COURT OF APPEAL FOR ONTARIO

DATE: 20231204 DOCKET: C70763, C70764 & C70786

Doherty, Pepall and Zarnett JJ.A.

DOCKET: C70763

BETWEEN

Geraldine Sanson Plaintiff (Respondent)

and

John B. Paterson Defendant (Appellant)

DOCKET: C70764

AND BETWEEN

Geraldine Sanson Plaintiff (Respondent)

and

Security National Insurance Company Defendant (Appellant)

DOCKET: C70786

AND BETWEEN

Geraldine Sanson Plaintiff (Respondent)

and

Security National Insurance Company Defendant (Appellant)

Counsel: David Zarek and Matthew C. Owen, for the appellant John B. Paterson Nikoleta Koutsoubos-Giovanoglou and Kevin Temple, for the appellant Security National Insurance Company Neil G. Wilson and Meaghan Coker, for the respondent

Heard: October 31, 2023

On appeal from the judgment of Justice William D. Black of the Superior Court of Justice, dated August 18, 2022.

REASONS FOR DECISION

Introduction

[1] This appeal involves the collision of a motor vehicle with a cyclist, now a frequent occurrence on Toronto streets.

[2] The respondent cyclist, Geraldine Sanson, sued the appellant driver, John Paterson, and was granted judgment for over $2.5 million in damages. Mr. Paterson and the respondent’s excess insurer, Security National Insurance Company (“Security National”), appeal from that judgment.

[3] For the reasons that follow, we dismiss the appeal with the exception of the appeal of the past and future loss of income award, which we allow.

Facts

[4] The respondent is acknowledged to be a highly respected human rights lawyer. On October 19, 2012, she was cycling home from work and was in the westbound curb lane of College Street approaching Dufferin Street in Toronto. She testified that she came to a stop when she saw the traffic light changing red. She brought her bicycle to rest atop one of the sharrow symbols in her lane. The sharrow symbol denoted a lane to be shared by bicycles and cars. She recalled that when she came to a stop, there were no vehicles other than her bicycle in either of the two westbound lanes. While she waited, she observed a vehicle pull up adjacent to her in the centre lane. She was also aware that another vehicle had pulled up in the curb lane behind her as she could hear its engine. When the light turned green, after looking left and right, she began to pedal through the intersection. She felt a car clip her bicycle from behind which caused her to lose her balance. She then felt the car strike her bicycle again. This hurtled her from her seat. She hit the pavement with her chin and the forehead portion of her helmet.

[5] The respondent testified that Mr. Paterson approached her and identified himself as the driver of the car that had collided with her. A witness to the aftermath of the collision encouraged the respondent to take photographs of his car to document a mark on the passenger side which the respondent maintains resulted from the contact of the car with her bicycle.

[6] For his part, Mr. Paterson testified that he was driving home from the gym. As he approached the intersection of College and Dufferin Streets, he pulled into the curb lane to get around a line of cars in the centre lane. He noticed a cyclist right up against the curb. This meant to him that there was room for him to pull his car up beside her, leaving a distance of a meter or more between the two. He disagreed that the respondent was atop the sharrow symbol. When the light turned green, he was focused on the lane ahead of him and began to advance into the intersection. He did not see the cyclist but heard a noise and turned his head and saw the cyclist falling away from his car.

[7] The trial judge found that Mr. Paterson did not pay any attention to the cyclist to determine her position and to ensure it was safe for him to accelerate forward into the intersection. The trial judge’s impression was that he was preoccupied with the upcoming maneuver he would have to make to move from the curb lane to the centre lane to avoid cars parked in the curb lane ahead. The trial judge found it likely that the cyclist was not right up against the curb as Mr. Paterson had suggested but likely on or near the sharrow symbol as the respondent had recalled. Mr. Paterson had failed to watch the respondent closely to ensure his safe passage and did not look at her at all as he was accelerating into the intersection. He did not notice her till the impact, at which point he got out of his car to see if the respondent was all right. The respondent acknowledged that there was a scuff mark or smear on the side of his car caused by contact with the bicycle.

[8] The trial judge found that Mr. Paterson had failed to discharge the reverse onus found in s. 193(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8. He did not find that any conduct on the respondent’s part caused or contributed to the collision. He found Mr. Paterson was wholly responsible and liable for the collision.

[9] The trial judge addressed the consequences of the collision. He considered the medical and psychological evidence, as well as the testimony of the respondent’s life partner, friends, colleagues, and clients.

[10] In analysing causation, he found the respondent to be a credible witness whose complaints were confirmed by essentially unchallenged medical evidence. He concluded that she had demonstrated on a balance of probabilities that she suffered and continues to suffer injuries and symptoms caused by the collision. She was more likely than not in the minority of patients who continue to suffer from mild traumatic brain injuries on an ongoing basis and her injuries had persisted to the point that they would now be regarded as permanent.

Liability

[11] On appeal, Mr. Paterson submits that the trial judge erred in his liability analysis and reasons. In particular, he challenges the trial judge’s factual findings with respect to the positioning of his vehicle relative to the respondent’s bicycle. He also submits that the trial judge ought to have conducted an Anns/Cooper analysis to determine the standard of care applicable to the respondent as a cyclist with respect to other users of the sharrow lane.

[12] Section 193(1) of the Highway Traffic Act provides:

When loss or damage is sustained by any person by reason of a motor vehicle on a highway, the onus of proof that the loss or damage did not arise through the negligence or improper conduct of the owner, driver, lessee or operator of the motor vehicle is upon the owner, driver, lessee or operator of the motor vehicle.

[13] The trial judge found that Mr. Paterson had not discharged this onus. His self-acknowledged failure to look at the respondent once the light turned green in order to ensure he could safely pass her as he entered the intersection reflected a failure to meet the minimum requirements of basic prudence. The trial judge found that no conduct of the respondent contributed to the collision. The trial judge addressed details of the collision including the location of the parties’ vehicles and determined that Mr. Paterson was insufficiently attentive. Moreover, the respondent’s evidence was that she was hit twice by a car coming from behind and that Mr. Paterson identified himself as the driver of the car that had collided with her. The mark on his car was consistent with a collision between the respondent’s bicycle and the appellant’s car. In essence, Mr. Paterson failed to disprove negligence. As such, he was responsible for the collision. Given the reverse onus and the trial judge’s finding that Mr. Paterson did not satisfy his burden, there was no need to engage in any Anns/Cooper inquiry. Liability was established. We see no basis for any appellate intervention.

Damages

[14] The trial judge made the following awards:

• $250,000 for pain and suffering and loss of enjoyment of life plus $31,107.46 for prejudgment interest;
• $1,032,437.24 for past loss of income plus $66,162.20 for prejudgment interest;
• $1,035,167.62 for future loss of income;
• $222,549.36 for future cost of care;
• Costs of $1,104,859.88 and disbursements of $192,845.36 of which Mr. Paterson was to pay two-thirds and Security National one-third; and
• Security National was to pay the respondent any shortfall in the damages not paid by Mr. Paterson up to $1,000,000.

[15] Either or both of the appellants take issue with: (i) the procedure the trial judge utilized to assist in itemizing elements of the award; (ii) specific components of, or omissions from, the award relating to past and future income loss, housekeeping expenses, disability income benefits, business expenses, and contingencies; (iii) costs; and (iv) other incidental parts of the award.

(1) Procedural Issue

[16] After awarding the respondent $250,000 in general damages, an award that is not a subject matter of this appeal, the trial judge addressed past and future loss of income, out-of-pocket expenditures, and cost of future care. He then wrote that he was assuming that based on his determinations, these claims could be quantified and agreed upon. To the extent there was remaining uncertainty about the resulting awards, he could be spoken to.

[17] The respondent sought clarification on the trial judge’s pre-collision earning capacity finding and Mr. Paterson advanced arguments on housekeeping costs, contingencies, and a further deduction from the trial judge’s future care costs award. The trial judge advised counsel that he would not be making any changes to his decision. The parties could not agree on the precise amounts ordered. The respondent’s counsel wrote to the trial judge advising that they had a report from the respondent’s accounting expert, Chris Milburn, who had testified at trial and asked whether the report should be provided. The Security National appellant objected to any new evidence. The trial judge agreed with Security National’s objection and advised that no new evidence should be provided. He also requested draft judgments from the parties.

[18] This resulted in an email from the respondent’s counsel enclosing a draft judgment and supporting calculations; correspondence from Mr. Paterson’s counsel enclosing a draft judgment and submissions on pre-collision earning capacity and the housekeeping award; correspondence from the Security National appellant submitting that a 15% contingency reduction should be applied to the lost income and housekeeping awards; reply correspondence from the respondent; and sur-reply correspondence from both appellants.

[19] Before us, Mr. Paterson submits that the trial judge accepted new evidence from Mr. Milburn which included actuarial calculations for future housekeeping. He complains that he had no opportunity to cross-examine Mr. Milburn or to reply to this evidence. He asserts that this was procedurally unfair.

[20] We reject this submission. No objection was taken to the procedure that was used. Consistent with his direction, there was no new evidence relied upon by the trial judge nor did Mr. Paterson ever make a request to cross-examine Mr. Milburn or to file any evidence in reply. Moreover, although the appellants object to the housekeeping award, the amounts included in the final judgment were all calculable from the trial judge’s reasons and the evidence he referred to in his reasons, and no one suggests that the calculations are in error.

(2) Components of the Award

(i) Past and Future Income Loss Award

[21] The appellants submit that the trial judge erred in his income loss calculations.

[22] To address this issue, it is helpful to review the chain of events.

[23] In his reasons for judgment dated May 16, 2022, the trial judge noted at para. 30 that in her most successful years, the respondent generated approximately $250,000 in gross revenue from which various expenses and taxes had to be deducted. In 2008, in planning to assume a new job, she divested clients and cases from her practice. Ultimately, she decided not to take on the new position and had to build back her practice. In addition, in 2009 or 2010, one of her important clients decided to take its work in-house. Nonetheless, she testified that as of 2012 (the year of the collision), she was successfully rebuilding her practice and it was on an upswing.

[24] In discussing past and future loss of income, the trial judge noted that both parties had led expert evidence on these claims and “[a]s is typical in cases involving experts’ competing calculations of loss of income, the differences between the parties’ positions on this issue are largely driven by the experts’ respective assumptions about the various parameters and elements of these calculations.” He then reviewed the opinion of Mr. Paterson’s expert, Mr. Soriano, who estimated the respondent’s pre-collision gross earning capacity as between $132,362 and $155,958, both in 2020 dollars, the distinction reflecting the loss of a key client and offloading of work in the 2010-2011 timeframe in contrast to the relatively high income year in 2009.

[25] The trial judge then addressed the evidence of the respondent’s expert, Mr. Milburn. He was of the view that Mr. Soriano had understated the respondent’s likely earnings, as the respondent was transitioning into work that reduced her previous fairly extensive pro bono work and there was explosive growth in the respondent’s practice area. He opined that it would be reasonable to assume that the respondent would complete more work and have a higher billing rate in the post-collision timeframe. Mr. Milburn proposed a range of $147,500 (at the low end) to $248,500 (at the high end). This was in 2022 dollars.

[26] The trial judge rejected Mr. Soriano’s approach and accepted that the respondent’s earnings were trending upward. He considered it likely, however, that the respondent would have continued to devote a substantial component of her practice to pro bono work. He closed his analysis of this issue by stating:

Taking into account all of these factors, I find that a reasonable assessment of Ms. Sanson’s pre-[c]ollision earning capacity is $210,000 per year as of the date of the [c]ollision, adjusted for inflation for the years from 2013 to the date of trial at the rate of 2.0% per annum. This figure is just above the mid-point of Mr. Milburn’s range. While such determinations are by their nature imprecise, in my view this is a fair estimate for Ms. Sanson’s likely pre-[c]ollision capacity.

[27] On being apprised of some confusion relating to his finding on the respondent’s pre-collision earning capacity of $210,000, the trial judge acknowledged the confusion created by his reasons but confirmed that his intention was that the $210,000 figure was to apply from the date of the collision and then was to be adjusted for inflation going forward from that point. He noted that the respondent’s highest earning years before the collision saw her earn in the vicinity of $250,000 in gross income, she was on an upward trajectory, and his finding was well supported by the overall evidence before him.

[28] The trial judge based his past and future income loss award on the respondent earning $210,000 in 2012 dollars (the time of the accident). Mr. Paterson submits that $210,000 in 2012 is equivalent to about $267,680.01 in 2022 dollars, an annual increase of $57,680.01, and Mr. Milburn’s highest pre-collision earning capacity award of $248,500 in 2022 would have been equivalent to roughly $194,952.92 in 2012. He argues that the amount awarded by the trial judge was more than what the respondent had sought at trial, inconsistent with the trial judge’s reasons, and unsupported by the evidence.

[29] The respondent submits that the trial judge’s finding on the respondent’s earning capacity per year as of the date of the collision was correct. The respondent accepts that the trial judge was incorrect when he stated that the $210,000 figure was just above the mid-point of the range proposed by the respondent’s economic loss expert, Mr. Milburn. However, she argues that this finding was open to him on the evidence as the trial judge confirmed in his subsequent August 11, 2022 endorsement on the form of the judgment and costs. The respondent was in her prime income earning years, her law practice was trending upwards, and her practice area in which she was an established expert was experiencing an industry-wide boom. Furthermore, the Milburn range was not a cap and the trial judge’s award was not significantly different from the figure proposed by the respondent at trial.

[30] In our view, the trial judge erred in his past and future loss of income award. We reach this conclusion for the following reasons. First, at trial, the respondent had sought $248,500 in 2022 dollars for her pre-collision earning capacity. This was consistent with the figures used by Mr. Milburn which were in 2022 dollars, a feature overlooked by the trial judge. To be precise, in her closing submissions, the respondent stated:

It is submitted on behalf of the plaintiff that the most appropriate figure for the Court to use to reflect Ms. Sanson’s pre-collision earning capacity is the high end of the range determined by Milburn, or $248,500 in 2022 dollars.

[31] The trial judge awarded $210,000 in 2012 dollars, adjusted for inflation. However, even the respondent acknowledges that this amount is in excess of the amount she had sought.

[32] Second, in his May 16, 2022 reasons, the trial judge stated that $210,000 in 2012 dollars adjusted for inflation at 2% was just above the mid-point of Mr. Milburn’s calculations. However, Mr. Milburn’s evidence and demonstrative aid clearly show that his range of $147,700 to $248,500 was “in 2022 dollars”. Inflation was already built into Mr. Milburn’s figures.

[33] Third, the trial judge’s earning capacity determination was not, as he indicated in his August 11, 2022 reasons, “well-supported by the overall evidence”. The evidence the trial judge relied upon to justify his subsequent conclusion was that the respondent’s highest earning years, saw her earn, in gross income, amounts in the vicinity of $250,000. There were two palpable and overriding errors in his August 11, 2022 endorsement. First, the $250,000 figure represented the law firm’s gross revenue, not the respondent’s gross income. Second, there was only one year in which the respondent’s gross income exceeded $200,000 and that was in 2009 when her gross income was $207,000 and her law firm’s gross revenue was $252,859.

[34] Lastly, it is clear from the trial judge’s detailed May 16, 2022 reasons that his analysis centred on the expert evidence, which, as noted above, did not support an award of $210,000 in 2012 dollars.

[35] In essence, the trial judge erred in relying on the 2022 estimates in Mr. Milburn’s evidence and treating them as 2012 figures in his loss of income calculations. This was a palpable and overriding error. The figure of $210,000 using 2022 dollars is just above the mid-point of Mr. Milburn’s range, within the range sought by the respondent at trial, and in keeping with the other evidence on the respondent’s pre-collision earning capacity. We therefore allow the appellants’ appeal on this issue. We see no reason to order a trial of this issue. The judgment as it relates to the income loss award should be varied to adjust the $210,000 earning capacity figure to 2022 dollars rather than 2012 dollars. The trial judge noted in his reasons that the parties agreed that:

[P]ursuant to the Insurance Act, R.S.O. 1990, c. I.8, past loss is calculated starting seven days following the date of the accident in issue, at a rate of 70% of gross income lost during that period, less deductible collateral benefits.

In the case of future losses, such losses are calculated at 100% of gross income from the date of trial to the retirement date … In the case of future earnings, no reduction is imposed by the Insurance Act, and no collateral benefits are to be deducted.

[36] The judgment relating to past and future income loss is to be amended to comply with the statute, the parties’ agreement and our adjustment. The parties are to cooperate on the appropriate mathematical calculations to be incorporated into the varied judgment.

(ii) Future Care and Housekeeping

[37] The appellants also take issue with the trial judge’s treatment of the future care award and more specifically, the housekeeping costs. The Paterson appellant submits that accurate costing and actuarial evidence was required to provide the necessary arithmetic calculation; there was no physician or medical evidence to support the future housekeeping award of $118,194 to age 80. Both appellants challenge the evidentiary foundation for the award.

[38] We disagree with these submissions.

[39] First, while actuarial evidence may be persuasive evidence that a court may consider along with other evidence, it is not an absolute requirement. See for example, Tanner v. Board of School Trustees of School District No. 57 (Prince George), [1976] 5 W.W.R. 240 (B.C.C.A.), at para. 30.

[40] Second, the only future care costs awarded by the trial judge were for prescription medications and housekeeping. The former is not seriously challenged by the appellants and there was evidence to support the housekeeping award. This included extensive medical evidence on the respondent’s impaired condition; testimony from the respondent and her life partner on the respondent’s need for assistance; and evidence from an occupational therapist, a speech-language pathologist, and the family physician, Dr. Ouchterlony, who has extensive experience in the field of brain injury. In addition, the respondent tendered recent invoices for actual housekeeping costs. We would not give effect to this ground of appeal.

(iii) Deductions of Benefits

[41] Next, the appellants submit that the trial judge erred by not deducting or discounting the cost of future care award by $19,539.37 for disability income benefits.

[42] In his May 16, 2022 reasons, the trial judge addressed out-of-pocket expenditures and noted that those amounts were offset by amounts that had been paid out to the respondent by her accident benefits insurer or by her life partner’s insurer through a spousal benefits plan. He stated that the total amount that the respondent had received from those sources totalled just over $60,000 and that this offset would eclipse the total claims he had allowed.

[43] Subsequently, the appellants sought to reduce the future care costs by “the difference between the $60,000 credit and the total out-of-pockets”. The trial judge noted that it appeared that the $60,000 was already deducted from the out-of-pocket expenses claimed by the respondent and in any event, he had received no such argument from the appellants at trial.

[44] We see no reason to interfere with the trial judge’s reasoning in this regard.

[45] The appellants also submit that the trial judge erred in not deducting from the respondent’s past loss of income award the respondent’s business expense benefits of $60,000 received from Manulife. They submit that these were payments received by or available to the respondent for income loss or loss of earning capacity under an income continuation benefit plan within the meaning of s. 267.8 of the Insurance Act, R.S.O. 1990, c. I.8.

[46] Section 267.8(1) of the Insurance Act states:

In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:

2. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.

[47] The trial judge did not err in declining to deduct the respondent’s business expense benefits of $60,000 from the award for past loss of income. These benefits did not amount to an “income continuation benefit plan”. They did not represent any income replacement and the trial judge properly concluded that the benefits were not based on pre-collision income.

[48] We dismiss this ground of appeal.

(iv) Contingencies

[49] Both appellants submit that the trial judge erred in failing to apply contingency deductions to the future economic loss and future care awards.

[50] At trial, the appellants did not ask for the application of contingencies. It was raised for the first time in Security National’s correspondence of June 22, 2022. In these circumstances, it was open to the trial judge to refuse Security National’s request. Furthermore, it is not an error to decline to adjust for general contingencies: Butler v. Royal Victoria Hospital, 2018 ONCA 409, at para. 11. As for specific contingencies, the trial judge addressed the alleged decline of the respondent’s pre-accident practice, her pro bono work, her participation in continuing legal education and her attempts to return to work. Mr. Milburn testified that he considered contingencies but decided not to apply any. He was not cross-examined on this evidence. There was no evidence from Mr. Soriano on contingencies.

[51] In the absence of any request for contingencies and given the state of the evidentiary record, the trial judge did not err in failing to apply any contingencies.

(3) Costs

[52] The award in favour of the respondent significantly exceeded any Rule 49 offer made prior to trial. Accordingly, the trial judge awarded the respondent partial indemnity costs up to and including February 14, 2019 and substantial indemnity costs thereafter. He ordered Mr. Paterson to pay two thirds of the costs and the Security National appellant to pay one third.

[53] The appellants submit that the trial judge erred in his costs disposition. Mr. Paterson argues that on May 16, 2022, when the trial judge determined that the respondent was entitled to costs, he was unaware whether the damages award would exceed the respondent’s settlement proposal and this was procedurally unfair. There is no merit to this argument. The trial judge expressly stated that he was “of course unaware whether there have been any relevant offers to settle that may impact” his assessment of costs and then sought submissions on costs.

[54] The Security National appellant takes issue with the order against Security National of one third of the costs in part on a substantial indemnity scale due to the respondent’s offer to settle. Before this panel, relying on Jungwirth v. Robertson, 2011 ONSC 3021, the Security National appellant submits that an under insurer does not have to contribute costs where the primary insurer has not offered its policy limits. It submits that Mr. Paterson could have resolved the case within his policy limits.

[55] We disagree. As stated by Goudge J.A. in this court’s decision in Burns v. Hedge (2001), 146 O.A.C. 333 (C.A.), at paras. 43-44, there is no need for a primary insurer to tender its policy limits to warrant a costs award against an under insurer. Maximum flexibility is afforded the trial judge in such circumstances. We would not interfere with the trial judge’s discretionary order.

(4) Other

(i) Subrogation

[56] Mr. Paterson has a $1 million liability policy and the respondent has a $2 million policy with the Security National appellant.

[57] The Security National appellant submits that the trial judge improperly refused its request for subrogation.

[58] The issue of subrogation was only raised by the Security National appellant in correspondence sent to the trial judge on June 21, 2022 and was not the subject matter of submissions. Given the late request, it was open to the trial judge to decline the request. We make no determination of whether such an order would be available from the Superior Court on proper notice and materials.

(ii) Sufficiency of Reasons and Weighing of the Evidence

[59] Lastly, Mr. Paterson submits that the trial judge’s reasons were insufficient. Relatedly, the Security National appellant submits that the trial judge erred in his weighing of the evidence.

[60] We disagree. In his reasons of May 16, 2022, which were 469 paragraphs in length, the trial judge carefully reviewed all of the evidence and gave his rationale for why and how he found as he did. With the exception of the income loss calculation, we have upheld all of the many findings challenged by the appellants. There is no basis for an argument based on insufficiency of reasons and it is not for this court to reweigh the evidence. We decline to give effect to these grounds of appeal.

Disposition

[61] For these reasons, we dismiss the appeal with the exception of the appeal of the past and future loss of income award, which we allow. If the parties are unable to agree on costs, they are to make written submissions (not to exceed 5 pages in length), the respondent’s to be filed by December 11, 2023 and the appellants’ by December 18, 2023. In the event that the partial allowance of the appeal affects the impact of the respondent’s settlement offer, written submissions should address that issue as well.

“Doherty J.A.”

“S.E. Pepall J.A.”

“B. Zarnett J.A.”