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1. Who are the parties to the appeal and what is each of their roles in the appeal (e.g.
Appellant, Respondent, Intervener, etc.)? What category of law does the case fall into and
how do you know that? (5 marks)
In Fernandes v. Penncorp Life Insurance Company, the parties to the appeal include the Plaintiff
Avelino Fernandes, who acts as the Respondent in the appeal court and the Defendant Penncorp
Life Insurance Company, who acts as the appellant in the appeal court. The appellant is the party
which starts the appeal from a courts decision whereas the Respondent is the party in which the
appeal is filed against. Ms. Mayo joins the side of the Defendant and was not already a party
existing to the law suit, therefore making her an Intervener. This category of law is civil. This
can be determined by the title stating two private parties (ie, Fernandes v. Penncorp Life
Insurance Company), and absence of Regina (ie. Government or Crown). This can also be
determined by the accusations and nature of the case. Seeing as the case regards a breach of
contract and an injury to a person, it can be determined that this case is civil. Lastly the use of
language in the case leads to the determination of this case being civil. The terminology
Plaintiff and Defendant are used and are different from those used in a criminal case where
the Defendant would be called the Accused.

2. What was the ruling of the court at the trial level and briefly explain the trial judges
decision? (3 marks)
The ruling of the case Fernandes v. Penncorp Life Insurance Company at the trial level awarded
Fernandes $236,773 for the period after December 22nd 2006 consisting of the premiums
Fernandes paid while disabled as contractual damages, as the judge concluded that Fernandes

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was totally disabled and Penncorp had breached the contract. Regarding mental distress
damages, the trial judge awarded Fernandes $100,000 stating [h]e was a proud, self-reliant man
who always worked to the fullest extent possible. He has suffered great mental distress. The
judge classified these as aggravated damages. No reasoning was given for the amount of
damages awarded. The punitive damages awarded to the Plaintiff was $200,000 on the grounds
that the actions of the Defendant and Ms. Mayo. He stated their actions were highhanded,
malicious, arbitrary or highly reprehensible misconduct. Medical records were taken into
account when the Trial Court judge made his decision regarding the punitive damages as well as
the video surveillance evidence, resulting in favour of the Plaintiff, totalling the damages to
$536,733.
3. What are the legal issues being determined by the Court of Appeal and briefly explain?
(4 marks)
Legal issues that were being determined by the Court of Appeal were the duty of good faith
regarding the punitive damages, saying the judge fail[ed] to appreciate that coverage for partial
disability was a component of the insurance policy and that Ms. Mayo did right by her handling
of the situation. Also, the appellant argued that the trial judge made errors in the analysis of the
damages, stating a lack of evidence supporting the Respondents disability. The issue regarding
the lack of good faith was not proven based on refusing a meritorious claim, seeing as a denial
of payment does not constitute an act of bad faith. In regards to the cease benefits, there was no
evidence Ms. Mayo took into account the heavy work required for the profession, thus
disregarding the evidence given on December 6th, furthermore Ms. Mayo terminated the benefits
before the date of December 6th. It was agreed that that the video evidence did not display the
Respondents ability to work as a brick layer nor the fact that he was completely disabled from

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working as a brick layer, as determined by the Trial Court. The same decision was held regarding
Ms. Mayos attempt to settle the claim as a partial disability, with the Court of Appeal in
agreeance on a lack of evidence to support against a full disability. The Court of Appeal declared
that the trial court was correct in that there were no errors with the decision made for all punitive
damages. In terms of the aggravated damages for mental distress, the Court of Appeal agreed that
mental distress occurred, but could not quantify the amount. The Court of Appeal referred to
cases Fidler and McQueen v. Echelon, concluding that the amount of $100,000 was unjustified
and rewarded the respondent the requested, and appropriate $25,000. The Court of Appeal
determined each party will pay their own appeal costs and reduce the indemnity cost by $30,000.
4. What is the Appeal Courts decision in this case and summarize the reasons for this
courts decision (the ratio)? Be specific. (5 marks)
The appeal court upheld the Trial courts decision stating that there were no errors with the
decision made regarding the outcome of the trial matter, but did not find the damages awarded
for aggravated damages for mental health appropriate or justified. The Court of Appeal sided
with the Trial Judge in that the punitive damages were all justified. The Court of Appeal agreed
that all evidence was examined appropriately and the decision made was fair. The Court of
Appeal agreed that mental distress occurred, but could not quantify the amount. The Court of
Appeal referred to cases Fidler and McQueen v. Echelon, which had damages of $25,000 and
$20,000. The decision was made to award a similar quantity of damages of $25,000, which could
be quantified. The Court of Appeal determined each party will pay their own appeal costs and
reduce the indemnity cost by $30,000.
5. What, if any, legal precedents are being followed in this appeal and how do you know

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that? If there are no precedents referred to, what guided the Court of Appeals decision
in this case? (3 marks)

The legal precedents used for the Fernandes v. Penncorp Life Insurance Company case are
referenced throughout the case file. The Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC
30 (CanLII), [2006] 2 S.C.R. 3 and McQueen v. Echelon General Insurance Co., 2011 ONCA
649 (CanLII), 107 O.R. (3d) 780 cases were referenced regarding the amount of damages
awarded for the aggravated damages for mental distress in the Court of Appeal. The cases
awarded the responded $20,000 and $25,000 respectively thus resulting in the Court of Appeal to
award Fernandes a reasonable $25,000. In regards to the damages regarding bad faith, both
Whiten v. Pilot Insurance Co., 2002 SCC 18 (CanLII), [2002] 1 S.C.R. 595 and Fidler v. Sun Life
Assurance Co. of Canada, 2006 SCC 30 (CanLII), [2006] 2 S.C.R. 3 were referenced. The
decision made was very much based on the precedents in the cases stated above, resulting in a
similar outcome. 702535 Ontario Inc. v. Lloyds of London, Non-Marine Underwriters (2000),
2000 CanLII 5684 (ON CA), 184 D.L.R. (4th) 687 was used to reference the obligation of
insurance companies duties of good faith. Barrick Gold Corporation v. Lopehandia and Nance v.
British Columbia Electric R. Co., were referenced to determine there was no legal justification
for the amount of damages awarded to the respondent for the aggravated damages. Lumsden v.
Manitoba, 2009 MBCA 18 (CanLII), 236 Man. R. (2d) 130 was also referenced stating that the
damages awarded in this case were unjustified at $45,000-$35,000, resulting in the reduction of
damages.

6. What precedent do you think the case sets for lower courts and why? (4 marks)

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This case is not binding to lower courts as it is not a part of the common or administrative law
system of appeals. Although other courts are not bound to this case, it acts as an influencer to
cases of moderate consistencies. No single civil case binds another court, but the more cases of a
similar nature, the greater the persuasive force they have on other civil cases. This case sets a
constructive precedent for other cases because of the large reduction of damages that occurred
regarding the aggravated damages for mental distress. The reduction of damages in this case will
set precedent for the Trial Courts to refer to. The Court of Appeal followed the decision of other
courts in regards to the amount, awarding amounts of similar value. These cases together will
now have a greater precedent on cases of similar nature.

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References

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Atkinson, P. (2013). The Canadian Justice System: An Overview (3rd ed.). Markham:
LexisNexis Canada
Fernandes v. Penncorp Life Insurance Company, 2014 ONCA 615 (CanLII). Retrieved
10November 2015,
http://www.canlii.org/en/on/onca/doc/2014/2014onca615/2014onca615.html
Fon, V., & Parisi, F. Judicial Precedents in Civil Law Systems: A Dynamic Analysis. SSRN
Electronic Journal, No. 04-15, No. 7-19. http://dx.doi.org/10.2139/ssrn.534504
Legal Information Institute,. (2015). Jurisprudence. Retrieved 10 November 2015, from
https://www.law.cornell.edu/wex/jurisprudence