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Rasha El-Tawil and Michael Polvere argued a successful appeal before the Court of Appeal for Ontario in Dickerson v. 1610396 Ontario Inc. and Radcliffe, 2013 ONCA 653 (MacFarland, Watt and Epstein, JJ.A.), regarding the application of the Bankruptcy and Insolvency Act on damages suffered for personal injuries after an intentional tort.The decision of the Court of Appeal in Dickerson v. 1610396 Ontario Inc. and Radcliffe, 2013 ONCA 653 (MacFarland, Watt and Epstein, JJ.A.) (a complete copy of which can be found here) is of particular importance for victims of a criminal assault who are fortunate enough to obtain a judgment against their perpetrator but are subsequently faced with the assailant attempting to use bankruptcy to evade payment.

Dickerson was assaulted by Radcliffe, who was found guilty of the crime of aggravated assault. In the civil action a jury of the Superior Court of Justice found Radcliffe liable for Dickerson's significant injuries and awarded Dickerson in excess of $1 million. Thereafter, Radcliffe filed a proposal in bankruptcy. Dickerson brought a motion seeking a declaration that the judgment survives bankruptcy and is not discharged.

The issue before the courts was the interpretation of s.178(1)(a.1) of the Bankruptcy and Insolvency Act, which states:

An order of discharge does not release the bankrupt from
(a.1)     any award of damages by a Court in civil proceedings in respect of

  1. bodily harm intentionally inflicted …

The motions judge erroneously found that unless there was the actual intent to inflict grievous bodily injury, the assault did not meet the threshold intention required of s.178: “bodily harm intentionally inflicted”. The motions judge insinuated into s.178 new elements of intent:

“… is there a concerted effort to inflict bodily harm in this case to import the abhorrent conduct that the legislation intended?

The questions and answers from the jury do not provide a judicial analytical framework to assess whether it was an 'intentional infliction of bodily harm.'…

Parliament could not have intended in legislating the exceptions in s. 178 to include the unfortunate and tragic consequences to mean that Mr. Radcliffe would have this lifelong penance for what was one punch.”

The Court of Appeal disagreed with the motions judge's decision, and, in our view, properly interpreted this provision and its application to the circumstances of this case.

The Court correctly held that the legislature did not require that the assailant would have to intend to inflict the severity of the injury for the debt to survive bankruptcy. Justice McFarland, on behalf of the Court of Appeal, states:

On the plain language of the statute, the appellant is only required to demonstrate “bodily harm intentionally inflicted” – nothing more.  In particular, he is not required to prove that the circumstances in which the bodily harm was intentionally inflicted were sufficiently offensive to social mores to justify withholding the protection of bankruptcy. The statute does not require the appellant to demonstrate “a concerted effort”, show particularly “abhorrent” conduct, or take account of sympathetic factors that might apply to the bankrupt. …

There is no doubt that the consequences of the events of April 19, 2005 are tragic. The respondent is left with a crushing debt, and the appellant is left with permanent brain damage.  Nevertheless, it is not for the court to weigh the relative blameworthiness of the respondent’s conduct in relation to the quantum of the debt he must bear.

The language of the statute is clear.  Where a civil damage award is in respect of bodily harm intentionally inflicted, the bankrupt is not released from such judgment by an order of discharge.

In our view, the Court of Appeal was correct, as there is no possible circumstance where a conviction of assault, and a claim arising therefrom, would not meet the requirements of s.178(1)(a.1).  The Court’s decision cements the purpose of this provision: to ensure that assailants cannot absolve themselves of liability by simply claiming bankruptcy and thereby avoiding paying their debt to their victim.

This is particularly important because, practically speaking, in cases of intentional torts, insurance coverage is typically not available. The collectability of a judgment is therefore of paramount importance to any Plaintiff suing an individual for an intentional assault.

The motions judge was apparently attempting to relieve Mr. Radcliffe of a heavy financial burden. In her view, the size of this judgment would have been a “lifelong penance for what was one punch”. However, as was subsequently made clear at the appellate court, neither the amount of the judgement nor the extent of the injury should have any bearing on whether the debt survives bankruptcy.

From a public policy perspective, to find that perpetrators of violent crimes could use bankruptcy to evade payment to their victims would be an abuse of the system. Let's remember why we have the bankruptcy system – to provide an unfortunate debtor with a fresh start. But avoiding payment of compensation to a victim of your assault by declaring bankruptcy is an abuse of the system and precisely why s.178 exists.

The Court of Appeal's decision is consistent with the intention of Parliament and the overriding social policy behind s. 178 – that a bankrupt should not be allowed to raise the shield of his or her general discharge against creditors who hold judgments predicated on socially unacceptable conduct.

The Court of Appeal said that “bodily harm intentionally inflicted” can be determined by inferring it from the facts of the case or by directly proving it. The Court made it clear that no perpetrator of criminal assault could expect to be exempt from this provision. The Court also clarified what doesn’t fall within the parameters of the s.178: defamation, negligence, and malicious prosecution, in addition to an intentional act that doesn’t intentionally cause injury.

However, despite clarifying that s.178(1)(a.1) applies to injury cases arising from assault, the Court of Appeal failed to define “bodily harm”. This could leave open the opportunity for defendants to argue that a type of harm does not equal “bodily harm” as referenced in the provision. For example, there may be an argument that psychological harm may be exempt as it is not clearly bodily harm. In our submissions to the Court, we submitted that the Criminal Code of Canada definition of “bodily harm”, being “any hurt or injury to a person that interferes with the health or comfort of the person and that is more than merely transient or trifling in nature,” may be instructive in this regard. However, the Court declined to comment on this issue in its Reasons.  

Overall, the Court of Appeal's decision in Dickerson v. Radcliffe is a well-reasoned decision which will be positive for personal injury Plaintiffs. Taking into account the proper interpretation of the provision, its purpose, and the intention of the legislature, it was the correct decision.

Rasha El-Tawil is an associate and member of Siskinds' Personal Injury Law group. If you or a loved one has been injured in a motor vehicle collision Rasha can be reached at rasha.el-tawil@siskinds.com or 519-660-7712 for a free consultation about your legal rights.

Mike Polvere is an associate of Siskinds working with our commercial litigation group.  If you have any questions or would like more information Mike can be reached by phone at 519-672-2121 or by email at michael.polvere@siskinds.com.

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