OSHAWA COURT FILES NOS.: 43376/06 and 86345\13

DATE: 2016\03\24

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Alexia Alexander, by her Litigation Guardian et al

And

Estate of Michael Willie and Wawanesa Mutual Insurance Company et al

BEFORE: Salmers J.

E N D O R S E M E N T

[1] This matter was brought before me in chambers as a basket motion. The motion is for approval of the settlements of the tort and accident benefit claims of the minor, Alexia Alexander.

[2] The injuries of the minor plaintiff are of catastrophic severity, primarily a brain injury with alleged lifelong sequelae. The damages and amounts of the proposed settlements are very large, several million dollars. The facts and issues concerning both liability (of the various defendants) and damages are very complicated. The materials before me are voluminous, four very thick bound volumes each of which contains hundreds of pages.

[3] I have numerous concerns that must be addressed by further affidavit evidence before the proposed settlements can be further considered. Due to the extensive time that has been spent by me on this matter, it would be a more efficient use of judicial resources for me to remain seized of this matter rather than to have another judge or judges have to bring themselves up to speed in order to have to deal with the matter. Accordingly, I remain seized of this matter.

[4] It is not required by the Rules, but in proposed settlements as complicated and with materials as voluminous as in this case, it is increasingly common and useful to me to see an index to the materials. Included in that index are references to pages and paragraphs of the supporting affidavits so that the judge is more easily able to find those paragraphs in the materials where relevant information or documents are contained. When this matter is resubmitted to me, counsel is to prepare such an index.

[5] A number of concerns arise from the fact that plaintiff’s counsel chose to have dealings with the plaintiff’s father, Alexis Alexander.

[6] Mr. Alexander is a defendant to the plaintiff’s tort action. Plaintiff’s counsel is also counsel for Mr. Alexander in his accident benefit claim against his insurer. Mr. Alexander is a defendant in the action of the plaintiff, his daughter, in a claim of very significant magnitude and complexity. The interests of justice may have been better served, even if in appearance only, had Mr. Alexander been represented by different counsel than represented his daughter. If different counsel had been retained, there could be no argument at a later date that perhaps retainer of the same counsel had been a conflict of interest.

[7] Also, due to Alexia Alexander and her father being represented by the same counsel, there are significant issues about commingling of expenses and disbursements.

[8] In the proposed settlement, a portion of certain loans is to be paid from the settlement proceeds of Alexia. The loans were made from Alexia’s counsel to Alexia’s father. So, Alexia’s counsel was giving money, albeit a loan, to a party who is a defendant in the action in which Alexia is a plaintiff. Perceptions of conflict abound. In any event, those loans were essentially made to supplement the father’s loss of income sustained as a result of the accident. Accordingly, I am not satisfied that Alexia’s portion of the settlement funds should be utilized to pay any part of the loans to her father. Based on the evidence before me, I would not be prepared to approve a settlement in which Alexia’s settlement funds were used to pay such loans.

[9] Also, the settlement proposes that $376,566.42 of disbursements be paid from Alexia’s portion of the settlement funds. The list of disbursements lacks detail and invoices are not included in the materials before me. Some of the disbursements appear to be expenses or disbursements that may have been incurred on behalf of Alexia’s father and, possibly, of her late mother. Further evidence is required about the disbursements shown on Exhibit 53 of the supporting affidavit. If available, invoices should be provided for significant disbursements. Evidence is required explaining why each disbursements on Exhibit 53 is attributable to and should be paid from Alexia’s settlement funds.

[10] Apart from commingling, there are other concerns in the proposed settlement.

[11] The settlement proposes that Alexia’s settlement funds be used to pay what are referred to as outstanding expenses. With respect to each such expense, evidence is required that explains why each expense is attributable to Alexia and also explaining why the expense was not paid by the factors referred to in paragraph 172 of the supporting affidavit including accident benefits or other benefits, insurance, compensation or other coverage available to Alexia.

[12] The settlement also refers to $80,000 of available monies being paid to counsel for Donna McEachern, a defendant in Alexia’s tort action. Monies paid to Ms. McEachern reduce the money available to Alexia. Evidence is required as to why it was appropriate to pay $80,000 of available monies to Ms. McEachern.

[13] The proposed settlement is that $350,479.38 of Alexia’s settlement monies be paid immediately to her father. The major basis for this request is $250,000 for home renovations that are recommended by Paul Colangelo in his September 18, 2015 summary of Alexia’s future care costs, exhibit 35 to the supporting affidavit. In that report, there is simply a single line that states that home renovations are required costing $250,000. Detailed evidence is required about the nature and costs of those renovations, the father’s intention to carry out those renovations, and the schedule proposed by him to do so.

[14] Lastly, there is the issue of fees. Plaintiff’s counsel is requesting over $1.4 million for his fees. Evidence is required to satisfy the court that none of these fees represent fees with respect to the father’s accidents benefits action. Also, I realize that there is a fee agreement. However, evidence is required as to satisfy the court of the amount that should be approved for counsel’s fees.

[15] Additionally, there are problems with the form of the proposed judgments:

a) a copy of the payment schedule pursuant to the structured settlement must be attached to the tort judgment;

b) the tort judgment must state to whom the annual payments of the structured settlement are to be made. The materials must explain why that person is in the child’s best interests. The materials before me contain very limited detail about the father’s qualification in this regard;

c) unless Alexia becomes capable of managing her own affairs, there must be a guardianship application made prior to the expiry of the yearly payments and final lump sum payment under the structured settlement. The tort judgment must also state that court approval is required prior to any lump sum payment or further payments under the structure after Alexia becomes 18 years old; and

d) the accident benefits judgment must state that the monies received therein are part of the funds being utilized to pay for Alexia’s annuity.

[16] As stated earlier, this is a case of very significant injuries, significant complexity, voluminous material, and damages that must compensate Alexia for lifelong sequelae. This settlement is of tremendous importance to Alexia for the rest of her life. In these circumstances, a report from the Children’s Lawyer would assist me in in determining whether to approve the settlement.

[17] As this matter is being referred to the Children’s Lawyer for a report, some time will elapse before that report is received by me. By that time, the most recent medical reports in the materials will be at least a year old. Counsel must obtain updated medical reports from the appropriate medical caregivers to enable me to determine whether to approve the settlement.

[18] For these reasons, it is ordered:

a) further evidence is required about proposed payment of loans as referred to above;

b) further evidence is required about the proposed payment of disbursements as referred to above;

c) further evidence is required about proposed payment of outstanding expenses as referred to above;

d) further evidence is required about the $80,000 payment to Ms. McEachern as referred to above;

e) further evidence is required about the proposed $250,000 for home renovations as discussed above;

f) further evidence is required about the amount of counsel fees that are requested to be approved;

g) a copy of all of these motion materials and a copy of this endorsement are to be forthwith sent to the Children’s Lawyer and this matter is referred under Rule 7.08(4) to the Children’s Lawyer to provide the usual, thorough report on all aspects of the proposed settlement and also addressing the concerns referred to above, matters of quantum and nature of the settlement, fees, and disbursements;

h) up-to-date medical reports are to be obtained before this motion is resubmitted to me; and

i) I remain seized of this matter.

Salmers J.

DATE: March 24, 2016