CITATION: Zhau v. 2100950 Ontario Inc. (Congee Queen), 2015 ONSC 1093

COURT FILE NO.: CV-08-00365213

DATE: 20150218

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Brian Zhau, a minor by his litigation guardian, Anthony Ngai, and Wendy Tan, Plaintiffs

AND:

2100950 Ontario Inc., operating as Congee Queen, Bayview Summit Development Ltd., and Wycliffe Property Management Limited, Cho Design Inc., Lonna Wai-Fong Cho, Joe Cho, Tran Dieu and Associates Inc., ISI Contracting Limited, Defendants

BEFORE: Justice Spies

COUNSEL: P. Michael Rotondo, for the Plaintiffs

Ramon V. Andal, for the Defendant Congee Queen

HEARD: In Writing

SUPPLEMENTARY ENDORSEMENT

[1] This supplementary endorsement follows up on my initial endorsement; Zhau v. 2100950 Ontario Inc. (Congee Queen), 2015 ONSC 785 released on February 3, 2015. There were a number of outstanding issues that I required assistance on before approving the proposed settlement of the claims of the minor plaintiff Brian Zhau (“Brian”). I am now in a position to deal with those issues and finalize this Court’s approval of that settlement.

[2] In my initial endorsement I gave reasons for why the proposed plan to pay out $125,000 of the settlement funds to Brian, when he turns 18, is not acceptable to this Court and why I ordered instead that a structured settlement in the amount of $110,000 be purchased for Brian through McKellar Structured Settlements (“McKellar”). I specified that the structure provide for payment of $15,000 per year for four years starting when Brian turns 18 with a lump sum of the remaining amount to be paid out at age 25 in accordance with an estimate provided by McKellar. However, I also stated that I was willing to receive views on other structures that might be preferable provided those views were received immediately. The structure needed to be finalized quickly as the annuity rates had already declined following the settlement and I was advised by McKellar that a further decline was imminent.

[3] Despite the very short timeframe, I was very pleased that Mr. Rotondo and his law clerk, and Mr. Andal, who orchestrated this on behalf of his client and the other defendants, and McKellar, were able to do the necessary work to put the requested structure in place in time before there was a further decline in rates. Accordingly, $110,000 of the settlement funds will be used to fund the structure that I proposed as I was not asked to consider any other options.

[4] In the supplementary affidavits information was also provided with respect to the query I made with regard to the relationship between Anthony Ngai, the litigation guardian, and Brian’s mother. I now understand that Mr. Ngai is a senior paralegal / paralegal advisor and that he has known Ms. Tan and Brian since Brian’s accident. He clearly was an appropriate choice given his friendship with the family and his legal background.

[5] As for the plaintiffs’ firm’s outstanding legal fees and disbursements, the supplementary affidavit of Mr. Rotondo sworn February 12, 2015 provided a list of the disbursements which amount to $14,408.78. Mr. Rotondo deposes that during the mediation process, to accommodate the settlement, his firm agreed to reduce the amount of the disbursements to $14,000.00. I have reviewed the list of disbursements and all are reasonable and, accordingly, shall be paid from the settlement funds.

[6] That leaves the legal fees of the firm. As requested I now have a copy of the contingency fee agreement dated March 26, 2010 signed by Mr. Ngai. It is apparently in the same form as the one signed by Brian’s mother at the start of the action although a copy of that agreement could not be found. While I needed to review this agreement as it is relevant to my determination of costs, this Court is not bound by the agreement which provides that the firm receive 30% of any settlement or recovery for its fees in addition to GST, costs and expenses as any retainer affecting a party under disability is subject to review by the Court. In this case, however, I understand that the agreement has not been relied upon to support the firm’s claim for fees.

[7] In his affidavit of February 12^th^, Mr. Rotondo set out an estimated list of services. It is estimated because unfortunately the firm did not keep dockets. He estimated his time on the file to be over 189 hours and his law clerks’ time to be at least 146 hours. The fees claimed are based on hourly rates found in the contingency agreement which provides that if the services of the firm are terminated by the litigation guardian that the firm will be paid for time spent to that point at the rate of $250 per hour for lawyers and $85 per hour for law clerks. This provision does not apply of course but does give evidence as to what the parties expected would be reasonable compensation for time spent only.

[8] The firm has asked for $58,268.83 in fees plus HST. This is the amount that was requested in the initial motion material and so the firm has not sought additional costs as a result of the work done to respond to my inquiries. Mr. Rotondo’s current hourly rate is in the range of $300-$350. He has over ten years’ of experience and, as I understand it, the firm specializes in personal injury. Mr. Rotondo used three different experienced law clerks and paralegals on this file and it appears they were used for matters that did not need to be handled by a lawyer. This, of course, reduced legal costs.

[9] As for the time spent, the action was started on October 29, 2008 very soon after Brian’s accident. The action required several motions including a summary judgment motion, as well as examinations for discovery and preparation and attendance at two mediations. In addition, a number of expert reports were obtained. The firm did take some risk of not being compensated for disbursements and its fees.

[10] Now that I have the requested information concerning the fees claimed, I am satisfied that the time spent by Mr. Rotondo and his law clerks and paralegals was reasonable and that it is justified. Assuming his hourly rate of $250 and $85 for his law clerks, which rates I find to be reasonable, the time spent justifies the fees claimed and does not include a premium. Accordingly, I approve of the fees plus HST as requested.

[11] The balance of the settlement funds of $18,391.61 shall be paid into Court to Brian’s credit and shall be paid to him when he turns 18. In the meantime this fund can be used, pursuant to an order of this Court, to pay for necessary expenses for Brian’s rehabilitation such as tutoring, which I highly recommend.

SPIES J.

Date: February 18, 2015