COURT OF APPEAL FOR ONTARIO

DATE: 20000814

DOCKET: C30711

OSBORNE A.C.J.O., WEILER and CHARRON JJ.A.

BETWEEN: )

) Henry Lang, in person

HENRY McALISTER LANG )

Plaintiff/Appellant )

) Malcolm McLeod

• and - ) for the respondent

GERARD McKENNA )

Defendant/Respondent )

) Heard: May 23, 2000

On appeal from the judgment of C.B. Noble J., with a jury, dated September 14, 1998.

OSBORNE A.C.J.O.:

Overview

[1] By the verdict of a jury, in the form of the jury’s answer to a question put to them by the trial judge, the appellant succeeded in his claim against the respondent. His success was, however, short lived since the trial judge on the respondent’s motion under Rule 52.08(1)(c), concluded that there was “no evidence” to support the jury’s answer. He thus dismissed the appellant’s motion to enter judgment in accordance with the jury’s verdict and instead directed that there be a new trial. The appellant submits that the trial judge erred in concluding that there was no evidence to support the jury’s answer to the single question put to them concerning the appellant’s claim. The respondent, in his cross-appeal, submits that once the trial judge found that there was “no evidence,” he should have dismissed the appellant’s action and not directed that there be a new trial. The principal issue on this appeal is whether the trial judge was correct in finding that there was “no evidence” to support the jury’s answer to the question the trial judge put to the jury. The principal issue on the cross-appeal is whether the trial judge was correct in directing that there be a new trial, once he had held that there was no evidence to support the jury’s verdict.

Background

[2] The appellant is a lawyer who acted for the respondent in a personal injury action in which the respondent sought compensation for injuries he received in an October 1977 fracas in a hotel bar. In December 1979, the respondent secured a judgment against his assailant, Greco, however his action against the hotel was dismissed. The respondent appealed from the dismissal of his action against the hotel and this court ordered a new trial in April 1985. The appellant did not represent the respondent at the new trial. In March 1982, the appellant’s solicitor-and-client costs with reference to the respondent’s action against Greco and the hotel were assessed and a judgment was entered accordingly. The respondent then pursued his action against the hotel.

[3] On March 11, 1983, the respondent was injured in a motor vehicle accident. At the time, the respondent was a passenger in a car owned and driven by Wendy Cameron. On January 10, 1985, he sued Ms. Cameron and the other driver of the other car involved in the accident. In his action, he claimed general and special damages, including loss of income.

[4] In September 1987, the respondent made an assignment in bankruptcy. He was discharged from bankruptcy in February 1988. The appellant did not disclose the existence of his motor vehicle accident or his claim in the action arising from it for loss of income in an earlier judgment debtor examination. In August 1989, the appellant learned of the respondent’s motor vehicle accident and the action which the respondent had commenced to recover damages from the owner and driver of the other car involved.

[5] On December 12, 1991, the respondent, through his solicitor, offered to settle his motor vehicle accident claim for $450,000, costs of $50,000 and assessable disbursements, less payments in advance totalling $40,000. As part of his settlement offer the respondent agreed to release the defendants from all claims arising from the motor vehicle accident. The damage items referred to in the offer conspicuously excluded any identified claim for loss of wages. The respondent’s offer was not accepted and the action proceeded to trial. On April 21, 1992, after the trial had begun, the respondent accepted the defendant’s offer to settle of $330,000 plus costs to be agreed upon, or assessed, less the $40,000 payments in advance. Some time later the parties to the motor vehicle accident litigation agreed to costs fixed at $30,000. This settlement was concluded after the appellant was discharged from bankruptcy.

[6] The respondent’s solicitor in the motor vehicle accident litigation testified that because of the respondent’s sporadic work record and the fact that the respondent was unemployed at the date of the accident, he did not think that the respondent had a valid wage loss claim for that period between the date of the accident and the date of the respondent’s bankruptcy. However, on October 10, 1990, the solicitor for the defendant in the respondent’s motor vehicle accident claim advised the respondent’s trustee in bankruptcy that the respondent’s wage loss claim from the date of the accident to the date of his bankruptcy was $83,935. This appears to be a defence estimate of the loss of income component of the respondent’s claim for damages in the motor vehicle accident litigation.

The appellant’s action against the respondent

[7] On May 5, 1992, the appellant obtained an order under s. 38 of the Bankruptcy and Insolvency Act R.S.C. 1985, c. B-3, as amended by S.C. 1992, c. 1 and S.C. 1992, c. 27 permitting him to bring an action in his own name to recover any money received by the respondent in the settlement which was paid as compensation for his wage loss between the date of the accident and the date of his assignment in bankruptcy. Once the s. 38 order issued, the appellant commenced this action against the respondent and others. In due course the respondent served a jury notice. Notwithstanding at least four motions by the appellant to strike out the jury notice, the action proceeded to trial before Noble J. and a jury.

[8] It is apparent from a review of the trial record that the factual issue which the jury had to resolve was whether the respondent’s $330,000 settlement included loss of income from the date of the accident to the date of the appellant’s assignment into bankruptcy.[^1]

[9] The appellant contended that the settlement of the respondent’s motor vehicle action included loss of income from the date of the motor vehicle accident. The respondent contended that it did not. This evidentiary conflict presented the key factual issue to be resolved by the jury. If the respondent’s motor vehicle accident settlement included loss of income between the date of the accident and the trial, that payment would constitute property of the bankrupt and would be available to the appellant to discharge this account. Against that background, the trial judge put one question to the jury in respect of the appellant’s claim:

Is Mr. Lang entitled to be paid his account out of the motor vehicle accident settlement?

In his charge to the jury the trial judge made it clear that in his view there was no evidence that the settlement included anything for lost wages between the date of the motor vehicle accident and the date of the appellant’s assignment in bankruptcy. In the course of his charge, the trial judge reviewed the relevant provisions of the Bankruptcy and Insolvency Act, including the meaning of “property” in the Bankruptcy and Insolvency Act. No issue is taken with any aspect of the charge to the jury, including that part of the charge dealing with “bankruptcy” law issues.

[10] After a lengthy deliberation the jury answered the question set out above, “yes”. The respondent opposed the appellant’s motion for judgment and moved under Rule 52.08 to dismiss the appellant’s action on the basis that there was no evidence to support the jury’s answer to the question put to them. Rule 52.08 provides:

52.08 (1) Where the jury,

(a) disagrees:

(b) makes no finding on which judgment can be granted; or

(c) answers some but not all of the questions directed to it or gives conflicting answers, so that judgment cannot be granted on its findings,

the trial judge may direct that the action be retried with another jury at the same or any subsequent sitting, but where there is no evidence on which a judgment for the plaintiff could be based or where for any other reason the plaintiff is not entitled to judgment, the judge shall dismiss the action.

[11] After hearing submissions on the “no evidence” issue, the trial judge accepted the respondent’s “no evidence” position. He said:

… I proceed on the basis that a trial judge, except on narrow or technical grounds, for example, the correction of a clerical error … may only reject the verdict of a jury in a civil case where there is no evidence to support the findings of the jury, or where the jury gives an answer to a question which cannot in law provide a foundation for judgment. [799] [Emphasis added.]

The trial judge then directed that there be a new trial. He said:

There will be an order directing a new trial as to the issue or issues raised in the statement of claim and the statement of defence.

He reserved costs of the appellant’s action to the trial judge hearing the new trial and dismissed the respondent’s counterclaim without costs.

Analysis

[12] As I have said, no bankruptcy or related issues are raised on the appeal or the cross-appeal which mainly concern only the correctness of the trial judge’s “no evidence” finding and his new trial order consequent upon that finding. In brief, the appellant contends that there was evidence from which the jury could conclude that the appellant was, in the language of the question, “…entitled to be paid his account of the proceeds of the motor vehicle accident settlement.” Thus, the appellant submits that the trial judge erred in not issuing judgment in accordance with the jury’s answer to the question put to them. The respondent submits that the trial judge was correct in finding that there was no evidence to support the jury’s answer to the question but that the trial judge erred in not dismissing the appellant’s action. The respondent submits, in the alternative, that if there was some evidence to support the jury’s verdict that evidence was, as the respondent’s factum put it, “of trifling weight.” Thus, the respondent contends the jury’s verdict was perverse.

[13] Section 108(5)(a) of the Courts of Justice Act R.S.O. 1990, Chap. C.43 provides that in an action tried with a jury, the trial judge may require the jury to answer specific questions (as happened here) and judgment may be entered in accordance with the jury’s answers.

[14] Rule 52.09 provides that the verdict of the jury “… shall be endorsed on the trial record.” This does not affect the operation of Rule 52.08(1)(c) which may determine whether judgment should be issued in accordance with the jury’s verdict.

[15] Rule 52.08(1)(c), which seems to me to reflect the common law, gives the trial judge authority to direct a new trial with another jury if the jury answers some, but not all, of the questions directed to it or gives conflicting answers. The rule further provides that in cases where there is “no evidence” on which a judgment for the plaintiff could be based, the trial judge “… shall dismiss the action.” Thus, it seems to me to be clear that the trial judge was required to dismiss the action once he found that there was no evidence on which judgment for the appellant could be based.

[16] Rule 52.08(1)(c) would also apply and permit the dismissal of an action if there is no evidence to support an essential element of the plaintiff’s claim: see Linette v. Strasberg, [1984] O.J. 2354, where the trial judge, Sutherland J., concluded that there was no evidence of the materiality of a risk which the plaintiff contended had not been disclosed by the defendant surgeon.

[17] As the appellant’s case was put to the jury, the central factual issue for the jury was whether the respondent’s settlement of $330,000 plus costs included the $83,995.20, or some other amount, for loss of earnings accruing from the date of the accident to the date of the respondent’s bankruptcy.

[18] In my opinion, there was evidence to support the jury’s answer to the question – “is Mr. Lang entitled to be paid his account out of the motor vehicle accident settlement.” The respondent made a claim for damages in his motor vehicle accident claim that included loss of income before trial. In paragraph fourteen of the respondent’s motor vehicle accident statement of claim the respondent pleaded “as a result of the accident and the injuries sustained, the plaintiff has been unable to work from the date of the accident to the date hereof [the statement of claim was dated January 10, 1985] and will be unable to work in the future. The plaintiff has lost income to date of at least $20,000.” The respondent’s statement of claim in the motor vehicle accident claim was later amended to claim $350,000 for special damages.

[19] The respondent’s solicitor in the motor vehicle accident claim testified that in his opinion the respondent’s general damages (pain, suffering and loss of enjoyment of life) had a value of about $80,000 to $100,000. This would leave $230,000 to $250,000 of the $330,000 settlement to be allocated to other damage claims. He also testified that on a “best claim” assumption, the respondent’s loss of income from the date of the accident to the date of the trial was about $350,000.

[20] Counsel for the defendant’s insurer in the respondent’s motor vehicle accident claim, in a letter to the trustee in bankruptcy written on October 10, 1990, stated:

Based on the material I have in my possession the wage loss claim up to the date of bankruptcy, that being September 8, 1987, is the amount of $83,935.20.

[21] The circumstances of the filing of this letter require some brief comment. The appellant in oral argument said that by the time of this trial the solicitor for the defendant’s insurer in the motor vehicle accident litigation had been appointed to the bench. He was sitting in Windsor when he would otherwise have been called to testify at this trial. In the circumstances, at least according to the appellant, it was agreed that the solicitor’s letter to the trustee would be filed. The appellant filed the letter during his testimony with the stated consent of counsel for the respondent who said at the time:

No objection to that letter being filed. My friend asked me if he needed to call Mr. Caputo to file that letter and I said no, he did not.

[22] The trial judge in receiving the letter suggested to the appellant that in reply he might let the jury know what it was all about, if the appellant intended to refer to it further. The letter does not appear to have been referred to further in the evidence.

[23] It is quite apparent that the October 10, 1990 letter was filed to avoid calling its author to testify. The appellant made this clear when he advised the trial judge “it’s just that I’d like to be able to release the witness, Your Honour.” In my opinion, this letter, when considered with the other evidence, provides some evidence that the respondent’s $330,000 settlement included compensation for loss of income in the period between the date of the motor vehicle accident and the date when the appellant made his assignment in bankruptcy.

[24] If there is some evidence to support the jury’s verdict (as distinct from no evidence), it is still open to the unsuccessful party to contend on appeal that the jury’s verdict was not supported by the evidence. However, as I have said, the unreasonable or perverse verdict issue is an appellate court issue, not an issue to be dealt with by the trial judge under Rule 52.08(1)(c). In my opinion, it cannot be said that the jury’s verdict was perverse. The jury was entitled to draw reasonable inferences from evidence that it accepted. Thus, I think it was open to the jury to conclude that in the motor vehicle accident settlement, the respondent received some compensation for loss of income between the date of the accident and the date of his bankruptcy. Put another way, a properly instructed jury, acting judicially, could reasonably have answered the relevant question as this jury did.

Conclusion

[25] For these reasons, I would allow the appeal and set aside the order of the trial judge directing a new trial. Judgment should be entered in the appellant’s favour in the amount of $47,281.40 plus accrued interest. The amount of $50,000 paid into court should be paid out to the appellant in partial satisfaction of this judgment. The appellant is entitled to costs of the appeal and of the trial. The appellant, in my view, should not be entitled to costs in connection with the preparation of the supplementary appeal book, the amended supplementary appeal book, the amended appellant’s factum and the supplementary appellant’s factum. One appeal book and one appellant’s factum would have been sufficient.

[26] With respect to the cross-appeal, which is based on the premise that the trial judge’s no evidence finding was correct, I would say only that if there was “no evidence” to support the jury’s verdict, the trial judge should have dismissed the action; he thus erred in ordering a new trial. Since there was evidence to support the jury’s verdict, the cross-appeal is redundant and must be dismissed.

[27] I would dismiss the cross-appeal, but without costs.

[28] The appellant also seeks solicitor and client costs of a motion brought before Vallin J., which was dismissed and of his successful motion before Noble J. for leave to appeal Vallin J.’s order and his costs of his appeal from Vallin J.’s order. The costs of these proceedings were reserved to the trial judge by this court but were not dealt with by the trial judge, I assume inadvertently. The appellant, in his amended factum, also seeks costs of the respondent’s counterclaim which was dismissed without costs in accordance with the jury’s answers to various questions put to them.

[29] The trial judge dismissed the respondent’s counterclaim without costs. I see no basis upon which to interfere with the exercise of his discretion in that regard. In any case, since leave to appeal the counterclaim costs order has not been sought there is no basis to proceed further with that issue.

[30] With respect to the motion before Vallin J., the application for leave to appeal and the appeal from Vallin J.’s order, I would fix costs of those proceedings in the total sum of $1,500.

Released: August 14, 2000

“C.A. Osborne A.C.J.O.”

“I agree K.M. Weiler J.A.”

“I agree Louise Charron J.A.”

[^1]: There were other factual issues with which the jury had to deal, however, these issues pertained to the respondent’s counterclaim in which the respondent sought damages of $100,000 and punitive damages of $25,000 for emotional upset. The counterclaim questions put to the jury generally concerned whether the appellant’s actions in relation to his attempts to collect his solicitor and client costs from the respondent were for a collateral or improper purpose.