CITATION: Karamzadeh v. Pierre, 2010 ONSC 1319
DIVISIONAL COURT FILE NO.: DC-09-03
DATE: 20100409
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Cunningham A.C.J., Ferrier and Lederman JJ.
BETWEEN:
HEYDAR KARAMZADEH
Plaintiff/Appellant
– and –
KERTH PIERRE AND BERTRAM PIERRE
Defendants/Respondents
Paul Rosenblatt, for the Plaintiff/Appellant
Francis A. DeSantis and Andrew Kessmaat, for the Defendants/Respondents
HEARD at Hamilton: February 23, 2010
THE COURT
Nature of the Appeal
[1] In a personal injury trial before Flynn J. the jury returned a verdict in which it found that the plaintiff sustained "minor soft tissue injury to the neck area" and awarded him $15,000 in general damages as well as damages for past income loss of $17,500.
[2] While the jury had been deliberating, Flynn J. ruled on the threshold motion brought by the defendants and determined that the plaintiff's injuries did not constitute a permanent serious impairment of an important physical, mental or psychological function.
[3] Thus, the plaintiff was precluded from receiving the general damages award which in any case, he would not recover due to the statutory deduction of $15,000 under s. 267.5(7), 3(i) of the Insurance Act, R.S.O. 1990 c.I. 18.
[4] Furthermore the trial judge applied a 20% reduction to the past income loss award in accordance with s. 267.5(1)2 of the Insurance Act, thereby reducing that award from $17,250 to $14,016.
[5] The Trial Judge further reduced the amount for past income loss by deducting the income replacement benefits ("IRBs") of $14,211.20 received by the plaintiff, pursuant to s. 267.8(1) of the Insurance Act. As a result the jury award for past income loss was reduced to nil dollars.
[6] The Trial Judge found that as the defendants were completely successful they were entitled to costs and awarded them partial indemnity costs in the amount of $50,000.
[7] The plaintiff does not appeal or object to the trial judge's charge to the jury, the jury verdict, or the trial judge's ruling on the threshold motion dismissing the plaintiff's claim for general damages for pain and suffering. Nor does the plaintiff appeal or object to the trial judge's application of s. 267.5(1) of the Insurance Act reducing the jury award to 80% of net income.
[8] The plaintiff only appeals the trial judge's applying 267.8(1) of the Insurance Act by deducting the IRBs from the jury award thereby reducing the award to nil dollars and dismissing the plaintiff’s action.
[9] The plaintiff also appeals the costs order made against him.
Deduction for IRBs
[10] The plaintiff argues that his counsel and defence counsel at trial, both mentioned to the jury in their closing arguments, as did the trial judge in his charge, that IRBs ought to be subtracted from any award for past income loss.
[11] The plaintiff submits that the jury did just that and made an award of $17,520 net of IRB's paid to the plaintiff by the insurer. The plaintiff submits that Flynn J. erred in that he made a "double deduction" for IRBs received by the plaintiff after the jury had already made the appropriate deduction.
[12] The plaintiff states that this error resulted in the plaintiff's damages being reduced to nil which in turn was the determinative factor for the trial judge in awarding costs to the defendants.
[13] The plaintiff has not properly characterized what the trial judge said in his charge. In his charge the trial judge properly instructed the jury to assess the amount that the plaintiff might have earned from the date of the motor vehicle accident to the date of trial. The trial judge did make reference to counsel's submissions, but counsel for the plaintiff now acknowledges that the trial judge did not specifically direct the jury to make a deduction for IRBs that had been paid to the plaintiff; nor did he provide to the jury any formula to calculate past income loss.
[14] Although invited to make submissions concerning the charge, plaintiff’s counsel took no exception to it and made no suggestions concerning an instruction to the jury with respect IRBs.
[15] The fact that counsel may have referred to a deduction for IRBs does not mean that a jury has accepted it. Counsel's submissions are no more than argument. It is the trial judge's charge on the law, as instructions to the jury, that is paramount. Unless otherwise demonstrated, it is presumed that a jury returned a verdict based on the trial judge's instructions on the law.
[16] In the circumstances, there is nothing to indicate that the jury returned a verdict on past income loss for an amount that was net of deductions for IRBs.
[17] We see no error made by Flynn J. in deducting the IRB payments received by the plaintiff from the gross amount awarded by the jury. Accordingly, this ground of appeal must fail.
The Costs Order
[18] The plaintiff also appeals the trial judge's award of costs to the defendants but not the quantum of $50,000. that was fixed.
[19] At the conclusion of the trial the trial judge stated:
The defendants were completely successful and are entitled to their costs, which I will fix after considering the written submissions of the parties according to these directions.
[20] The trial judge then set time deadlines for delivery of a costs outline, any relevant offers to settle and any further submissions by counsel.
[21] Although the defendants submitted a costs outline, the plaintiff submitted nothing with respect to costs.
[22] In his Costs Endorsement awarding $50,000 to the defendants, Flynn J. stated that he "must take the plaintiff's absolute silence on the issue of costs as acquiescence – and admission from the losing party that the costs claimed are fair and reasonable".
[23] On appeal the plaintiff submitted that he did not take issue with the quantum of costs of $50,000 claimed by the defendants. He found the amount to be reasonable in the circumstances and that was the reason he made no written submissions as to costs. His silence on the issue of costs was only an acquiescence to the quantum of costs claimed not to the question of entitlement.
[24] His position is that Flynn J. had already decided the issue of entitlement by his statement at the close of trial (quoted above). The plaintiff took that to mean that the trial judge had already decided the issue of entitlement and only quantum was in issue. The plaintiff submits that given the trial judge's statement his decision as to entitlement was closed and the plaintiff’s only remedy lay in appealing the trial judge's costs order which he did in the Notice of Appeal.
[25] We note that the costs outline submitted by counsel for the defendants in effect acknowledged that the issue of their entitlement to costs had been already been determined and the only issue that remained was the scale and quantum of their costs. At para. 1 of their costs outline it is stated:
His Honour also ordered costs to the defendants. It is the submission of the defendants that they are entitled to their costs on a partial indemnity scale.
[26] We accept the plaintiff's interpretation of the trial judge's determination. It was reasonable for the plaintiff to believe that the question of entitlement had already been decided by the trial judge without hearing submissions from him on this issue. This was a breach of natural justice, as fairness required that counsel have the opportunity to be heard on the issue of costs before a decision is made.
[27] At the hearing of this appeal, the plaintiff argued that even if the deduction applied by Flynn J. is held to be justified, his conclusion that "the defendants were completely successful and are entitled to their costs" is flawed. The plaintiff contends that a trilogy of cases (Rider v. Dydyk (2007) ONCA 687; Ksiazek v. Newport Leasing (2008) 15771 (S.C.J.); Dennie v. Hamilton (2008) 5964 (S.C.J.)) is authority for the proposition that statutory deductions, including those for benefits received, as well as the threshold ruling are not to be taken into account in the context of a Rule 49.10 offer and costs entitlement.
[28] In this case, the defendants made a Rule 49 offer to settle for nil dollars with costs payable to the defendants. The plaintiff contends that in light of the total award granted to the plaintiff by the jury of $32,520 (namely $15,000 for general damages and $17,520 for loss of past income), before any ruling on the threshold or the deduction required under s. 267 of the Insurance Act, the defendants actually received a much less favourable result than their Rule 49 offer to settle and therefore the plaintiff argues that he is entitled to partial indemnity costs of the trial.
[29] The defendants, on this appeal have argued that the trilogy of cases dealt with circumstances where there was a comparison of competing Rule 49 offers of each party after the judgment at trial. No offer to settle was made by the plaintiff in the instant case and the defendants say that the case law does not apply. The defendants submit that in any event the Rider case is distinguishable in that it directs the court by the express provision in s. 267.5(9) of the Insurance Act not to deduct the statutory deductible of $15,000 when assessing costs in the action. The defendants also submit that Ksiazek, supra, did not extend this principle to the accident benefit deduction. Further, the defendants submit that the Dennie, supra, case insofar as it states that a court can ignore a threshold ruling dismissing a claim for general damages when assessing costs, was wrongly decided.
[30] These issues are being raised by the parties for the first time on appeal. Given the importance of this issue, it is best to have the question of deductibility of IRBs for cost purposes, and any other factors relating to entitlement of costs, determined by the trial judge in first instance on the basis of full and considered submissions rather than on appeal.
Conclusion
[31] In the result, the appeal is allowed in part and the issue of entitlement of costs is remitted back to the trial judge for argument and decision.
[32] Success was divided on the appeal. However, given the monetary importance of the costs issue upon which the plaintiff was successful on appeal, he will have his costs of the appeal on a reduced basis fixed at $5,000 payable by the respondents/defendants.
Cunningham A.C.J.
Ferrier J.
Lederman J.
Released: April 9, 2010
CITATION: Karamzadeh v. Pierre, 2010 ONSC 1319
DIVISIONAL COURT FILE NO.: DC-09-03
DATE: 20100409
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
HEYDAR KARAMZADEH
Plaintiff/Appellant
BETWEEN:
KERTH PIERRE AND BERTRAM PIERRE
Defendants/Respondents
REASONS FOR JUDGMENT
The Court
Released: April 9, 2010