



COURT OF APPEAL FOR ONTARIO

CITATION: 495793 Ontario Ltd. (Central Auto Parts) v.
    Barclay, 2016 ONCA 656

DATE: 20160902

DOCKET: C59053

Juriansz, Epstein and Pepall JJ.A.

BETWEEN

495793 Ontario Ltd. c.o.b. as Central Auto Parts
    and Ricardo P. Mercuri

Plaintiffs (Respondents)

and

Frank Barclay and City of Thunder Bay Police
    Services Board

Defendants (Appellants)

C. Kirk Boggs, Jasmine T. Akbarali, and David Litwin,
    for the appellants

Paul J. Pape, and Joanna L. Nairn, for the respondents

Heard: March 1, 2016

On appeal from the judgment of Regional Senior Justice Helen
    M. Pierce of the Superior Court of Justice, dated June 10, 2014, with reasons
    reported at 2014 ONSC 3517.

Juriansz J.A.:

[1]

This appeal is from a judgment finding the appellants, a police officer
    and the City of Thunder Bay Police Services Board, were negligent in investigating
    the individual and corporate respondents. The trial judge awarded substantial
    damages. For the reasons that follow, I would allow the appeal.

A.

BACKGROUND

[2]

Mr. Ricardo (Rick) Mercuri, along with his father and other family
    members, ran an auto recycling company, the respondent, 495793 Ontario Ltd
    c.o.b. as Central Auto Parts (Central), in Thunder Bay, Ontario. In 1997, the
    Thunder Bay Police Service began an investigation into stolen vehicles and auto
    parts in their community. On April 22, 1999, a search warrant was executed on Mr.
    Mercuris business premises. He was subsequently charged with eleven counts of
    possession of stolen property. Officer Frank Barclay was the lead investigator
    for the Thunder Bay Police Service. His team had the assistance of an officer
    from the Ontario Provincial Police (OPP) Provincial Auto Theft Team (PATT).

[3]

In November 2001, after a preliminary inquiry, Mr. Mercuri was committed
    for trial on all eleven counts. Six charges were withdrawn after the Crown was
    required to disclose information on the confidential vehicle identification
    number (CVIN) after an unsuccessful application under s. 37 of the
Canada
    Evidence Act,
R.S.C. 1985, c. C-5. An amended indictment of five charges
    was presented at trial, but the Crown withdrew two more charges. There were
    acquittals, after directed verdicts, on two of the remaining three charges that
    proceeded to trial before Wright J. of the Superior Court of Justice. On June
    8, 2005, Wright J. found Mr. Mercuri not guilty on the remaining charge,
    without calling on the defence for submissions.

[4]

In December 2005, Mr. Mercuri and Central sued Frank Barclay and the
    City of Thunder Bay Police Service in tort for negligent police investigation.

B.

THE TRIAL DECISION

[5]

On June 10, 2014, Pierce R.S.J., as she then was, issued judgment in
    favour of Mr. Mercuri and Central.

[6]

The trial judge found that the police did not meet the standard of care
    in four respects: (a) they failed to familiarize themselves with the auto
    recycling industry practice; (b) they failed to understand the purpose or the
    scope of the
Criminal Code
or the case law relevant to their
    investigation; (c) they failed to consider, document, investigate and disclose
    innocent explanations or indicia of innocence; and (d) they failed to secure
    and preserve the plaintiffs property.

[7]

For numerous reasons, the trial judge rejected the expert opinion
    evidence on the standard of care, which was provided by an auto theft
    investigation police expert. Though called by the respondents, he testified
    that the police had reasonable and probable grounds to arrest Mr. Mercuri for
    possession of stolen auto parts prior to the execution of the search warrant. The
    appellants did not call their own expert and relied on this testimony of the respondents
    expert.

[8]

The trial judge observed that the courts have ruled on the
    reasonableness of the conduct of the police for centuries. She said although
    that oversight is often exercised in the context of criminal law, expert
    evidence is not necessarily required to reach conclusions about whether an
    investigation was negligent. In her view, this was one such case. She found
    that the police conduct was egregious [i]n certain instances, such as the
    failure to document and investigate innocent explanations and the wanton
    destruction of the plaintiffs property without legal authority. Moreover, she
    concluded that the lead investigator had conceded that the investigation was
    deficient and had apologized to the individual respondent during the course of
    the trial for errors in the investigation.

[9]

The trial judge noted that there had been no real issue at trial that the
    defendants had a duty to secure and preserve the property they seized and that
    they failed to do so. The parties agreed there was a loss of $70,000 from the
    diminishment in value of vehicles and other auto parts the police had stored in
    an open police compound and exposed to the elements, and the destruction of
    airbags during a search for secondary identifiers inside them. The parties also
    agreed that Mr. Mercuri had paid $268,937.62 in legal fees to defend the
    criminal charges against him. The trial judge held that this amount should not
    be reduced to reflect the refusal of the criminal court to quash the search
    warrant.

[10]

The
    trial judge awarded non-pecuniary damages of $200,000 for the humiliation and
    worry suffered by Mr. Mercuri while the charges remained outstanding for six
    years. In awarding damages for loss of business income, the trial judge considered
    the evidence of the experts tendered by each party on the quantum of business
    loss to Central as a result of the prosecution of Mr. Mercuri. The experts did
    not differ, for the most part, as to how damages should be quantified, but
    disagreed as to the length of time that income loss was suffered. The trial
    judge rejected the appellants experts opinion that the economic losses should
    be limited to 18 months, and awarded damages of $1,042,179.00 for the period from
    May 1, 1999 to September 30, 2008.

C.

ISSUES

[11]

The
    main question for this court is whether the trial judge erred by determining
    the content of the standard of care without expert evidence in the particular
    circumstances of this case.

[12]

Second,
    the appellants allege that the trial judge, in formulating the content of the standard
    of care, erred by considering whether the police could prove Mr. Mercuri had
    knowledge that the auto parts were stolen rather than whether the officers had
    reasonable and probable grounds to believe that an offence had been committed.

[13]

Third,
    the appellants also allege the trial judge ignored or misapprehended relevant
    considerations, including the committal of Mr. Mercuri to trial, the
    legislation at issue, Mr. Mercuris admissions, the evidence regarding the
    altered vehicle identification numbers (VINs), and Mr. Mercuris possession
    of stolen property.

[14]

Finally,
    the appellants take issue with the assessment of non-pecuniary damages and
    damages for loss of profits.

[15]

The
    respondents submit that the trial judge did not make any legal errors and that her
    factual findings are supported by the evidence, are reasonable and are entitled
    to deference. The respondents submit that the appellants conceded at trial that
    the trial judge could determine the standard of care without expert evidence,
    and should not be allowed to resile from that position on appeal. This
    submission was not borne out on my reading of the transcripts. While the
    appellants did not call an expert and did concede that it was for the trial
    judge to decide whether the standard of care had been breached, they never
    conceded that expert evidence on the content of the standard of care was
    unnecessary.

[16]

Before
    addressing the issues raised by the appellants, it is necessary to briefly review
    the course of the police investigation of Mr. Mercuri.

D.

OVERVIEW OF THE INVESTIGATION

(1)

The Investigation Commenced in 1997

[17]

The
    Thunder Bay Police Service began an investigation into stolen auto parts in
    1997. Officer Frank Barclay, was an experienced officer. He had worked in the
    identification branch and the intelligence unit and had training in informant
    development. At the time of this investigation, he worked in major case
    management. Officer Barclays involvement in the investigation began in
    February 1997 when an officer referred an informant to him. A second informant
    was referred to him by a different police officer in May 1997. One of the two
    informants was a former employee of Central. Officer Barclay met with the first
    informant, who advised that vehicles stolen in Quebec were coming into Thunder
    Bay. The informant specifically identified Rick Mercuri of Central as a member
    of the group receiving stolen auto parts. The informant also identified a
    Quebec man, Gilles Joly, as a primary mover of the stolen property. Officer Barclay
    took steps to verify this information and, although Mr. Joly did not have a
    criminal record, there were prior notations about Mr. Joly in police reports
    concerning motor vehicles or motor vehicle parts.

[18]

The
    second informant told Officer Barclay that the informant and Mr. Joly had made
    a trip from Thunder Bay to Winnipeg to transfer a car. That vehicle later
    became a part of the police investigation. Officer Barclay received information
    from a police officer in another province that was consistent with that informants
    information.

(2)

The Nature of Auto Theft Investigations

[19]

I
    accept that auto theft investigations are complicated and technical.

[20]

Police
    officers must receive special training to conduct auto theft investigations,
    including learning how vehicles are marked with vehicle identification numbers,
    or VINs. Each vehicle has a VIN and each character of the VIN conveys
    information, such as the make and year of the vehicle and where it was built.
    Public VINs are found on dashboards, but labels on other parts, such as doors
    and glove boxes, also disclose the vehicle identification information. In
    addition, vehicles have confidential VINs, or CVINs, which are located in
    places not known to the public but disclosed by manufacturers to police
    officers under an agreement of confidentiality. Police are trained to look for
    inconsistencies between the VINs on different vehicle parts, and missing or
    altered VINs. VIN plates are often attached with rosette rivets, so police are
    also trained to look for VIN plates that have been glued on, indicating they
    may have been removed and reattached.

[21]

Since
    only one officer in Thunder Bay involved in the investigation had auto theft
    training, and additional staff was required, Officer Barclay requested
    assistance from the OPPs PATT. In February 1999, Officer George Kleinsteiber,
    an auto theft investigator with 18 years experience, was assigned to assist.
    In addition to his investigatory experience, Officer Kleinsteiber had created a
    province-wide course to train officers in auto theft investigation.

[22]

Another
    matter affecting auto theft investigations is that this court struck down a presumption
    in the
Criminal Code
relating to this offence as unconstitutional, in

Boyle and the Queen
(1983),

41 O.R. (2d) 713 (C.A.)
. The offence of possession
    of property obtained by crime is set out in s. 354 of the
Criminal Code
.
    Section 354(1) provides that everyone commits an offence who has in his
    possession any property or thing or any proceeds of any property or thing
    knowing that all or part of the property or thing or of the proceeds was
    obtained by or derived directly or indirectly from the commission of an
    indictable offence. Subsection (2) explicitly addresses wholly or partially
    removed or obliterated vehicle identification numbers and provides that:

[E]vidence that a person has in his possession a
    motor vehicle the vehicle identification number of which has been wholly or
    partially removed or obliterated or a part of a motor vehicle being a part
    bearing a vehicle identification number that has been wholly or partially
    removed or obliterated is, in the absence of any evidence to the contrary,
    proof that the motor vehicle or part, as the case may be, was obtained, and
    that such person had the motor vehicle or part, as the case may be, in his
    possession knowing that it was obtained,

(a) by the commission in Canada of an offence
    punishable by indictment; or

(b) by an act or omission anywhere that, if
    it had occurred in Canada, would have constituted an offence punishable by
    indictment.

[23]

Subsection 354(3) defines vehicle identification number as any
    number or other mark placed on a motor vehicle for the purpose of
    distinguishing the motor vehicle from other similar motor vehicles. Section 2
    of the
Criminal Code
defines motor vehicle as a vehicle that is
    drawn, propelled or driven by any means other than muscular power, but does not
    include railway equipment.

[24]

In
    1983, this court in

Boyle and the Queen

considered the presumption of guilty knowledge from
    possession of a vehicle with an altered or obliterated VIN
. The court declared the presumption of guilty knowledge in
    s. 312(2) (now s. 354(2)) constitutionally invalid but left intact the doctrine
    of recent possession in relation to possession of stolen goods as giving rise
    to an inference of guilty knowledge. Martin J.A., writing for the court,
    explained, at pp. 737-738
:

Since, as I have held, the presumption is valid that a motor
    vehicle, the vehicle identification number of which has been removed or obliterated,
    has been obtained by an indictable offence, that presumption together with
    other evidence that shows that the indictable offence by which the vehicle was
    obtained was "recently" committed, e.g., that the vehicle or part had
    been "recently" manufactured, may give rise to the doctrine of recent
    possession and the inference of guilty knowledge arising therefrom.
Guilty
    knowledge, apart altogether from any inference arising from possession of goods
    "recently stolen", may, of course, be proved by inferences from other
    circumstances, such as the giving of inconsistent accounts by the accused as to
    how he came by the property, the purchase of the property at an unreasonably
    low price, or the surreptitious manner in which the transaction by which the
    accused acquired the property took place, and an infinite variety of other
    circumstances. For example, the possession of several motor vehicles the
    vehicle identification numbers of which were obliterated might very well
    support an inference of guilty knowledge on the basis of the improbability of a
    person innocently acquiring a number of motor vehicles, the vehicle
    identification numbers of which had been obliterated
. [
Emphasis added
.]

[25]

As
    a result of
Boyle
, the Crown in Ontario prosecuting an accused for
    auto theft cannot rely on the presumption of guilty knowledge provided by s. 354(2).

[26]

Officer
    Barclay acknowledged at trial that he did not know of the courts decision in
Boyle
at the beginning of the investigation. However, he subsequently became aware
    that he could not rely upon s. 354(2)s presumption of guilty knowledge and
    that the investigation had to establish a suspects knowledge. He was certainly
    aware of this by the time of Officer Kleinsteibers involvement in February
    1999. Officer Barclay testified that he continued to be aware of that
    requirement as the investigation progressed and had always investigated with the
    need to prove knowledge in mind. Officer Kleinsteiber also testified that he
    spoke to the Thunder Bay Police about not relying on the presumption and the
    necessity of proving knowledge. Officer Fuhrman, one of the Thunder Bay Police officers
    involved in the investigation, had taken Officer Kleinsteibers two-week auto
    course. Officer Kleinsteiber testified that, during the course, a Crown had spoken
    at length about knowledge and the inability to rely on the presumption.

(3)

Review of Documentation and Examination of Vehicles

[27]

In
    addition to assessing the veracity of the information provided by the
    informants, the police began their investigation by researching vehicle and
    company registration information. Ownership history could be traced through
    registration files maintained by the Ministry of Transportation (MTO).
    Vehicles with a suspect history were found to have the common denominator of
    going through several Thunder Bay businesses, including Central. The police
    researched all vehicles registered under the registrant identification number
    of the business to identify suspect vehicles, and then conducted physical
    vehicle inspections.

[28]

The
    police also conducted surveillance on Mr. Joly when he came to Thunder Bay. They
    observed Mr. Joly attending at Central. The police ran the plate of his vehicle
    and found that it was registered to a numbered company they had identified as
    being of interest in their investigation. The police obtained the VIN from Mr.
    Jolys vehicle and found it was connected to an Ontario company at an address
    in Toronto. Officer Barclay was told by a Toronto auto theft investigator that
    they had an ongoing investigation into that address.

[29]

This
    early investigation led police to believe that Mr. Mercuri and Central were
    associated with a number of vehicles whose identity had been disguised. The
    police identified vehicles that had been sold as salvage by insurance companies
    and registered to Central. They found that Central had purchased parts that
    appeared to be from stolen vehicles because the VIN plates and labels had been
    removed. The labels and VINs from the salvage vehicles were affixed to the
    suspected stolen parts. The police identified at least three such vehicles. These
    vehicles had their public VIN numbers glued, rather than riveted, in place.

[30]

Police
    asked Mr. Mercuri to provide invoices to verify the origin of some of the
    suspected stolen parts. Some of the invoices were linked to companies that the
    police determined were non-existent or had phony addresses. For instance, a
    police officer examined a vehicle that Central had asked to be re-vinned. The
    cab, engine and transmission were identified as being from a vehicle that was
    stolen December 17, 1997. An invoice from December 20, 1997 for parts from
    Automobile Procarte to Central and a cancelled cheque were forwarded by Officer
    Barclay to the Sureté du Québec. An officer attended at the address on the
    invoice, found it to be a vacant lot, and advised that the address on the
    invoice represented a fictitious company. The officer spoke to a proprietor of
    the business next door, which had been there for a number of years, and was advised
    that there had never been an auto parts dealer at that location. The phone
    number on the invoice could only be linked to a pager. The police believed that
    invoice was fake since it was from a non-existent company. The police obtained
    a warrant for Centrals phone records and compared the numbers with other
    investigators. They found that some numbers were linked to individuals they
    believed were involved with the movement of stolen vehicles and parts.

[31]

The
    police also learned that a number of truck cabs that Mr. Mercuri had obtained
    from another Quebec company, which were shipped to Winnipeg, were seized there and
    determined to be stolen. The police only learned later that on learning that
    the cabs were stolen, Central had reimbursed the Manitoba recycler for its
    costs and legal fees and had brought a civil action against the Quebec company.
    In his police interview, Mr. Mercuri had made some vague reference to a civil
    action. The police misunderstood his acknowledgement of these transactions to
    be an admission that he was knowingly dealing in stolen auto parts.

[32]

In
    1998 there were some changes in the auto industry. The MTO introduced a
    branding program for rebuilt vehicles which altered the process for re-vinning
    vehicles. The program was not mandatory until 2003. In 1999, Officer Barclay
    spoke to an MTO enforcement officer who advised that he was uncertain about the
    requirements for VINs being switched himself.

(4)

A Search Warrant of Centrals Business Premises is Authorized

[33]

Officer
    Barclay met with a Crown attorney on April 17, 1999, to advise him of the
    investigation. The Crown had no objection to proceeding with an information to
    obtain a search warrant and provided input into the possible charges. Officer Barclay
    testified that he believed there were grounds to obtain the warrant at that
    time and that he still maintained that belief at trial.

[34]

The
    police obtained judicial authorization for a search of the Central premises,
    and the search was executed on April 22, 1999.

(5)

Mr. Mercuris Voluntary Interview and the Search of Central

[35]

Mr.
    Mercuri voluntarily attended at the police station for an interview just after he
    had been served with the search warrant and the search at the Central premises
    had commenced. At the outset of the interview, Staff Sergeant Hobbs cautioned
    him that, although he was not charged presently, he could be charged with
    possession of stolen property exceeding $5,000 contrary to ss. 354 and 355 of
    the
Criminal Code
.

[36]

During
    the interview, Mr. Mercuri made several apparent admissions, which the trial
    judge found to be understandable miscommunication. Here is an example of the miscommunication:

Hobbs:         Lets cut the crap here
    you know that some of this is stolen property okay

Mercuri:       Definitely

Hobbs:         You do know that some of this is

Mercuri:       Well now I know yeah

Hobbs:         Okay

Mercuri:       I knew before

[37]

Towards
    the end of the interview, they continued:

Hobbs:         Um now would you be
    willing to to [sic] come back with us to Central

Mercuri:       Yeah

Hobbs:         Um and point out all
    the stolen property now listen to me okay

Mercuri:       Yeah

Hobbs:         I want this to be very
    clear to you okay

Mercuri:       Yep

Hobbs:         The minute you do that

Mercuri:       Yep

Hobbs:         Youre probably going
    to be charged with possession of stolen property okay

Mercuri:       Yep

[38]

After
    cautioning Mr. Mercuri again of the potential jeopardy:

Hobbs:         Okay would you be
    prepared to come back with us right now

Mercuri:       Yeah

Hobbs:         And point out the
    stolen property thats on your property

Mercuri:       Yeah I can that Im
    aware of

Hobbs:         Oh well find other
    stuff okay

Mercuri:       Yeah

[]

Hobbs:         So what Im saying to
    you is the stuff that you obviously know is stolen okay Id like you to point
    out stuff that youre iffy about hey thats fine everybody you know I mean you
    cant know possibly known every single piece of inventory that you have right

Mercuri:       Yeah yeah

Hobbs:         Would you be prepared
    to do that

Mercuri:       Yeah

[39]

Mr.
    Mercuri also talked about having received stolen cabs from a Quebec company. As
    mentioned above, he only made a vague reference to his civil action against the
    Quebec company and did not mention he refunded his customers money.

[40]

Following
    the interview, Mr. Mercuri returned to the Central premises and walked around
    with various officers. He identified a number of items which later formed the
    basis of some of the charges, including: pointing out a Sea-Doo that had its
    VIN removed and engine number removed, an Evinrude Motor with a partially
    obliterated serial number tag, and a stolen Ford Econoline van from New York. Mr.
    Mercuri also assisted the police in identifying doors and glove boxes missing
    their labels and cabs without VIN plates.

[41]

Subsequent
    to the search, an employee of Central attended at the police station for an
    interview. He advised that he had removed VIN plates from salvaged truck cabs
    and glued them to cabs that had no VIN plates at Mr. Mercuris direction. Mr.
    Mercuri had also acknowledged this practice during his own interview. After
    charges were laid, Mr. Mercuri declined to speak any further with the police.

(6)

Relevant and Related Judicial Proceedings

(i)

Committal to Trial on All Charges After Preliminary Inquiry

[42]

After
    a multiple day preliminary inquiry in the fall of 2000 and into 2001 before
    Walneck J. of the Ontario Court of Justice, Mr. Mercuri was committed to trial
    on eleven counts of possession of stolen property.

(ii)

Application to Quash the Search Warrant

[43]

Mr.
    Mercuri challenged the search warrant under s. 8 of the
Charter of Rights
    and Freedoms
at his criminal trial. The challenge focused primarily on the
    alleged deficiencies in the information to obtain, including the failure to
    provide the authorizing Justice of the Peace with material facts such as the trade
    practice in the local auto recycling trade, and the allegedly unreasonable
    manner of search, including the testing and destruction of airbags. After an eleven-day
    hearing, Wright J. dismissed the motion. He concluded that, even excising all
    of the facts shown to be incorrect or unfair in the information to obtain,
    there was still sufficient reliable information to support the authorization:
R.
    v. Mercuri
, 2004 CanLII 7053, [2004] O.J. No. 3415 (S.C.)

(iii)

Crown Application under s. 37 of the
Canada Evidence Act

[44]

After
    the application to exclude the search warrant evidence was dismissed, the
    defence demanded disclosure of the secret locations of CVIN numbers. The Crown
    brought an application for non-disclosure before Wright J., pursuant to s. 37
    of the
Canada Evidence Act
, which allows the Crown to object to the
    disclosure of information on the basis of a specified public interest. The
    application was unsuccessful and the Crown was ordered to disclose the location
    of the CVINs. Rather than making the ordered disclosure, the Crown withdrew six
    charges and presented an amended indictment of the remaining five counts. After
    argument on the new indictment, the Crown withdrew two more charges, and the
    trial continued.

E.

ANALYSIS

[45]

For
    the reasons that follow, I conclude that the trial judge erred by deciding the
    content of the standard of care without expert evidence. There are two
    exceptions to the general rule that expert evidence is required. Neither
    exception applies here. Without such evidence, there was no basis for
    determining the appropriate content of the standard of care of a reasonable
    Thunder Bay police officer conducting a specialized investigation into stolen
    auto parts, and consequently no basis upon which the trial judge could find
    that the standard had been breached.

[46]

Moreover,
    as she proceeded, the trial judge committed the additional errors discussed
    below. With the exception of the parties agreement as to damages for loss of
    and damage to seized property, the trial judge should have dismissed the respondents
    action.

(1)

The Lack of Expert Evidence on Standard of Care

(a)

The Standard of Care

[47]

The
    appropriate standard of care for the tort of negligent investigation was
    established by the Supreme Court of Canada in
Hill v. Hamilton-Wentworth
    Regional Police Services Board
, 2007 SCC 41, [2007] 3 S.C.R. 129. The flexible
    overarching standard is that of a reasonable police officer in similar
    circumstances:
Hill
, at para. 68. As explained by the Chief Justice, at
    para. 73:

The standard is not perfection, or even the optimum, judged
    from the vantage of hindsight. It is that of a reasonable officer, judged
    in the circumstances prevailing at the time the decision was made 
    circumstances that may include urgency and deficiencies of information.

[48]

The
    conduct of a reasonable police officer may vary depending on the stage of the
    investigation and the legal considerations. In laying charges, the standard is
    informed by the legal requirement of reasonable and probable grounds to believe
    the suspect is guilty:
Hill,
at para. 55.

[49]

The
    Supreme Court of Canada in
R. v. Storrey
, [1990]
    1 S.C.R. 241, at pp. 250-251, defined the concept of reasonable and probable grounds
    as requiring an arresting officer to subjectively have reasonable and probable
    grounds on which to base the arrest. It must also be justifiable from an
    objective point of view but need not demonstrate anything more. See also:
R.
    v. Feeney,
[1997] 2 S.C.R. 13, at para. 24. In other words, a reasonable
    person placed in the position of the officer must be able to conclude that
    there were indeed reasonable and probable grounds to make an arrest:
R. v.
    Storrey,
at p. 251.

[50]

The
    police are not required to establish a
prima facie
case for conviction
    before making an arrest:
R. v. Storrey,
at p. 251;
Wong v. Toronto
    Police Services Board
, 2009 CanLII 66385, 2009 CarswellOnt 7412 (S.C.), at
    para. 54;
Gioris v. Toronto Police Services Board
, 2012 ONSC 6396,
    2012 CarswellOnt 15071, at paras. 68-70. As explained by Thorburn J. in
Wong
,
    at para. 61:

The determination as to whether reasonable grounds exist is
    based upon an analysis of the circumstances apparent to the officer at the time
    of the arrest and not based upon what the officer or anyone else learned later.
    Reasonable grounds still exist where the information relied upon changes at a
    future date or otherwise turns out to be inaccurate. The requirement is that
    the information be reliable at the time the decision was made to arrest the
    accused.


[51]

The
    function of police is to investigate incidents which might be criminal, make a conscientious
    and informed decision as to whether charges should be laid and present the full
    facts to the prosecutor:
Wong,
at para. 56. Although this requires, to
    some extent, the weighing of evidence in the course of investigation, police
    are not required to evaluate the evidence to a legal standard or make legal
    judgments. That is the task of prosecutors, defence lawyers and judges:
Hill,
at para. 50.

[52]

Nor
    is a police officer required to exhaust all possible routes of investigation or
    inquiry, interview all potential witnesses prior to arrest, or to obtain the
    suspects version of events or otherwise establish there is no valid defence
    before being able to form reasonable and probable grounds:
Kellman v.
    Iverson
,

2012 ONSC 3244
(CanLII)
,
[2012] O.J. No. 2529
,
at para. 16;
Wong
, at para. 59.

(b)

The General Rule is that Expert Evidence is required

[53]

The
    general rule is that the content of the standard of care of a professional, such
    as a police officer, will require expert evidence:
Meady v. Greyhound
    Canada Transportation Corp
., 2015 ONCA 6, 329 O.A.C. 173, at paras. 34-35;
Krawchuk v. Scherbak
, 2011 ONCA 352, 106 O.R. (3d) 598, at para. 130,
    leave to appeal to S.C.C. refused, [2011] S.C.C.A. No. 319;
Bergen v.
    Guliker
, 2015 BCCA 283, 75 B.C.L.R. (5th) 351, at paras. 114-131;
Camaso
    Estate v. Saanich (District)
, 2013 BCCA 6, at paras. 71-72, leave to
    appeal to S.C.C. refused, [2013] S.C.C.A. No. 92.

[54]

As
    Smith J.A. explained on behalf of the Court of Appeal for British Colombia in
Bergen
    v. Guliker,
at para. 131:

While there are cases in which the breach of the standard of
    care will be apparent without expert evidence, typically when a suit is brought
    for professional negligence it is customary (and generally necessary), for
    there to be expert evidence on the standard of care. As the analysis in
Hill
makes clear, police officers are professionals and their conduct
    should be assessed in the same way that other professional negligence claims
    are evaluated. [Citations omitted.]

[55]

Strathy
    C.J.O. in
Meady
explained that that general rule is
subject to the exception for nontechnical matters or
    those of which an ordinary person may be expected to have knowledge
. See also
Krawchuk
, at para. 133.

[56]

Whether
    expert evidence as to the standard of care of a police officer is required
    turns on the nature of the issues and the facts of each case, with particular
    regard to the specialized or technical nature of the circumstances, and whether
    a trier of fact can rely on its own knowledge and experience to determine the
    appropriate standard of care and whether it is met.

[57]

Epstein
    J.A., on behalf of this court in
Krawchuk
, identified two exceptions
    to the general rule that it is not possible to determine professional
    negligence without the benefit of expert evidence. The first, as mentioned
    above, is in nontechnical matters within the knowledge and experience of the
    ordinary person. The second is where the impugned actions are so egregious that
    it is obvious that the defendants conduct has fallen short of the standard of
    care without even knowing precisely the parameters of the standard of care.
    Epstein J.A. explained, at para. 135, that this second exception involves
    circumstances where negligence can be determined without first identifying the
    parameters of the standard of care rather than identifying a standard of care
    without the assistance of expert evidence.

[58]

Several
    appellate cases have considered the application of the general rule and its
    exceptions.

[59]

In
Meady,
this court deferred to the trial judges decision that he did
    not require expert evidence to determine the professional standard of care and
    dismissed the appeal.
Meady
was an action in negligence against two
    OPP officers and their employer by a number of passengers and the driver of a
    Greyhound bus. The bus crashed after a man, with whom the police had contact
    before boarding, grabbed the steering wheel. The trial judge held that the
    proposed police expert was not properly qualified and that, in any event, expert
    police evidence was unnecessary. The issue of appropriate police training,
    policies, investigation techniques and interaction with the public fell within
    the understanding of the trier of fact. The only live issue was whether crisis
    management should have been employed, and the training document to which the
    proposed expert referred was before the trial judge. The Chief Justice observed,
    at para. 47, that [t]he exercise of police powers of investigation, arrest and
    detention and police interactions with the public falling short of coercion,
    are part of the daily diet of judges of the Superior Court. Expert evidence
    was not required to understand or apply the standards set out in those
    materials or to assess whether the officers had properly applied their
    training.

[60]

The
    Court of Appeal for British Columbia in
Bergen
allowed an appeal by
    the province from a judgment finding it 20% liable for a collision following a
    police pursuit. The court found that the determination of whether the standard
    of care was breached, following commencement of the police pursuit in question,
    required expert evidence on how a reasonable police officer would have gone
    about apprehending a mentally unstable and suicidal individual in the
    circumstances without causing harm to others. The court held that the proffered
    expert evidence was properly ruled inadmissible by the trial judge, but as a
    result, there was no basis for determining the appropriate standard of care and
    no basis upon which the judge could make key findings of fact related to
    whether a breach of the standard of care occurred. The court concluded that the
    trial judge had erred. In the absence of expert evidence, the judge could not
    have determined the content of the standard of care and could not adjudicate
    the claim.

[61]

In
Camaso Estate
, the trial judge had found that expert evidence was
    required in a police negligence case in which the officer fatally shot the
    respondents husband. The Court of Appeal for British Columbia allowed the
    appeal because the trial judge did not refer to the expert evidence but rather
    imposed his own standard of care without any evidentiary basis.

[62]

In
Roy v. British Columbia (Attorney General)
,

2005 BCCA 88, 251 D.L.R. (4th) 233,
leave to appeal to S.C.C. refused, [2005] S.C.C.A. 188, the
    death of an individual from extreme intoxication while in custody was at issue.
    On appeal, the majority of the court concluded that the trial judge erred by
    finding that the officers did not perform any adequate assessment or
    investigation into Mr. Roys state of consciousness or consider whether his
    significantly reduced level of awareness might require medical examination, in
    the absence of evidence of what a competent police officer would do in the
    circumstances. The issue related to matters beyond common experience and it was
    not a matter of a non-technical nature or of which an ordinary person may be
    expected to have knowledge and as such, expert evidence on the standard of
    care was necessary.

[63]

In
    those police negligence cases in which the judge has proceeded without expert
    evidence, the case has been straight forward in nature: see
Russell v. York
    Police Services Board
, 2011 ONSC 4619;
Lawrence v. Peel Regional
    Police Force
, 2009 CanLII 19934 (ON SC);
Wong.

[64]

In
    this case the trial judge erred in departing from the general rule. She made no
    specific reference to the general rule, but her reasons suggest she considered
    she could rely on both exceptions. In my view, neither exception applied, as I
    explain below.

(a)

This was a technical, complicated investigation

[65]

This
    was a technical, complicated investigation, and the reasons the trial judge
    gave for considering the police conduct to be clearly egregious are flawed.

[66]

The
    trial judge took the position she could determine the content of the standard
    of care, saying, at para. 46:

For centuries the courts have ruled on the reasonableness of
    the conduct of the police. Some examples of negligence are detailed in the
    jurisprudence concerning negligent police investigation. While the court's
    oversight is often exercised in the context of criminal law, I am of the view
    that the court may not necessarily need expert evidence to reach conclusions
    about whether an investigation was negligent. In my view, this is such a case.

[67]

I
    do not read the trial judges reasons to suggest that the case was one
    involving nontechnical matters or within the knowledge and experience of the
    ordinary person. In fact, the trial judge rejected the testimony of Mr. Jeffrey
    Davis, a consultant and experienced former police officer (with the Commercial
    Auto Crime Bureau of the Peel Regional Police from 1994 until his retirement in
    2010) whom she had qualified as an expert in auto theft investigations, partly
    because he 
made no comment on police conduct as it
    related to industry practice and

nothing in
    his background suggests that he is familiar with the auto recycling industry.

[68]

The
    trial judge listed the failure of the police to familiarize themselves with
    auto recycling practices as a significant reason for her conclusion that the
    police did not meet the standard of care. This was a failing she also found of
    Mr. Davis whom she qualified to give expert evidence on auto theft
    investigation issues and whom she said 
was clearly
    knowledgeable about auto theft policing
.

[69]

Though
    called by the respondents, Mr. Davis testified that the police already had
    evidence of possession of stolen property prior to the search warrant. He said
    he would have arrested Mr. Mercuri and would not have waited until afterwards. The
    appellants did not call expert evidence. They took the position Mr. Davis
    opinion established the standard of care.

[70]

The
    trial judge did not accept the opinion of Mr. Davis. She explained, at paras.
    40-45 of her reasons, why the evidence of Mr. Davis was, in her view, of
    limited use. It is not necessary to review her reasons for rejecting Mr. Davis
    testimony here. This court must defer to her weighing of his testimony.

[71]

However,
    having rejected the available expert evidence, the question is whether the
    trial judge erred by departing from the general rule and deciding the case
    without any expert opinion as to the applicable standard of care in the
    particular circumstances.

[72]

The
    case was replete with technical aspects of both legal and factual issues, such
    as what is a VIN; what parts of a vehicle constitute a motor vehicle under
    the
Code
; what parts contain a VIN; and the legitimate reasons in the
    auto recycling industry for transferring a VIN. The evidence disclosed a
    fundamental difference of opinion between automotive recyclers and the police
    about these matters. As well, the MTO introduced and implemented a branding
    program for rebuilt vehicles between 1998 and 2003. The trial judge noted, at
    para. 154, that the police and the Ministry of Transportation were at odds
    about the process for re-vinning vehicles and that there was certainly
    confusion about what steps to take

[73]

In
    proceeding to determine the case, the trial judge placed a great deal of weight
    on the polices lack of understanding of what she found to be standard
    practices in the auto recycling industry. The standard practices in the local
    auto recycling industry, as described by several witnesses at the civil trial,
    may have established that individuals in the local industry could offer
    innocent explanations for the removal or reattachment of VIN and certificate
    information, but was not sufficient to conclude that the police investigators
    were negligent. All this evidence had been called before Wright J. who noted in
    his ruling on the search warrant, at para. 58: Much evidence and argument was
    put forward that this practice is a normal one in the trade. Perhaps it is. But
    the practice is one equally followed by those who are attempting to disguise
    stolen property. I agree with Wright J.s observation. The local practice that
    the trial judge found provided an innocent explanation for removal and
    reattachment of VINs could also be used by an auto recycler to camouflage
    dealing in stolen vehicles and parts. The trial judge failed to consider this.

[74]

The
    trial judge made factual findings in relation to the police misunderstanding of
    auto recycling practices, and the investigators failure to recognize evidence
    to the contrary in terms of: (i) the use of original VINs and the practice of
    removing them, (ii) the ability to determine if a truck cab was sanitized
    absent knowledge of CVINs, (iii) the use of rosette rivets and glue; and (iv)
    the re-use of certification labels on doors and glove box labels. However, much
    of her analysis involved hindsight and the re-analysis of the issues which led
    to charges being withdrawn or to the acquittal.

[75]

It
    is my view that the trial judge so erred. This case involved a technical police
    investigation that did not fall within the standard knowledge and experience of
    a Superior Court judge. I do not accept the respondents submission that by not
    calling their own expert on the standard of care the appellants consented to
    the trial judges proceeding without expert evidence.

(b)

This was not an egregious case

[76]

The
    trial judge offered three reasons why she considered the police conduct in this
    case to be egregious. She said, at para. 46:

In certain instances, police conduct was egregious: for
    example, the failure to document and investigate innocent explanations and the
    wanton destruction of the plaintiffs' property without legal authority.
    Repeatedly, the lead investigator, Officer Barclay, conceded that the
    investigation was deficient. He even apologized to Mr. Mercuri during the
    course of the trial for errors in the investigation.

[77]

I
    discuss each of these in reverse order.

(i)

Officer Barclays Apologies

[78]

First,
    as a general observation, the acknowledgement of omissions and mistakes in
    hindsight does not establish the standard of care was breached in the context
    of the information known at the time. Second, Officer Barclays apologies must
    be understood in context. Officer Barclay, while acknowledging some mistakes,
    maintained steadfastly throughout his testimony that he had reasonable and
    probable grounds to lay charges based on the evidence known at the time. In
    fact, at trial he still believed the evidence demonstrated both knowledge and
    possession of stolen auto parts on the part of Mr. Mercuri. The trial judge
    noted his testimony in this regard at para. 160 of her reasons. However, while
    Officer Barclay acknowledged various deficiencies in the investigation, neither
    Officer Barclay nor the Thunder Bay Police Services Board conceded that the
    investigation had been negligent.

[79]

For
    instance, Officer Barclay did apologize at the application to quash the search
    warrant and at the negligence trial in relation to having incorrectly put in
    the wrong, lower amount in relation to a key invoice (the actual invoice
    however being appended to the ITO). The concern was that the lower amount could
    have given the authorizing judge an inaccurate view of the value of the
    vehicle, an under-market value price more strongly supporting the inference
    that the vehicle was stolen. Despite Officer Barclays acknowledgment of this error,
    the search warrant was found, despite this and other problems, to be
    sufficiently reliable to support an authorization:
R. v. Mercuri.

[80]

Officers
    Barclays narrow and limited apologies provide insufficient support for the
    trial judges conclusion the police conduct in this case was egregious.

(ii)

The Wanton Destruction of the Respondents Property

[81]

As
    has been noted above, there was no issue at trial that the police had failed to
    properly secure and preserve the respondents property after it was seized. The
    trial judges reference to wanton destruction of property refers to the police
    having blown up airbags in an attempt to retrieve numbers from them, and to
    storing other auto parts outdoors with the result that they rusted and lost
    value over time. More importantly, it was not an issue that addressed the
    question of whether the police had reasonable and probable grounds to arrest
    and charge Mr. Mercuri. At most, it was some circumstantial post-charge
    evidence in terms of the overall conscientiousness demonstrated by the police.

(iii)

The Police failed to Consider, Document, Investigate and Disclose Innocent
    Explanations or Indicia of Innocence

[82]

It
    is useful to remember that the exception for egregious conduct applies when the
    police conduct is so egregious that it is obvious that the defendants conduct
    has fallen short of the standard of care without even knowing precisely the
    parameters of the standard of care. Dictionary definitions of egregious
    include synonyms such as shocking, appalling, terrible, awful, horrendous,
    frightful, atrocious, abominable, abhorrent, and outrageous.

[83]

The
    trial judge had no evidence of the note taking, and disclosure practices
    expected of a police service in 1999. She had no proper framework to conclude
    the failures in this case were egregious.

[84]

Moreover,
    the trial judges criticism of the police for failing to follow-up on, or take
    steps to become aware of, possible innocent explanations ignores the
    established jurisprudence that police are not required to exhaust all avenues
    of investigation, establish that an accused has no defence, or even obtain an
    accuseds version of events:
Wong,
at paras. 57, 59, 68;
Roda,
at
    para. 73;
Lawrence,
at para. 48;
Grann v. Thunder Bay Police
    Services Board,
2015 ONSC 438, at paras. 24-25;
Wiles v. Ontario
    (Police Complaints Commissioner),
[1997] O.J. No. 6274, 1997 CarswellOnt
    6039.

[85]

In
    an exercise of hindsight, the trial judge fixated on whether there were
    innocent explanations and found those explanations in the practices of the auto
    recycling industry and Mr. Mercuris trial testimony

[86]

With
    respect, the police failures identified by the trial judge in this case were
    simply insufficient to support a finding their conduct was egregious.

(c)

Conclusion on the Lack of Expert Evidence Issue

[87]

The
    trial judge erred in determining the content of the standard of care without
    expert evidence in the particular circumstances of this case. This was a
    technical, complicated investigation outside the knowledge of an ordinary
    person and there was no basis for finding the police conduct was egregious.

[88]

This
    conclusion provides a sufficient basis to allow the appeal. However it is
    useful to discuss the other issues.

(2)

Whether the Trial Judge Erred in Formulating the Content of the Standard
    of Care by Considering Whether Police Could Prove Mr. Mercuri Had Knowledge
    that the Auto Parts Were Stolen

[89]

Even
    if the trial judge could have determined the standard of care without relying
    on expert evidence, she erred in formulating the content of the standard of
    care. As mentioned above, the standard of care is informed by the legal
    requirement of reasonable and probable grounds to believe the suspect is
    guilty:
Hill,
at para. 55.

[90]

The
    trial judge repeatedly used language that suggested that the police obligation
    was to prove Mr. Mercuris guilt in order to be acting reasonably.

[91]

Whether
    police had reasonable and probable grounds to charge is what should have
    informed the standard of care. And it seems clear that police did so. During
    the investigation, there was a progression in the accumulation of a body of
    circumstantial evidence of knowledge that supported reasonable and probable
    grounds for the charges. This was so at least until the post-committal stage,
    when the credibility of Mr. Mercuris apparent admissions would come into play
    and the potentially exculpatory evidence required ongoing assessment as to
    whether there was still sufficient evidence of knowledge. But at that point,
    the ball was already in the hands of the Crown and the judiciary.

[92]

Further,
    the trial judge relied upon the alleged failure of the police to understand the
    purpose or scope of the
Criminal Code
or the case law relevant to
    their investigation.
The trial judge commented that
    Officer Barclay did not know that the knowledge presumption in the
Criminal
    Code
had been struck down when he commenced the investigation in 1997 and
    that one of the other officers involved was aware of it at the time of the
    search warrant. The trial judge acknowledged that Officer Barclay testified
    that he was aware the presumption had been struck down after discussing it with
    the OPP officer early in the investigation and that he believed and insisted
    that knowledge could be proven by the totality of the evidence without relying
    on the presumption.

[93]

Despite
    this recognition, the trial judge concluded that the police did not conduct the
    investigation as though they were aware of that change in the law. She stated:

In this case, the police paid lip service to the requirement to
    prove Mr. Mercuri knew that vehicles or parts in his possession were stolen.
    They did not evaluate the evidence they collected with proof of his knowledge
    in mind. They did not appear to turn their minds to the provision in s. 354(2)
    of the
Code
that evidence to the contrary provides a defence to
    possession of a motor vehicle with a VIN that is wholly or partially removed or
    obliterated. The failure to understand the law relevant to their investigation
    does not meet the standard of care for a police officer in the circumstances.

[94]

Officer
    Barclays testimony was clear that he did conduct the investigation on the
    basis of the need to prove and not just presume knowledge. The course of the
    investigation is consistent with this. The trial judges finding to the
    contrary is not supported by the evidence.

[95]

Guilty
    knowledge can be established a number of ways, as Martin J.A explained on
    behalf of the court in
Boyle,
at para. 61. The possession of several
    motor vehicles with obliterated VIN numbers which might very well support an
    inference of guilty knowledge on the basis of the improbability of a person
    innocently acquiring such a number of motor vehicles, or 
the giving of inconsistent accounts by the accused as
    to how he came by the property, the purchase of the property at an unreasonably
    low price, or the surreptitious manner in which the transaction by which the
    accused acquired the property took place, and an infinite variety of other
    circumstances.


[96]

As
    defence counsel for Mr. Mercuri at the criminal trial acknowledged during Mr. Mercuris
    testimony at the civil trial, the statement made by Mr. Mercuri was probably
    enough to deal with the knowledge issue for a preliminary hearing, and could
    only be explained away at trial.

(a)

Conclusion on the Content of the Standard of Care Issue

[97]

I
    would conclude that the trial judge, in formulating the content of the standard
    of care, erred by considering whether the police could prove Mr. Mercuri had
    knowledge that the auto parts were stolen rather than whether the officers had
    reasonable and probable grounds to believe that an offence had been committed.

(3)

Whether the Trial Judge Ignored or Misapprehended Relevant Considerations,
    including the Committal of Mr. Mercuri to Trial and Other Judicial Proceedings

[98]

The
    trial judges errors were compounded by her failure to accord proper weight to
    the fact that there had been a committal to trial on all charges after a
    preliminary hearing, or to the role of the Crown and the criminal justice
    system as the prosecution proceeded.

[99]

The
    trial judge said [i]n my view, the police cannot hide behind a committal for
    trial to suggest that their investigation was not negligent. The trial judge
    failed to consider the substantial body of jurisprudence holding that the fact
    that a preliminary hearing specifically concluded that there were reasonable
    and probable grounds for the charges laid is strong evidence that the
    investigation, to that point at least, did not violate the standard of care:
Thompson
    v. R
. (1998), 113 O.A.C. 82, 1998 CanLII 7180 (C.A.), at para. 39;
Roda
    v. Toronto (City) Police Services Board, 2016 ONSC 743, [2016] O.J. No. 513
at
    para. 75;
Fragomeni v. Greater Sudbury (Police Service),
2015 ONSC
    3937, at para. 103;
Wong,
at para. 60; and
Chmielewski v. Regional
    Municipality of Niagara Police Services Board
, 2007 CanLII 31778, 2007
    CarswellOnt 7086 (S.C.), at para. 38, affd 2009 ONCA 51.

[100]

At paras.
    150-151, the trial judge expressed amazement that the police charged Mr.
    Mercuri with possession of stolen goods that they knew were delivered to
    Central under contract to crush them, but persisted with the prosecution of the
    charge until it was dismissed in 2005. She did not consider the fact that the
    police theory of that aspect of the case was that keeping the goods that were
    supposed to be crushed was theft by conversion. This is a sound theory in law.
    Mr. Mercuri was committed for trial on this charge.

[101]

The trial judge
    also found, at paras. 32-33, that the police could not shift the onus onto the
    Crown once charges were laid, noting that the Crowns ability to evaluate the
    merits of the charges had been limited by the information the police gave him
    and that Crown counsel assigned to the case became more dubious about the
    merits of the charges the more he learned about the case.

[102]

However, as
    Wilson J. stated in
Solomonvici v. Toronto (City) Police Services Board
,
    2009 CanLII 39060, 2009 CarswellOnt 4418 (S.C.), affd 2010 ONCA 85, in
    dismissing an action for negligent investigation, at para. 12:

It is important to note that it is up to Crown Counsel to make
    the determination of whether or not there are sufficient grounds upon which to
    proceed to trial in any particular case. The mere fact that the counsel was of
    the view that the chance of a conviction on the sexual assault charge was not
    strong does not mean that there were not reasonable and probable grounds upon
    which to lay the charge.

[103]

The Chief
    Justice emphasized in
Hill
, at para. 50, that while the standard of
    care of a reasonable police officer requires police to weigh evidence to some
    extent during the course of an investigation, they are not required to
    evaluate evidence according to legal standards or to make legal judgments,
    that being the task of prosecutors, defence counsel and judges.

[104]

The trial judge
    failed to place any weight on the committal for trial. She also failed to fully
    assess the role that the Crown played in providing oversight of the prosecution
    despite the inadequacies in what was provided, and to give sufficient
    consideration to the fact that there were several relevant determinations in
    the criminal proceedings. These failures further undermine the trial judges
    conclusions that the standard of care in this case could be evaluated based on
    the knowledge and experience of a Superior Court judge and that the conduct was
    clearly egregious.

[105]

Next, the trial
    judge did not give proper consideration to the fact that the deficiencies in
    the information to obtain the search warrant had been considered in the course
    of the criminal proceedings and that the criminal trial judge had concluded
    that the deficiencies did not warrant exclusion of the evidence. Nor did the
    trial judge adequately consider the connection between the withdrawal of
    charges and the s. 37 ruling requiring the Crown to disclose the location of
    CVIN numbers. Those charges were not withdrawn because the Crown perceived some
    deficiency in the reasonable and probable grounds to charge Mr. Mercuri. The
    Crown could have decided to reveal the CVINs and continue with the prosecution.
    The trial judge leapt from the withdrawal of those charges to a finding of
    negligence premised on the failure of the police. She failed to adequately
    focus on whether the police had reasonable and probable grounds at the time
    they laid these charges.

[106]

I conclude that
    the trial judge erred in failing to properly consider Mr. Mercuris committal
    for trial, the role of the Crown, and the ruling on the search warrant.

(4)

Damages

[107]

In light of my
    proposed disposition of the appeal, it is not necessary to address the issue of
    damages. Nevertheless, it is worth making certain observations.

[108]

First, the trial
    judge did not distinguish between Mr. Mercuri and Central in awarding damages.
    She awarded all categories of damages to the plaintiffs jointly. Central was
    not entitled to the non-pecuniary damages predicated on Mr. Mercuris personal
    experience, nor reimbursement of legal fees that Mr. Mercuri incurred personally
    for his defence of the criminal charges. Mr. Mercuri was not entitled to a
    joint award of Centrals business loss, let alone to the full amount. Mr. Mercuri
    as one of several shareholders was not entitled to an independent share of the
    business loss.

[109]

Second, the
    evidence did not support the trial judges substantial non-pecuniary award of $200,000.
    The trial judge observed that there had been a human cost to Mr. Mercuri in
    terms of his loss of reputation and emotional upset. She made no finding that
    Mr. Mercuris emotional upset rose to the level of personal injury. There was
    nothing in the evidentiary record that would support such a finding.

[110]

The distinction
    between psychological or emotional upset and a disturbance that rises to the
    level of personal injury must be kept in mind, as the Chief Justice explained
    in
Mustapha v. Culligan of Canada Ltd
, 2008 SCC 27, [2008] 2 S.C.R.
    114, at para. 9. She said that [
p]ersonal injury at law
    connotes serious trauma or illness and added that [t]he law does not
    recognize upset, disgust, anxiety, agitation or other mental states that fall
    short of injury.

[111]

Iacobucci J. in
Odhavji Estate v. Woodhouse
, 2003
    SCC 69, [2003] 3 S.C.R. 263, at para. 41, said: 
it
    is well established that compensation for psychiatric damages is available in
    instances in which the plaintiff suffers from a visible and provable illness
    or recognizable physical or psychopathological harm. He also said that as the
    law currently stands, that the appellant has suffered grief or emotional
    distress is insufficient.

[112]

Here, the trial
    judge found Mr. Mercuri suffered emotional upset and summarized the basis for
    that conclusion. The charges had hung over his head for six years. He testified
    he was drawn away from his business pursuits and had to sell his vehicle. He
    felt humiliated and felt that no one would trust him again. He remarked, it
    takes a toll on you. He was concerned about his aging fathers health and
    worried about his family, his business, his employees and their families. He
    felt his parents suffered the brunt of it, but his children were also affected
    at school. He felt that every question from a customer about whether they would
    have a problem with a part or whether a cop would seize it was like a punch in
    the face. Even the acquittal did not produce vindication from the cloud he
    lived under, in a small city, until the charges were dismissed, as doubt in the
    community still lingers.

[113]

As frustrated
    and upset as Mr. Mercuri may have been as a result of the charges against him,
    his unsupported testimony of emotional upset was insufficient to ground the
    substantial award of non-pecuniary damages the trial judge made.

[114]

In making the
    award the trial judge relied on the Supreme Courts decision in
Young v.
    Bella
, 2006 SCC 3, [2006] 1 S.C.R. 108, and on
Lahaie v. Canada
    (Attorney General),
2008 CanLII 68124, [2008] O.J. No. 5276, a decision of
    the Superior Court. In
Young,
the Supreme Court upheld a substantial
    award of non-pecuniary damages. However, there was expert evidence of actual psychological
    damage and suffering in that case: See the Court of Appeal decision,
Bella
    v. Young
, 2004 NLCA 60, 241 Nfld & PEIR 35, at paras. 129-130.
Lahaie
was not a negligence case but a claim for
Charter
damages. Furthermore,
Lahaie
was reversed by this court on the merits and did not address
    the award of damages: see 2010 ONCA 516, 101 O.R. (3d) 241.

[115]

In awarding substantial loss of income damages, the trial judge
    seems to have relied heavily upon what she viewed as the polices breach of the
    standard of care in communicating with the media. The tenor of the trial
    judges reasoning seems to be that police were liable for damages due to all press
    coverage after they had issued a press release or communicated with the media
    about charges that were laid. She said: It does not now lie in the mouth of
    the police to blame the press for damage to Central's business when the police
    provided the story. She even took into account the
headlines
    that accompanied the announcement of Mr. Mercuri's acquittal, noting they had a
    sting implying that Mr. Mercuri was operating a "chop shop" and was
    guilty even though the charges had not been proven.

[116]

Without expert evidence of what normal police practices in
    communicating with the media are or should be, the trial judge was not in a
    position to evaluate whether
the
    action of the police chief in calling a press conference
fell below the
    standard of care in this case. As
i
n
Webb v. Waterloo Regional Police Services Board
(2002), 161 O.A.C. 86,
    2002 CanLII 41983 (C.A.), standard police media policies and practices and the
    publics right to know have to be considered.

[117]

The newspaper
    articles about Mercuris charges were entered as exhibits in this case to show
    that they were published, not for the truth of their contents. They were used
    by the accounting experts in their assessment as to whether the articles were
    related to the business losses. Putting aside that the trial judge appeared to
    rely upon them as substantive evidence of the police conduct, both experts
    acknowledged that, although the timing of the first articles coincided with the
    timing of loss of business profits subsequent to charges, there was no similar
    correlation with the later newspaper articles.

F.

CONCLUSION

[118]

I would allow
    the appeal and set aside the trial judges judgment, save for the award of
    $70,000 for the loss of property improperly stored by the police. That award
    should be in favour of Central alone as it was the owner of the property.

[119]

The parties are
    encouraged to reach agreement on costs of the appeal and trial. If they are
    unable to do so they may make written submissions, not exceeding seven pages
    submitted to the Senior Legal Officer of the Court.

Released: September 2, 2016 (DW)

R.G. Juriansz
    J.A.

I agree G.J.
    Epstein J.A.

I agree S.E.
    Pepall J.A.


