Court of Appeal for Ontario

Citation: Fulcher v. Conklin, 2014 ONCA 710
Date: 2014-10-20
Docket: C57009

Before: Strathy C.J.O., Rouleau and Hourigan JJ.A.

Between:

Edward Bruce Fulcher, Austin Fulcher, by his Litigation Guardian Edward Bruce Fulcher and Novitherm Canada Inc.
Plaintiffs/Respondents

and

Catherine Conklin
Defendant/Appellant

Counsel:
David S. Thompson, for the appellant
Alan L. Rachlin, for the respondents

Heard: October 7, 2014

On appeal from the judgment of Justice Mary A. Sanderson of the Superior Court of Justice, dated April 8, 2013, with reasons reported at 2013 ONSC 2013.

Endorsement

[1] The appellant argues that the trial judge erred in her assessment of Mr. Fulcher’s past and future loss of income. Mr. Fulcher worked at Novitherm Canada Inc. (“Novitherm”), before and after suffering a spinal injury in a collision with the appellant. In the appellant’s submission, the trial judge should not have made an award on the basis of ownership income since there was no evidence that Mr. Fulcher was paid on the basis of his ownership interest in the corporation. Further, in the absence of proper financial statements for Novitherm and faced with the disorganized records of the corporation, she ought to have disallowed any claim for performance and ownership income. The appellant also maintains that the lack of evidence about specific lost sales is fatal to Mr. Fulcher’s claim, since “it is impossible to correlate his physical injuries to any revenue loss.”

[2] The appellant also submits that in the absence of any business valuation and the absence of reliable business records, the trial judge could not explain how she arrived at her damage award. Without a clear formula to calculate damages, Mr. Fulcher should have been limited to nominal damages.

[3] We disagree. Determining the amount for loss of earning capacity is a complex issue of mixed fact and law on which the trial judge is owed considerable deference. There was ample evidence allowing the trial judge to conclude that Mr. Fulcher’s compensation correlated with Novitherm’s overall performance. The trial judge found that Mr. Fulcher’s ability to work had been seriously impaired by the accident and she drew the obvious inferences that, as a result, Novitherm had lost business, and Mr. Fulcher had suffered a loss of earning capacity. These inferences were reasonable given that Mr. Fulcher was one of two primary business partners responsible for the corporation’s growth. The evidence established that Novitherm had no direct competitors, it had been experiencing exponential growth, and it was considering expansion into large potential undeveloped markets.

[4] We do not consider the absence of a business valuation as preventing the trial judge from making a substantial loss of income or loss of earning capacity award. On the facts of this case, such a valuation was unnecessary. The claim was for Mr. Fulcher’s loss of earning capacity and not for the loss in potential sale value of Novitherm.

[5] The trial judge’s damages award should not, in our view, be interfered with. The trial judge specifically stated that she rejected the damage assessment of both the appellant’s and Mr. Fulcher’s experts. However, she considered that the experts’ competing damage assessments provided outer limits to what might constitute reasonable compensation. She indicated that her task was to find the best damage determination that she could within the reasonable range, based on the evidence led at trial. She then set about determining an appropriate figure and explained how she arrived at her figure. Her failure to adopt and apply a specific formula does not, on the facts of this case, constitute an error.

[6] We also would not give effect to the appellant’s submission that the trial judge ought not to have taken into account Mr. Fulcher’s ownership interest in Novitherm. In coming to an award for loss of earning capacity, the trial judge was entitled to take into account the wealth that would have been generated and left in the business but for Mr. Fulcher’s injury. This was one of the many factors she took into account. It was reasonable for her to do so.

[7] The appellant also submits that the trial judge ought not to have allowed Novitherm’s per quod claim. In the appellant’s view, the trial judge erred in finding that there was an employer-employee relationship between Novitherm and Mr. Fulcher such that a per quod claim could be made out. We would not give effect to this submission. The characterization of the employer-employee relationship is largely a question of fact on which the trial judge is owed substantial deference. The trial judge correctly identified the law and, having made the necessary factual findings, applied the law to those facts. In reaching the conclusion that a per quod claim was available, the trial judge made no palpable and overriding error.

[8] For these reasons, the appeal is dismissed. The respondents are entitled to costs fixed at $20,000, inclusive of disbursements and all applicable taxes.

“G.R. Strathy C.J.O.”

“Paul Rouleau J.A.”

“C.W. Hourigan J.A.”