COURT OF APPEAL FOR ONTARIO

MOLDAVER, SHARPE JJ.A. and KILLEEN J. (ad hoc)

DATE: 2004-12-22 DOCKET: C41483

B E T W E E N :

LINDA TRENDLE Petitioner (Wife) (Respondent in Appeal)

• and -

DENNIS TRENDLE Respondent (Husband) (Appellant in Appeal)

Counsel: Tracy L. Miller for the appellant Husband Carolyn R. Thomas for the respondent Wife

Heard: October 20, 2004

On appeal from the judgment of Justice Ronald C. Sills of the Superior Court of Justice dated January 27, 2004.

BY THE COURT:

[1] Dennis Trendle (the husband) appeals from the order of Sills J. requiring, among other things, that he pay to his former spouse Linda Trendle (the wife) an equalization payment in the amount of $76,858.12 from the funds held by Smyth, Hobson in trust. The sum in question represents approximately one-half of the damages awarded to the husband for loss of income as a result of injuries he sustained in a motor vehicle accident in May 1992. At the time of the accident, the husband and wife were married. They separated in April 1998. There is no dispute that the damage award relates to income lost to the husband in the years 1992 to 1996 when the couple were still married. It is also clear that well before the trial of the matrimonial proceeding, the husband and the wife had resolved all property issues arising from their separation with the exception of the wife’s claim for an equalization of the husband’s claim for damages arising from the motor vehicle accident. That claim aside, the husband owed the wife an equalization payment.

[2] The claim in the motor vehicle action was issued in May 1994 but it was only served in November 1998 following a successful motion by the husband to extend the time for service. The motor vehicle claim eventually came to trial before Herold J. in September 2000 (more than two years after the husband and wife had separated). The defendant did not appear at trial and the matter went undefended. In his reasons for judgment, Herold J. considered it “unfortunate” that the action had not been defended. In his view, while the husband’s injuries “met the threshold created by the Ontario Motorist Protection Plan (O.M.P.P.).”[^1], they did so “by the slimmest of margins”. As for the husband’s loss of income claim, Herold J. expressed concerns about its legitimacy. Nonetheless, because the action was undefended, he had “no choice” but to accept the figures provided by the husband. Accordingly, he made the award that gives rise to this appeal.

[3] Herold J.’s judgment in favour of the husband was satisfied in January 2002. The matrimonial trial occurred before Sills J. approximately one year later in December 2003. Sills J. ordered that, for equalization purposes, the wife was entitled to one-half of the lost income damage award made by Herold J. He further found that “the value of the lost income claim was as found by Justice Herold and that value was the same on valuation day [April 28, 1998, the date of separation] as it was on September 13, 2000 [the date of Herold J.’s award].” In coming to that conclusion, Sills J. reasoned as follows:

I determined that given the existence of the judicial adjudication there was no hindsight involved, a final adjudication of value was made and there was no use of “additional facts”. The facts available to Justice Herold were the same as at the date of his assessment as they were on valuation day.

[4] In holding that there were no “additional facts” needed, Sills J. was referring to expert evidence that the husband had sought to tender to show that the value of his loss of income claim at the date of separation was far less than the value ascribed to it by Herold J. In rejecting that evidence, Sills J. found that “the opinion of an expert witness contrary to the determination at trial of Justice Herold was inadmissible as irrelevant.”

[5] The expert whose evidence the trial judge refused to receive was a litigator with experience in personal injury cases. Had he been allowed to testify, he would have stated that in his opinion, on valuation day, the husband’s claim was worth between $25,000 to $50,000 for general damages and nothing for loss of income. In arriving at that conclusion, he considered a host of negative contingencies existing on valuation day that, in his view, significantly reduced the worth of the husband’s claim. The contingencies he identified are listed below:

• the statement of claim had not been served in time and it was questionable whether an order to extend the time for service would be granted;
• there was no basis for thinking that the action would not be defended;
• there was a real question whether the husband’s injuries were sufficient to cross the serious/permanent threshold required under the O.M.P.P., particularly in view of video surveillance that showed him working and engaging in sporting activities and his medical history that revealed pre-existing injuries;
• even if successful in crossing the serious/permanent threshold, the award for loss of income was likely to be low given that the husband was self-employed, his financial records were sparse, he had not filed income tax returns for several years and he had done little if anything to mitigate his losses; and
• assuming success, it was unknown whether the husband would be able to collect on the judgment.

[6] The husband contends that the trial judge should have admitted this evidence and used it to value the loss of income claim for equalization purposes. He submits that by valuing the claim based on Herold J.’s judgment, the trial judge erroneously used a hindsight approach that is at odds with settled jurisprudence which precludes the use of evidence of post-separation events to value, for equalization purposes, contingent assets that form part of the net family property. In support of his position, the husband relies upon the following authorities: Best v. Best, [1999] 2 S.C.R. 868; Arvelin v. Arvelin, [1996] O.J. No. 412 (Ont. Gen. Div.); Dimoff v. Dimoff, [1999] O.J. No. 599 (Ont. Gen. Div.); and Bobyk v. Bobyk (1993), 13 O.R. (3d) 559 (Ont. Gen. Div.).

[7] For reasons that follow, we find it unnecessary to decide (or reconsider) whether hindsight evidence can be used to value contingent assets of the kind in issue here. On the facts of this case, we are of the view that the proposed expert evidence was largely irrelevant in valuing the husband’s loss of income claim for equalization purposes. If it was relevant at all, it was only so in relation to the collectability of any award that might be made in the personal injury action. Specifically, it may have led Sills J. to slightly reduce the award made by Herold J. in the personal injury action but nothing more.

[8] In the personal injury action, Herold J. assessed the husband’s loss of income claim at essentially the amount claimed by the husband. In the circumstances of this case, we can see no reason to permit the husband to displace the judicial assessment he obtained in that action with a different one in the matrimonial proceedings. Simply put, the husband should not be permitted to dispute the value he attributed to the claim he asserted in the personal injury action by presenting different evidence in the matrimonial proceedings. This is especially so when the primary function of that evidence would be to show that the amount sought by him in the personal injury action should be reduced for equalization purposes because in that action, he had grossly inflated his earnings or he had been malingering and failing to mitigate his losses or both. In blunt terms, we fail to see why, for valuation purposes, the husband should be rewarded for being duplicitous or neglectful or both. Viewed that way, we see no basis for interfering with the result arrived at by Sills J.

[9] As for the other grounds of appeal concerning pre-judgment interest and costs, we see no merit in them.

[10] Accordingly, we would dismiss the appeal. The respondent is entitled to her costs on a partial indemnity basis fixed at $10,000 inclusive of G.S.T. and disbursements.

Released: December 22, 2004 “MJM”

“M.J. Moldaver J.A.”

“Robert J. Sharpe J.A.”

“Gordon Killeen J. (ad hoc)”

[^1]: Insurance Act, R.S.O. 1990, c. I. 8, s. 266(1).