ONTARIO
SUPERIOR COURT OF JUSTICE
PICTON COURT FILE NO.: 12-157
DATE: December 8, 2015
B E T W E E N:
JACQUELINE VICKERS, SCOTT KAPITAN and THE BLOOMFIELD CARRIAGE HOUSE RESTAURANT INC.
Edward V. Bergeron and Warren WhiteKnight, for the Plaintiffs
Plaintiffs
- and -
FERRANDO PALACIOUS and GWENDOLYN PALACIOUS
R. Steven Baldwin, for the Defendants
Defendants
HEARD: October 30, 2015
POST-VERDICT RULINGS
James J.
Introduction
[1] On October 29, 2015 the jury delivered its verdict in this action. As a result of the verdict, the parties have raised three issues that need to be addressed before the judgment can be finalized:
a) Has the plaintiff Jacqueline Vickers met the requirements of section 4.3 of O.Reg 461/96, as amended (the threshold issue)?
b) What is the appropriate deductible to be applied to the non-pecuniary damages? Is it $36,540 as specified by section 2 of O. Reg. 221/15 or $30,000 as specified by section 1 of O. Reg. 312/03, the predecessor provision which was replaced on August 1, 2015?
c) Should the applicable pre-judgment interest rate for the plaintiff’s non-pecuniary loss be calculated in accordance with section 128(1) of the Courts of Justice Act or as prescribed by rule 53.10 of the Rules of Civil Procedure?
The Threshold Issue
[2] The plaintiff Vickers was struck in the back by the passenger side mirror of a vehicle that was overtaking her as she rode a bicycle along the side of the road. The mirror was torn away from its mounting. The plaintiff’s bike helmet was cracked when she fell and struck her head. She was later diagnosed with a compression fracture of her T-11 vertebra.
[3] At trial she alleged that she was no longer able to pursue her career as a pastry chef and that she suffered from debilitating chronic pain.
[4] The defendants say that there is no evidence connecting the back injury to the accident and that the plaintiff’s evidence respecting the severity and duration of her pain is not credible. I disagree. The medical evidence suggested that it would take considerable force to cause the injuries that the plaintiff sustained and this force is consistent with the collision with the car. There was a complete absence of evidence that the plaintiff’s complaints predated the accident or that damage to her spine was caused by some other event. A common sense inference may be drawn that the injuries were related to the collision.
[5] On the issue of the plaintiff’s credibility, her evidence was generally consistent, her answers to questions were given in a direct and straightforward manner and she did not appear to me to be evasive. Also, where applicable, her testimony was corroborated by other witnesses.
[6] The plaintiff gave evidence respecting how her injuries arising from the accident had impacted her life, including recreational activities such as running and cycling as well as her inability to perform the physical activities associated with her work as a pastry chef. The evidence of the plaintiff and other witnesses described the carrying, mixing and bending demands of her work and how, in the weeks and months following the accident, the plaintiff attempted unsuccessfully to accommodate her limitations with frequent rests, assistance from others and assistive devices.
[7] In addition, the plaintiff adduced evidence from Stephen Bagg, a medical doctor specializing in physical medicine and rehabilitation. He said that in his opinion the plaintiff suffered from chronic pain related to the collision and that her functional abilities including bending and lifting her arms beyond a certain height were reduced by the onset of pain. He also said that the plaintiff’s injuries will interfere with heavy housekeeping duties, gardening and tasks that required repetitive movements. He thought that her recovery had reached a plateau and that it was unlikely her symptoms would ever disappear.
[8] In summary, there was adequate, acceptable evidence to determine that the plaintiff sustained a permanent serious impairment of an important physical function as required by section 267.5 of the Insurance Act and I find that the threshold requirements of the legislation have been met.
The Deductible Issue
[9] On August 1, 2015 the statutory deductible applicable to damages for non-pecuniary loss was increased from $30,000 to $36,540. The $30,000 deductible was established in 2003 for “incidents that occur on or after October 1, 2003.”
[10] The new provision does not contain a specified date upon which the increased deductible is to come into effect. The plaintiff says that the statutory deductible is a matter of substantive, rather than procedural, law and therefore it should not be applied retrospectively. The defendants say that the plaintiff’s damages are determined as of the date of trial and are reflective of 2015 dollars. Similarly, the deductible should be indicative of 2015 dollars and therefore the higher deductible is appropriate.
[11] In Somers v. Fournier 2002 45001 (ON CA), [2002] O.J. No. 2543 (C.A.), one of the issues under appeal related to the proper characterization of the cap on non-pecuniary damages arising from the so-called trilogy of decisions from the 1970’s where the Supreme Court of Canada approved a uniform limit or cap on general damages in personal injury cases. The discussion of the cap in the Court of Appeal in Somers was in the context of conflict of laws issues, namely, whether the substantive law of the State of New York should apply to an action brought in Ontario. In these situations the law provides that the substantive law of the place where the wrong occurred should apply whereas the procedural law of the place of trial governs procedural issues. Cronk J.A. agreed with the trial judge that the cap on damages was procedural in nature and therefore the plaintiff would be subject to the cap imposed by Canadian law although under the law of the State of New York, a similar cap did not exist. The court considered the policy reasons for the cap and differentiated between entitlement to damages and the quantification of damages in the conflict of laws context. Entitlement was said to be substantive; quantification was said to be procedural (para. 51).
[12] Turning now to the characterization of the deductible as substantive or procedural law, my view is the same factors considered by Cronk J.A. in Somers apply to the deductible issue. Cronk J.A. looked to the policy considerations that prompted the Supreme Court of Canada to articulate a limit on damages and concluded that it was the presence of policy considerations that favoured the characterization of the cap as a matter of procedural law. Similarly, the deductible can be seen as the result of the policies underlying the restructuring of the automobile insurance regime from a fault-based system to the current hybrid model. With the advent of no fault benefits for injured plaintiffs, one of the trade-offs was that tort liability only attached in the case of serious and permanent injuries and that damages below a certain level should be subject to a significant deductible.
[13] Both the cap on damages and the statutory deductible were implemented to achieve particular policy objectives. Viewed in this light, the statutory deductible can be seen as a measuring or quantifying device (procedural) as opposed to the availability of a particular head of damage (substantive).
[14] There is another reason why I am inclined to find that the larger, newer deductible applies to this case. When implementing the $30,000 deductible in 2003, the legislature stipulated that it was to apply “in respect of incidents that occur on or after October 1, 2003.”A similar provision was left out of the replacement provision contained in O. Reg. 221/15. This suggests to me that the legislature intended that the new deductible should apply to all pending cases regardless of when the incident occurred. Also, if the legislature intended to exempt existing lawsuits from the new deductible, why would it specify a deductible that is applicable for the calendar year 2015 only? Under the view urged by the plaintiffs, the new deductible should only apply to lawsuits started after August 1, 2015. Virtually none of these lawsuits would be brought to a conclusion in 2015 so why would the legislature bother to specify a deductible to be in effect until December 31, 2015 for cases started on or after August 2, 2015? Recall that the new deductible regime goes on to adjust the deductible in 2016 and subsequent years by providing a formula. The manner in which the provision (now section 5.1(1) of O. Reg. 461/96, as amended) was drafted discloses an intention that it apply to all pending proceedings, including this one.
[15] Counsel for the plaintiffs has brought to my attention the decision of Belch J. in Cobb v. Long Estate, 2015 ONSC 6799 which was released while the present case was on reserve. There the plaintiff argued that the court ought to follow the decision of Toscano-Roccamo J in El-Khodr v Lackie 2015 ONSC 4766 “which set the deductible at $30,000.” (para. 13). On my reading of El-Khodr, the court focused on other issues. There is no direct reference in El-Khodr to the question of which deductible ought to apply. Also, it is worth noting that El-Khodr was decided before the regulation containing the new deductible came into effect so it is difficult to see how the new deductible could have been an issue in that case.
[16] There was no evidence before me as to relationship between the setting of premiums and the amount of the statutory deductible so as to create a windfall for insurers if the higher deductible amount applies. This argument appears to have been a factor that Belch J. found persuasive (see para. 16). To the extent that Belch J. concluded that the statutory deductible is a matter of substantive law and that the higher deductible should not apply to existing actions, I respectfully disagree.
[17] I do not find support for the argument that the statutory deductible is substantive rather than procedural in the two appeal cases cited in Cobb, being Wong[1] and Somers. Both cases deal with conflict of laws issues. Wong was decided on the basis that “the general choice of law rule” ought to be applied (para. 22) and I would distinguish Wong from the present case on grounds that the oblique reference to the deductible issue in Wong was obiter (see paras. 19-21). As previously indicated, in my view Somers provides support for the proposition that the statutory deductible is procedural.
[18] To summarize, I find the legislative intention to be clear; the revised deductible is to apply to all pending actions. The plaintiffs did not have vested legal rights that were interfered with; they had a claim that had not gone to trial and in respect of which there had been no award or other disposition when the new deductible was enacted. Alternatively, if it is necessary to resort to presumptions or interpretive aids, I find that the deductible issue is a matter of procedural law and ought to be presumed to apply to this action.
Pre-judgment Interest
[19] Prior to January 2015, the matter of pre-judgment interest accruing on damages for non-pecuniary loss in a personal injury action was governed by rule 53.10 which provided for interest on such damages at the rate of 5% per year.
[20] On January 1, 2015 the Insurance Act was amended to include section 258.3(8.1). This provision removed the issue of pre-judgment interest from the control of the rules committee, nullified the 5% interest rate prescribed by rule 53.10 and adopted the general pre-judgment interest regime governed by section 128(1) of the Courts of Justice Act for claims arising from the operation of an automobile. The question to be determined is whether this change operates retrospectively. This issue is informed by the characterization of pre-judgment interest as a matter of substantive or procedural law. The law provides that established or existing rights should not be taken away by enactments that reach back in time and that have a retrospective effect. Procedural matters, however, are treated differently. As regards pre-judgment interest, a successful litigant generally has a prima facie right to recover interest on his or her damages.
[21] In Somers, Cronk J.A. referred to Travelers Insurance Company of Canada v Corriveau 1982 222 (SCC), [1982] 2 S.C.R at 866 at paragraph 875 where Chouinard J. referred to prejudgment interest as “damages due to delay” and concluded that pre-judgment interest should be viewed as part of the compensatory package provided to the person which makes it substantive rather than procedural in nature. The court differentiated between prejudgment interest (substantive), legal costs and the cap on non-pecuniary general damages (both procedural) in a conflict of laws context.
[22] In Somers, Cronk J.A. did not differentiate between entitlement and quantification of pre-judgment interest as substantive and procedural. This distinction was introduced in Cirillo v Rizza et al. 2015 ONSC 2440 where the defendants argued successfully that while it was clear that entitlement to prejudgment interest was substantive in nature, the mechanism for quantifying it (the rate of interest), was procedural.
[23] A few months later, Toscano-Roccamo J. in El-Khodr said that this distinction did not logically flow from, nor was it supported by, the decision in Somers and as a result, Cirillo was wrongly decided. With respect, I agree with this observation.
[24] In addition, Toscano-Raccamo J. noted the numerous cases that had held that entitlement to a particular pre-judgment interest rate is substantive law (see para. 45).
[25] In my view the distinction in Cirillo between entitlement and quantification of prejudgment interest is unwarranted. Also, I find that the weight of authority supports the proposition that both entitlement to, and quantification of, pre-judgment interest is substantive and therefore does not have a retrospective effect.
Disposition
[26] I find that the requirements of subsections 4.2 and 4.3 of the applicable regulation have been satisfied and that the plaintiff Vickers meets the threshold.
[27] The deductible applicable to the general damages award in this case is $36,540.
[28] The pre-judgment interest shall be determined on the basis of rule 53.10 until December 31, 2014 and thereafter pursuant to section 128(1) of the Courts of Justice Act.
[29] Plaintiffs’ counsel shall prepare a draft judgment in accordance with the jury’s verdict and this ruling. If there are any remaining issues to be determined before the judgment is finalized, an appointment to settle the terms of the judgment may be arranged through the trial coordinator at Pembroke.
[30] The costs of the trial are to be dealt with in writing within 45 days on a schedule agreed to by counsel.
Mr. Justice Martin James
DATE RELEASED: December 8, 2015
PICTON COURT FILE NO.: 12-157
DATE: December 8, 2015
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JACQUELINE VICKERS, SCOTT KAPITAN and THE BLOOMFIELD CARRIAGE HOUSE RESTAURANT INC.
Plaintiffs
-and –
FERRANDO PALACIOUS and GWENDOLYN PALACIOUS
Defendants
Post-Verdict Ruling
Mr. Justice Martin James
DATE RELEASED: December 8, 2015
[1] 2002 CarswellOnt 742