shows that she was a most attractive young lady and active in sports, including bowling, curling and tennis. As a result of the accident, her damages are severe both as to function and as to the cosmetic effect. Those serious damages have been outlined in the reasons for judgment of the learned trial judge from which I have quoted extensively. The appellant has continued her career as a primary school teacher and that will entail a great deal of standing and also frequent changes of position from sitting to standing. The evidence shows that those actions will be accompanied by pain. Perhaps even more important is the fact, well established in the evidence, that this young woman will bear now for the rest of her life two badly scarred legs, and those scars will not appreciably improve, and that in addition to the surface being scarred the function of the legs is visibly altered so that she walks with a most awkward and ungainly gait. A teacher must appear constantly before

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her class of young pupils. These children are, I fear, rather unrestrained in their observation of and comment amongst themselves upon unusual appearances of their teachers, and one can easily understand the acute embarrassment of the appellant in having to move so awkwardly about her room in front of her pupils.

In addition, even in today’s atmosphere of independence, young ladies still put some value upon marital prospects, and the marital prospect of a young woman with badly scarred legs and awkward gait is most materially affected

When I consider these factors in addition to the pain and suffering of the appellant during her long period of recovery, she was a full year without being able to walk, I have come to the conclusion that $35,000 for general damages is inordinately low and I am of the opinion that a proper and conservative award for general damages would be the sum of $53,000.

I would, therefore, allow the appeal as against both respondents and award judgment in favour of the appellants as follows:

The appellant Kathleen Lorrain Honan—$58,244.75 and the appellant Kenneth Honan—$12,643.42 with interest from the date of judgment at trial. The appellants are entitled to their costs against both respondents throughout. I would make no order as to costs for or against the third party London and Midland General Insurance Company.

Appeal allowed with costs.

Solicitors for the appellants: Lerner & Associates, London.

Solicitors for the respondent, Raymond Gerhold: Siskind, Taggart & Company, London.

Solicitors for the respondent, Nita Sinclair: Poole, Bell & Porter, London.