ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 09-CV-43686
DATE: 20150826
BETWEEN:
KOSSAY EL-KHODR
Plaintiff
– and –
RAYMOND LACKIE, JOHN MCPHAIL, ATS ANDLAUER TRANSPORTATION SERVICES GP INC., and TRAILCON LEASING INC.
Defendants
Joseph Y. Obagi/Elizabeth A. Quigley, for the Plaintiff
Barry A. Percival Q.C., for the Defendants
HEARD: By Written Submissions dated August 13 and 14, 2015
SUPPLEMENTARY REASONS WITH RESPECT TO
ASSIGNMENT OF BENEFITS AND COSTS
Toscano Roccamo J.
[1] Subsequent to my Reasons in relation to various issues including the application of the trust and assignment provisions of the Insurance Act, R.S.O. 1990, c. I.8, and costs (El-Khodr v. Lackie, 2015 ONSC 4766, [2015] O.J. No. 4037), the parties filed additional written submissions which I now consider in arriving at a final decision on these matters.
Assignment of Benefits
[2] In evaluating the strength of the parties’ respective Offers to Settle exchanged mid-trial in or about April 15 and 17, 2015, the Defendants draw my attention to the monetary significance of assignment or non-assignment of future Statutory Accident Benefits. The Defendants note, as an example, that if the Plaintiff is paid income replacement benefits to age 64, the present value of future benefits is in the order of $250,000. Similarly, the Defendants submit that the present value of future housekeeping benefits is $133,000, future attendant care benefits is approximately $985,000 and future medical and rehabilitation benefits including medication is approximately $750,000. Therefore, the Defendants argue that, if an order is made providing for the assignment of accident benefits, their last Offer exceeded the jury’s verdict while the Plaintiff’s last Offer well exceeded the verdict.
[3] The Defendants have incorrectly concluded that I decided the Defendants are entitled to an assignment of future Statutory Accident Benefits in the amounts noted. I specifically made my decision subject to the receipt of reply submissions from the Plaintiff. My Reasons dated July 28, 2015, simply offered direction for the assignment of benefits based upon my own consideration of the evidence received at trial. It was my hope that the parties might thereby arrive at some agreement; a hope clearly held in vain. I refer the Defendants to my Reasons in El-Khodr v. Lackie, at paras. 81 and 82.
[4] I remind the parties that I was not the trier of fact; the jury was. Furthermore, while I offered the parties specific language for the Verdict Sheet, in the form I attach as an Appendix to these Reasons, the parties did not adopt the language that I proposed. Accordingly, the jury was left with a Verdict Sheet that did not require them to specify awards for Statutory Accident Benefits under the sub-headings I had proposed under Future Professional Services and Future Medication and Assistive Devices; including professional services such as physiotherapy and psychology, and medication costs.
[5] As a result of the jury’s global awards of $424,550 for Future Professional Services, and $82,429 for Future Medication and Assistive Devices, the Defendants are now unable to meet their onus to demonstrate that the jury award compensated the Plaintiff for the same loss in respect of which the Defendants now claim an assignment of benefits.
[6] The case law concerning the trust and assignment provisions of the Insurance Act requires me to ensure the prevention of double recovery by a plaintiff. This requirement must be balanced against a plaintiff’s entitlement to receive full compensation; that is, by not being subjected unfairly to deductions based on uncertainty and speculation. I adopt the reasoning of Leach, J. in Gilbert v. South, 2014 ONSC 3485, 120 O.R. (3d) 703, at para. 9 where she found herself similarly bound by the very strict onus of proof applied to defendants in these cases:
However, concern to ensure mandated prevention of such double-recovery is balanced by concern that a plaintiff should receive full compensation and not recover less than that to which he or she is entitled; i.e., by being subjected unfairly to deductions based on collateral benefit entitlements that are in doubt and/or which may not truly overlap with sums recovered in a tort judgment. Statutory provisions of this nature therefore are strictly interpreted and applied. In particular: deductions from a plaintiff’s damage award to prevent double recovery will be made only if it is absolutely clear that the plaintiff’s entitlement to such collateral benefits is certain, and that the plaintiff received compensation for the same benefits in the tort judgment, (as “apples should be deducted from apples, and oranges from oranges”). Evidence of “likelihood” and “probability” in that regard is not enough to warrant a deduction. Rather, a “very strict onus of proof” applies in relation to such matters, and it must be “patently clear” that the preconditions for an appropriate deduction have been established. If there is uncertainty as to a plaintiff’s receipt of such benefits, the value of the benefits entitlement, and/or the extent (if any) to which recovered tort damages relate to the same type of expense covered by the benefits received, matters are not “beyond dispute” in the sense required for a deduction, and no deduction should be made. See Chrappa v. Ohm (1998), 1998 893 (ON CA), 38 O.R. (3d) 651 (C.A.), at p.657; Bannon v. Hagerman Estate (1998), 1998 4486 (ON CA), 38 O.R. (3d) 659 (C.A.), at p.679; Cowles v. Balac, 2005 2038 (ON SC), [2005] O.J. No. 229 (S.C.J.), at paragraph 205, affirmed 2006 34916 (ON CA), [2006] O.J. No. 4177 (C.A.); Moore v. Cote, [2008] O.J. No. 3541 (S.C.J.), at paragraph 9; and Hoang v. Vicentini, supra, at paragraphs 27-28, 36 and 45.
[7] In respect of the jury’s award in the amount of $395,593 for Future Loss of Income, the Defendants admit that the award provides no detail with respect to what retirement age the jury utilized to arrive at their award. The Defendants now speculate that the jury may have used a retirement age of 64. The Plaintiff correctly points out that the jury received evidence on the basis of which it could have awarded future income loss using a retirement age as low as 60. Ultimately, the Defendants could have required the jury to outline the period of time for which the loss of income was calculated in order to justify the assignment of income replacement benefits they now seek.
[8] To ensure the Plaintiff’s entitlement to full compensation is not jeopardized by any speculation on my part with respect to retirement age, I am left with no choice but to find that the Defendants are entitled to an assignment of income replacement benefits under the Statutory Accidents Benefits to December 31, 2019, based on a retirement age of 60, at which time the assignment reverts to the Plaintiff.
[9] The Plaintiff does not dispute the Defendants’ claim for an assignment of future attendant care benefits; however, due to an outstanding dispute between the Plaintiff and the Accident Benefits Insurer, Royal Sun Alliance (RSA), in respect of past attendant care benefits, the past benefits must be paid in priority to future benefits.
[10] The Plaintiff does not dispute an assignment of benefits for housekeeping and home maintenance up to $133,000 at which point the benefits shall revert to the Plaintiff.
[11] As such, an order shall issue in the form set out at Tab 6 of the Plaintiff’s latest submissions in respect of the assignment of benefits.
Costs
[12] The Defendants submit that when one considers the Offers to Settle said to have been exchanged by the parties orally and in writing on April 15 and 17, 2015, after the commencement of trial; and the effect of assignment or non-assignment of future Statutory Accident Benefits, the Plaintiff’s Offer to Settle of $3.2 million dollars plus costs and disbursements is far in excess of the jury’s net verdict of $2.85 million plus costs and disbursements, as compared to the Defendants’ Offer to Settle of $2 million dollars all inclusive, with no assignment of future Statutory Accident Benefits.
[13] I have already found that the Defendants’ failure to require the jury to break down their awards for Future Professional Services, and Future Medications and Assistive Devices prevents me from determining the appropriate application of the trust and assignment provisions in question. I have also found that the Defendants have failed to satisfy me that the Plaintiff would receive full compensation for his losses if I accede to the arguments made by the Defendants. Finally, with respect to any accident benefits which the Plaintiff may subsequently recover in an arbitral award for medical and rehabilitation claims advanced against RSA, I echo the reasons of Justice Wilson in Hoang v. Vincentini, 2014 ONSC 5893, 40 C.C.L.I. (5th) 231, at para. 50 where she aptly concluded: “It would be inappropriate to speculate on what might transpire in the future concerning the accident benefits”.
[14] In arriving at the sum fixed for the award of partial indemnity costs herein, I have considered “in a holistic fashion” the Offers to Settle exchanged by the parties after the commencement of trial, as required by rule 49.13: see Lawson v. Viersen, 2012 ONCA 25, 108 O.R. (3d) 771 at para. 46 and Elbakhiet v. Palmer, 2014 ONCA 544, 121 O.R. (3d) 616, at para. 33. Given the limitations imposed by the global awards made by the jury with respect to certain heads of damages and having regard to the conduct of the proceeding by or on behalf of the Plaintiff, I am unable, on any principled basis, to conclude that the investment in services performed by both counsel for the Plaintiff including their attendance at trial was excessive or disproportionate to the nature of claims advanced.
[15] In short, the further consideration of Offers exchanged by the parties after commencement of the trial, as required by rule 49.13, does not persuade me to exercise my discretion to substantially reduce the Plaintiff’s claim for costs on a partial indemnity basis.
[16] The Defendants challenge the hourly rates based on the experience of counsel for the Plaintiff, and of Mr. Obagi’s hourly rates in particular. The additional calculations furnished by the Plaintiff to more precisely apply the partial indemnity costs grid with the necessary adjustments for inflation, result in a de minimus increase in favour of the Plaintiff from $364,073.87 to $367,621.30 per the Revised Bill of Costs enclosed with the Plaintiff’s latest submissions.
[17] Similarly, the Defendants’ challenge to the Plaintiff’s claim for costs, based on a GST/HST differential, results in a de minimus downward adjustment on the amount claimed by the Plaintiff from $47,329.60 to $46,257.58.
[18] In my opinion, the arguments made by the Defendants in respect of hourly rates and applicable taxes resulted in the very kind of “bean counting” I discouraged at para. 113 of my Reasons of July 28, 2015, when guided by the Court of Appeal’s dicta in Boucher v. Public Accountants Council (Ontario), (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 at para. 26.
[19] At para. 123 of my Reasons of July 28, 2015, I rejected the Defendants’ arguments regarding disbursements for a physician’s report. The same reasoning applies to the report of Dr. Kevin Smith, whose attendance, like that of a number of other physicians, was not required due to the impact of the Court of Appeal’s decision in Westerhof v. Gee Estate, 2015 ONCA 206, 124 O.R. (3d) 721. I, therefore, allow this disbursement.
[20] I maintain the conclusions I expressed in my Reasons of July 28, 2015, with respect to all other cost concerns previously raised by the parties.
[21] In conclusion, after further consideration of the factors listed in rule 57.01, in the exercise of my discretion under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, I make a modest reduction for some duplication of effort in the hours expended by counsel for the Plaintiff and I fix costs on a partial indemnity basis in favour of the Plaintiff at $350,000. In doing so, I have particular regard for the application of the principle of indemnity, the amounts claimed and recovered by the Plaintiff in the proceeding, the conduct of the Defendants that unnecessarily lengthened the duration of the trial, and the Defendants’ refusal to admit liability and causation when the evidence on these issues was heavily stacked in favour of the Plaintiff. I find that these last two factors, coupled with the burden upon the Plaintiff to prove a significant case of chronic pain, with both physical and psychological features, would have resulted in a substantial investment of time and effort on behalf of the Plaintiff, well above the substantial indemnity costs of $211,595 including the fees of only one counsel at trial on behalf of the Defendants. As such, I have given due regard to rule 57.01(1)(0.b) and the costs that an unsuccessful party could reasonably expect to pay in the proceeding.
[22] Finally, given the time and effort expended on the Plaintiff’s behalf to address costs concerns raised by the Defendants which resulted in no material adjustment to the award of costs herein, I allow the Plaintiff $5,000 for preparation of the written submission on costs.
[23] Over and above the award of fees on a partial indemnity basis, I allow GST and HST using the approach most recently applied by the Plaintiff, as well as the disbursements awarded by these Reasons, and permissible under the Tariff.
Madam Justice Toscano Roccamo
Released: August 26, 2015
Appendix
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KOSSAY EL-KHODR
Plaintiff
- and -
RAYMOND C. LACKIE, JOHN MCPHAIL, ATS AND LAUER TRANSPORTATION SERVICES GP INC., and TRAILCON LEASING INC.
Defendants
Verdict Sheet
- Has the Plaintiff proven, on a balance of probabilities, that the car accident of January 9, 2007 caused Kossay El-Khodr to suffer the following?
(a) Concussion
YES _____________ NO _____________
(b) Whiplash to the neck and back
YES _____________ NO _____________
(c) Injury to the right knee
YES _____________ NO _____________
(d) Mood Disorder and Depression
YES _____________ NO _____________
• State the grounds on which you make these findings:
- Having regard to the answers in Question 1, at what amount do you assess Kossay El-Khodr’s claim for:
(a) Special Damages for Net Loss of
Income to the Date of Trial
$___________
(b) General Damages for Pain and
Suffering and Loss of Enjoyment
of Life $___________
(c) Future Loss of Income,
or Loss of Earning Capacity $___________
(d) Future Care Costs
Type of Expense Annual Cost Age or Life Multiplier Total
(i) Attendant Care $__________ _____ X _______ = $__________
(ii) Psychotherapy $__________ _____ X _______ = $__________
(iii) Physiotherapy $__________ _____ X _______ = $__________
(iv) Housekeeping and
Home Maintenance $__________ _____ X _______ = $__________
(v) Medications $__________ _____ X _______ = $__________
(vi) Assistive Devices $__________ _____ X _______ = $__________
(vii) Massage Therapy $__________ _____ X _______ = $__________
(viii) Personal Training $__________ _____ X _______ = $__________
Did the Plaintiff fail to take reasonable precautions for his own safety in failing to properly utilize a seat belt, and thereby contribute to his own injuries? YES_________ NO _________
If the answer to question 3 is “Yes”, by what percentage should his damages be reduced by reason of such failure? ________% (0% to 25%)
COURT FILE NO.: 09-CV-43686
DATE: 201508126
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KOSSAY EL-KHODR
Plaintiff
– and –
RAYMOND LACKIE, JOHN MCPHAIL, ATS ANDLAUER TRANSPORTATION SERVICES GP INC., and TRAILCON LEASING INC.
Defendants
SUPPLEMENTARY REASONS WITH RESPECT TO ASSIGNMENT OF BENEFITS AND COSTS
Toscano Roccamo J.
Released: August 26, 2015