DOCKET:C33563
COURT OF APPEAL FOR ONTARIO
FINLAYSON, CARTHY JJ.A. AND SIMMONS J. (AD HOC)
BETWEEN: )
) T. H. Rachlin, Q.C.
ANDREA FINLAYSON, THOMAS ) for the appellant
FINLAYSON, BETTY JEAN SWORD )
And JOHN ANTHONY SWORD )
Plaintiffs )
(Respondents) )
) Ronald D. Manes and
and ) Barbara MacFarlane
) for the respondent
RICHARD ROBERTS, BML LEASING )
And GRANADA CANADA LTD. )
Defendants )
(Appellants) )
) Heard: September 12 and 13, 2000
On appeal from interim reasons of Justice Robert A.F. Sutherland dated November 19, 1996 and supplemental reasons for judgment dated April 16, 1998.
A. Factual Background
1Andrea Finlayson was injured in a motor vehicle accident in 1987. She was 27 years of age. She suffered a Lisfranc fracture of her right foot, which involved multiple fractures and dislocations. Her injury was treated by closed reduction and pinning. Five months later Ms. Finlayson began working as an ICU nurse at the Wellesley Hospital. Later, she transferred to the Special Care Unit at the Credit Valley Hospital, where she was still employed at the time of the trial. In addition, she worked weekends at the Wellesley Hospital. Since her accident, Ms. Finlayson testified that with the exception of two pregnancy leaves, she had not missed a day of work.
2The defendants did not dispute liability. For reasons not explained to this court, the assessment of damages did not commence until April 1995. At the time of the trial, Ms. Finlayson was still experiencing pain in her right foot and was using non-prescription analgesics for relief. She testified that she intended to continue working in the neo-natal nursing unit. Despite the advice of one of the doctors who had examined her, she testified that she did not intend to have a fusion operation to alleviate her pain.
B. Judgment in Appeal
3The trial judge found that Ms. Finlayson was “in denial” of the seriousness of her injury. He used the word “stoic” to describe her attitude. He based his assessment of damages on several assumptions: first, that she would not continue in the nursing field; second, that she would undergo fusion surgery; third, that she would require retraining to be an elementary teacher; fourth, that she would suffer a substantial wage loss due to early retirement; and fifth, that she would have substantial future care costs. The latter costs were held to include $8,500 for psychological counselling as a result of Ms. Finlayson’s persistence in continuing to work as a nurse. The trial judge found that this persistence, though admirable, demonstrated “immaturity and pathological non-acceptance”. However, there was no psychiatric evidence to support either this theory of “denial,” or any other pathological condition. The sole evidentiary basis for such a finding was a psychologist who assessed Ms. Finlayson and used the word “denial” in his evidence, in place of the word “stoical” that was in his written report.
4The trial judge released an interim decision dated November 19, 1996, reported at (1996), 26 M.V.R. (3d) 66 (Ont. Ct. (Gen. Div.)) This was followed by supplemental reasons in April 1998, which are incorporated into the reported decision. The trial judge assessed damages and costs as follows:
Andrea Finlayson
General damages $ 140,000.00
Pre-judgment interest on general
damages, at 10% per annum 112,575.40
Past income loss 71,400.00
Pre-judgment interest on past income
loss, at 5% per annum 28,706.72
Future income loss 396,500.00
Loss of private pension benefits 14,300.00
Loss of CPP pension benefits 7,500.00
Future care costs 188,000.00
Gross-up for income tax 76,800.00
Management Expense 49, 100.00 $1,084,882.10
Thomas Finlayson
FLA damages $ 35,000.00
Pre-judgment interest, at 10%
per annum 28,143.85 63,143.85
Costs (party and party costs to
date of plaintiffs’ settlement
offer, followed by solicitor
and client costs) 403,599.00
$1,551,624.97
C. Disposition
5I conclude that Sutherland J.’s award flowed from a series of misapprehensions of the evidence, and that these extraordinary numbers cannot be justified on the evidence. Regrettably, at this late date, a new trial must therefore be ordered. It would be a miscarriage of justice to leave this judgment in place, and this court is not able to make an appropriate assessment on conflicting evidence.
6It is my intention to deal briefly with some of the errors raised by the appellants. In so doing, I will attempt to avoid comment that may impinge upon a new trial. As well, my observation that the trial judge’s assessment is grossly excessive should not be taken as indicating that Ms. Finlayson is not entitled to a generous award based on proved facts.
D. The Trial Judge’s Errors
7The trial judge made one overarching error. That is, he found the plaintiff to be in “psychological denial”, and then he accepted all the theories and numbers presented by plaintiff’s counsel to create a hypothetical future for the plaintiff. The proper approach to a plaintiff who is braving out her injury is to be generous with general damages, and then to assess other elements of damages on the assumption that the plaintiff will act in the future as she has in the past, and as she says she will act in the future. This assumes, of course, that the evidence is credible and accepted by the trial judge.
(i) The trial judge misapprehended Ms. Finlayson’s evidence:
8Ms. Finlayson presented herself in these terms in her evidence in chief:
Q. You were speaking before about facing some reality. I would like to speak with you about that a little bit more. Mrs. Finlayson, do you think you have a disability?
A. Yes.
Q. Did you ever deny to yourself having that disability?
A. Yes.
Q. And when do you feel that that denial ended?
A. I don’t think it has completely ended. I think that’s what keeps me going. I’m determined not to let this get the best of me.
Q. Mrs. Finlayson, do you feel that you can continue as an ICU nurse or an SCU nurse in reality?
A. In the long term, probably not.
Q. How does that make you feel?
A. It’s upsetting because that’s my life, a big part of my life.
Q. Do you not think that you can regain what you’re losing being an ICU or SCU nurse in another occupation of nursing?
A. I probably could, but it’s very hard to give up your first love. No one – if you truly love what you’re doing, it’s very hard to be forced into a change. I’m not saying that I can’t make change. I have already made changes, but when you feel so strong and so comfortable and so committed to something, it’s hard to let go of.
Q. Have you thought of alternative careers, Mrs. Finlayson?
A. Yes.
Q. Is there any alternative careers that you have considered which you feel you would gain some satisfaction from as a career in the future?
A. Well, right now I do a fair amount of teaching within my job, and so I feel that maybe something with teaching, whether it be handicapped children or whether it be within the nursing realm.
Q. How do you think it’s going to make you feel if you were a nurse teacher in a hospital setting where you used to be an ICU or SCU nurse?
A. It’ll probably be hard because ICU will always be there, that number one thing will always be there. So to know you really can’t dabble in it anymore sort of – it’s hard to deal with.
9The trial judge relied on this evidence to find that Ms. Finlayson would retrain to be an elementary school teacher in the immediate future. He found, in addition, that she would retire early. And he assumed a consequent wage loss through to normal retirement age. In doing so, the trial judge ignored evidence, explored later in these reasons, that ICU nurses burn out early in their careers and that alternative employment was likely for Ms. Finlayson whether or not she was disabled.
(ii) The trial judge misapprehended the medical evidence:
10The second area of critical evidence at trial was given by medical experts. One orthopaedic surgeon who examined Ms. Finlayson in 1989 estimated the likelihood of fusion surgery at 25 per cent over a ten year period. In 1990, he reduced that estimate to ten per cent. Another surgeon recommended a modest surgical correction, but not fusion. A third surgeon, Dr. English, advised in 1994 that Ms. Finlayson’s foot problem would not become serious enough to require surgery. At that time he advised that only five to ten percent of patients with such injuries ultimately require surgery. However, after a visit by the plaintiff just prior to trial, Dr. English changed his opinion. Without the benefit of new x-rays, and despite the fact there was no additional swelling in Ms. Finlayson’s foot and no indication that she was taking medication for pain, Dr. English recommended surgery in his evidence at trial.
11The defendant’s expert, Dr. Cameron, examined the plaintiff in 1990. In his view, while the likelihood of Ms. Finlayson developing osteoarthritis was relatively high, the likelihood of her needing surgery was relatively low. He testified that consistent with his original diagnosis, each year that went by would decrease the likelihood that Ms. Finlayson would need surgery. He testified that surgery is a matter of individual choice, based on considerations such as pain and ability to walk. He testified that Ms. Finlayson’s analgesic intake was low, and that she walked well. Thus, Dr. Cameron felt that the likelihood of Ms. Finlayson needing surgery at this point was very remote. Furthermore, he saw no reason why she could not continue work as an ICU nurse.
12In his assessment of the plaintiff’s future, it was open to the trial judge to choose between these conflicting medical opinions. However, in so doing, the trial judge misapprehended the medical evidence before him.
13On cross-examination, Dr. Cameron was asked whether having seen Ms. Finlayson more recently and having heard her complaints of pain, Dr. English had a better opportunity to form a judgment. Dr. Cameron responded:
A. No, I don’t think so, because you see this is fairly straight forward. There’s no big mystery here, I mean, as to what happened to her and what the eventual outcome is liable to be. I don’t think anything has changed since my initial report. I think events have come out exactly as I suggested they would. As to Ted English having seen her three times and my seeing her once, I don’t think that matters a great deal, because the decision based on whether or not she needs surgery, there are a couple criteria which I discussed earlier, and that is pain and inability to walk.
Q. Yes. Now, Doctor, you did say that the pain can be subjective?
A. Yes.
Q. All right. He had the advantage of seeing her more recently than you did, and to determine the pain based on certain complaints, fair?
A. Well, yes, but you see there’s always a – trial contaminates things, if I can put it that way. No one in their right mind is going to come up to a doctor and say my foot has suddenly, magically gotten better two weeks before a trial. Then, so, you cannot rely on this sort of a situation, and you have to really rely on her analgesic intake.
14The trial judge’s response to this evidence was, at paras. 102 and 103:
On being asked whether it would have helped him to see the final report of Dr. English, Dr. Cameron made some disturbing and in my view quite inappropriate statements. In effect, he said that it would not have helped him to see the opinion in question, because it was, or would be, “contaminated” because it was issued too close to the commencement of the trial. The clear implication is that the timing of the opinion relative to the commencement of the trial would have caused Dr. English to tailor his opinion in a way more favourable to a larger recovery by the plaintiff. No particulars were given. The opinion was expressed as a generalization that included Dr. English. Having heard the careful manner in which the latter explained the changed complaints of pain (by a patient that he had come to trust in such matters) had caused him to change his opinion as to the desirability of a fusion operation. I felt that Dr. English was being recklessly and irresponsibly maligned and insulted. I remember thinking that if this had been a jury trial I would have had to point out to the jury, in no uncertain terms, that Dr. Cameron’s status as an eminent orthopaedic surgeon did not include qualification to express opinions of this sort – and that the opinion should be ignored. I believe that a privilege has been abused and that the court has a duty to protect its process from such abuse. There is also a self-damaging aspect to such a generalized assertion of “contamination”. The question that arises naturally is whether any opinion of Dr. Cameron himself that is issued close to the time of trial is seen by him as similarly “contaminated”. If so, an expert witness is inviting disbelief of his opinions – or is asserting a right to, or acknowledging practice of, tailoring of opinion evidence.
At the time I was beginning to become angry about this matter I was diverted and instructed by the superior response of Mr. Manes, who proceeded to conduct a virtual clinic on advocacy in cross-examination, by consistently addressing his questions to Dr. Cameron’s best professional self, treating the doctor almost as if he were Mane’s own expert witness. As a result of astute questioning a large number of acknowledgements favourable to the plaintiff’s case were obtained.
15This reasoning shows a clear misunderstanding by the trial judge of the concern being expressed by Dr. Cameron. Dr. Cameron was expressing the legitimate opinion that assertions of pain may be suspect when made on the brink of a trial. This concern was not directed at Dr. English. That the trial judge’s judgment was distorted is confirmed by a reading of the cross-examination to which he paid such high tribute. Contrary to his expressed recollection, the evidence given by Dr. Cameron in cross-examination generally confirms Dr. Cameron’s earlier testimony and includes no retractions. Answers favourable to the plaintiff included acknowledgements of the pain she was suffering and of her stoic nature, and the expectation that she is likely to suffer from ongoing osteoarthritis.
16On one point the trial judge simply misconceived answers of Dr. Cameron on cross-examination. He made two observations at separate points in his reasons, at paras. 105 and 51:
Dr. Cameron also acknowledged that he agreed with Dr. Czitrom that there would not be any significant improvement, and that pain could reach such severity that further surgical intervention would be necessary. Dr. Czitrom had estimated that there would be 10% chance that such further surgery would become necessary over the ten years following June, 1990, whereas Dr. Cameron was of the opinion that there was a 25% chance of that. On the whole then, the result of the cross-examination was a position much less sanguine than that expressed by Dr. Cameron in his direct testimony.
On cross-examination, after he had been intelligently brought to book by Mr. Manes, the defendant’s principal medical witness, the renowned orthopaedic surgeon, Dr. Hugh Cameron, testified that he either agreed with or could not disagree with, the prognosis given by Dr. Czitrom in the latter’s June 27, 1990 report, except that Dr. Cameron believed that the chances of a fusion operation being required were 25% and not 10%.
17The cross-examination produced these two answers from Dr. Cameron:
Q. The possibility of this is estimated at approximately 25 percent over the next ten years; do you agree with that statement at that time?
A. Absolutely not. No series out of – I have ever seen of Lisfrancs has ever had an incidence of 25 percent of fusions.
BY MR. MANES:
Q. These changes can be considered permanent at the present time and is not probably that any significant improvement will take place; do you agree with that?
A. Yes.
Q. It is possible that further deterioration of this condition could take place and that pain would reach such severity that further surgical intervention would be necessary in the form of a fusion of certain joints in the forefoot; do you agree with that statement?
A. Yes.
Q. The possibility of this is estimated at approximately ten percent over the next ten years; do you agree with that?
A. Yes, you see this is down to a reasonable level from 25 percent. Now you’re back to something which is much more sensible.
18The trial judge described Ms. Finlayson’s medical prognosis as follows: “unless she has the operation her condition will deteriorate markedly”. Dr. Cameron’s view was that the plaintiff’s condition had stablized, subject to osteoarthritis, and that she could continue with life as before the trial. The trial judge’s description of the prognosis must therefore be a reference to the evidence of Dr. English. However, nowhere in the transcript can I find such evidence. Dr. English merely testified that the pain Ms. Finlayson was experiencing would be lessened by a successful fusion. He stated in passing that pain is a very difficult thing for a physician to assess. At no point did he suggest that without a fusion, a marked deterioration in Ms. Finlayson’s condition would follow.
19At another point in his reasons, the trial judge makes reference to a supposed admission by both Dr. Cameron and a nursing professor, Katherine Jones, that some ICU nurses continue in their work to age 65. This led the trial judge to a finding that Ms. Finlayson would also have done so. This finding had an important impact on findings related to future wage loss and job retraining. In fact, Ms. Jones’ evidence was that given the high “burn out” rate, there is a high turnover among nurses in ICU and SCU units. Dr. Cameron testified that to be an ICU nurse is a job for a young person, and that most eventually move to a less stressful job.
20I do not wish to be taken as favouring Dr. Cameron’s evidence over that of Dr. English. What I am seeking to recount is a review of the evidence sufficient to support my conclusion that the trial judge appears to have moulded the medical evidence to a shape which fitted his view as to the best interests of Ms. Finlayson. He then assigned dollars to accommodate Ms. Finlayson’s future career, as hypothesized by her counsel.
21A new trial is needed so that the medical evidence, the history of Ms. Finlayson’s past 13 years, and her present intentions can all be analyzed and assessed objectively.
22I recognize that this result is a heavy blow to Ms. Finlayson, who has waited so long for the administration of justice to do her justice. In the circumstances, this Court has no alternative. To impose our own assessment of damages without an opportunity to see and hear the witnesses would produce an arbitrary result. We can only hope that a new trial will be conducted soon, bringing this litigation to a conclusion.
(iii) The trial judge erred in his assessment of costs:
23Because costs may be an issue at the new trial, I will comment on their disposition by Sutherland J. The plaintiff filed an affidavit stating that at the outset, Torkin Manes agreed to act on the basis of deferring fees and disbursements in return for a substantial premium at the close of the case. This premium was to be in recognition of the risks taken by counsel and the results achieved. An offer to settle was made by the plaintiffs prior to trial, which proved to be less than the damages awarded by Sutherland J. Rule 49 therefore called for the defendant to pay solicitor and client costs following the date of the offer. Mr. Manes presented a substantial bill which included a rate per hour of $583.00 during trial. He also asked for a premium over all hourly rates. In addition to the hourly rate, the trial judge added 50% as a premium for risk and success.
24For some years, the contingency-like fees approach has been condoned by the courts, particularly in negligence claims. However, a premium above the normal fee is a private matter between a client and her solicitor. A premium fee will vary from client to client, and with risk and expense from action to action. Such a fee is agreed to at the outset of the proceeding, and reflects the circumstances at that date.
25A premium fee does not fit with Rule 49 concerns and is unfair to a defendant. On the date of an offer to settle, the risk of refusal is of future costs which can be measured against general experience. A defendant has no knowledge of private arrangements between the plaintiff and her counsel, and thus has no means of measuring the risk of refusing the plaintiff’s offer. Moreover, when the original arrangement is made for a premium, it is expected that it will be paid out of the recovery and added on to party-and-party costs. That understanding with the client can remain intact when the opposite party pays solicitor client costs by adding a less substantial premium to the client's bill. To inflict it upon the defendant under Rule 49 turns the rule from one that induces and encourages settlements, to a rule that penalizes a defendant for not accepting an offer by imposing what may be a totally unexpected obligation in an unknown amount. It also introduces the added difficulty presented by typical plaintiffs who would happily agree to any amount of premium that an insurer pays to counsel.
26The modern standard for the assessment of solicitor and client costs as between the parties was stated by Henry J. in Apotex Inc. v. Egis Pharmaceuticals, [1991] O.J. No. 1232. These costs are intended to fully indemnify the beneficiary, while excluding costs not reasonably necessary to fully and fairly prosecute or defend the action. In Apotex there was no issue of a premium. Nevertheless, in the instant case Sutherland J. applied that approach to justify recovery of the premium owed to the client.
27In Job v. Re/Max Metro-City Realty Ltd., [2000] O.J. No. 1449, Panet J. at p. 5 stated:
The Plaintiff has referred to the decision in Equity Waste Management of Canada Corp. v. Halton Hills (Town) (1995) 1995 7182 (ON SC), 22 O.R. (3d) 796, in which it was indicated that, in appropriate circumstances, a premium can be a proper component of a party and party bill assessable on a solicitor-client basis. In my view, the financial arrangements between solicitor and client, unless illegal or improper in some way, are entirely a matter between those parties. The burden or benefit of any such arrangement should not form part of the considerations in fixing costs as between that party and the other party in litigation. The fact that counsel for the Plaintiff took on this case on some form of a contingency basis is not a proper component of a bill assessable on a solicitor and client basis which is to be paid for by the other party. I conclude therefore that no premium should be included and awarded to the Plaintiff in fixing the costs on a solicitor and client basis in this case.
28I agree with Panet J. to the extent his reasoning applies to assessments flowing from a Rule 49 offer to settle. Full indemnity may be justified in the exercise of a court’s discretion where, for instance, solicitor and client costs are awarded because of a defendant’s misconduct. However, in order to maintain the integrity of the offer to settle machinery, the Rule 49 considerations referred to above compel a more restrictive approach. I therefore conclude that what is commonly known as a “risk premium” should not be included in a solicitor and client assessment under Rule 49.
E. Conclusion
29The appeal is allowed, the judgment below is set aside and a new trial directed. The derivative claim of Mr. Finlayson must also be retried.
30Costs of the appeal should be to the appellant, to be set off against recovery at the new trial. To the extent that an artificial basis for the claim was presented, the plaintiffs, through their counsel, were in part responsible for the outcome of the first trial and the necessity for a new trial. However, in consideration of Mrs. Finlayson’s position as an injured party with no relief, I would order no costs of the first trial.
31The affidavit filed in respect of costs reads in part “Torkin Manes accepted the retainer on the basis that it would assume the entire responsibility for fees and disbursements without liability to me unless there were proceeds out of which these fees and disbursements could be paid”. I leave it to others to determine whether that affects liability for fees to this date.
Released: October 17, 2000 “GDF”
“J.J. Carthy J.A.”
“I agree G.D.Finlayson J.A.”
“I agree J. Simmons J. Ad Hoc”
