COURT FILE NO.: 11-50518
DATE: 2018/04/04
COURT OF ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
A.B.
Plaintiff
AND
KAITLIN WAITE and CAROL LEROUX
Defendants
Note: By order of the court, due to the nature of certain aspects of the evidence in this matter, the identity of the plaintiff is protected by a publication ban. It is forbidden for any person to publish information that may reveal the identity of the plaintiff or members of her family.
COUNSEL: David Cutler for the Plaintiff
Todd J. McCarthy, for the Defendants
BEFORE: Mr. Justice Calum MacLeod
HEARD: March 26, 2018
POST TRIAL RULINGS
[1] Following the jury verdict in this matter, the parties move for judgment. I am required to apply the statutory deductibles to the amounts awarded by the jury but counsel disagree on the result. For the reasons that follow, I am in substantial agreement with the law and the calculations submitted by counsel for the defence. Judgment will issue in favour of the plaintiff in the amount of $5,760.00. Counsel may schedule a further hearing to decide the question of costs.
Background
[2] By way of background, the plaintiff was involved in a relatively minor rear end collision on February 3rd, 2009. She was struck by a vehicle operated by the defendant Waite and pushed forwards into another vehicle. It is common ground that she suffered a whiplash associated disorder or cervical strain and missed several weeks off work.
[3] The plaintiff currently suffers from what she and her physicians describe as severe and debilitating chronic pain. While the defendant did not concede that her pain is severe enough to be disabling, the major issue dividing the parties was whether or not her chronic pain condition was a result of the motor vehicle accident.
[4] The matter was tried by a jury. Following more than three weeks of trial and three days of deliberation, the jury returned a verdict to the three questions put to them. That verdict was as follows:
a. For pain, suffering and loss of enjoyment of life resulting from the accident of February 3rd, 2009: $42,250.00.
b. For loss of income resulting from the accident of February 3rd, 2009 and sustained by the plaintiff prior to trial: $76,121.00.
c. For loss of income resulting from the accident of February 3rd, 2009 that will be incurred by the plaintiff in the future: $0
[5] It is apparent from these numbers that the jury accepted one or other of the theories put forward by the defence. The jury had been invited to conclude that after a brief period when the plaintiff was off work because of the accident she had recovered to her pre-accident state well before the date of the trial. Alternatively they were invited to conclude that conditions she was suffering from before the accident were the cause of her current chronic pain condition and it was not related to the accident.
[6] There was evidence that the plaintiff suffered some degree of chronic pain and depression prior to the accident. Her treating physicians and her expert were unanimous in their conclusions that the plaintiff is currently suffering debilitating back pain, neck pain and headaches with physical origins in the facet joints consistent with a whiplash injury. The defendant on the other hand led evidence that the plaintiff is suffering mental illness which is causing her to experience pain but is not related to the accident. They also led evidence that there is no physical basis for that pain.
General Damages
[7] The general damages assessed by the jury must be adjusted firstly by applying the statutory deductible and then by awarding pre-judgment interest. Until recently there was some conflict in the jurisprudence as to the applicability of the changes to the Insurance Act and regulations[^1] made on August 1st, 2015. As of this date the law is clear because the Court of Appeal has definitively ruled on the matter.[^2] The statutory changes apply to all damage awards whether or not the accident and the statement of claim pre-date the amendments so long as the accident occurred after November 1st, 1996.
[8] This means that general damages awards made in 2018 which do not exceed $126,610.07 are subject to a statutory reduction of $37,983.33 regardless of the date of the accident or the date when the court action was commenced. It also means that the pre-judgment interest rate for non-pecuniary damages in motor vehicle cases is the ordinary pre-judgment interest rate under s. 128 (1) of the Courts of Justice Act[^3] and not the rate for non-pecuniary loss under s. 128 (2) and the Rules of Civil Procedure. This rate is 1.3% for actions such as this one that were commenced in 2011 but the court has jurisdiction to award a different rate of interest pursuant to s. 130 of the Courts of Justice Act.[^4]
[9] Mr. Cutler argues strenuously that the Court of Appeal is in error in El-Khodr v. Lackie and Cobb v. Long Estate in deciding that the legislative amendments affect causes of action that arose before the amendments. He predicts that the Court of Appeal will overturn itself when the Cadieux appeal is argued before a 5 judge panel in May[^5] and he notes that El-Khodr is the subject of a leave to appeal application before the Supreme Court of Canada.
[10] That is not how the principle of stare decisis operates in Canada. Lower courts are not at liberty to overrule the decision of a higher court and appellate courts themselves should not lightly depart from their own previous decisions.[^6] The only instance in which I would not be bound by a decision of the Court of Appeal that is directly on point would be if there is an equally authoritative contrary decision of the same court. That is not the case here and I am not entitled to ignore the binding authority of El-Khodr or Cobb based on wishful speculation about the outcome of a different appeal that has not yet been argued.
[11] As a consequence of the legislative amendments, the general damages award of $42,250.00 must be reduced by $37,983.33. This produces a net award of $4,266.67. The plaintiff is entitled to pre-judgment interest on this amount from May of 2009 to the date of trial at either 1.3% per annum or another interest rate if I exercise discretion under s. 130. I am not entitled to exercise that discretion to overrule the effect of the legislation but I am entitled to exercise it if any of the factors set out in s. 130 persuade me it is just to do so. In this case I consider the length of time this matter has been before the court, the fact that it was originally scheduled to go to trial in 2016 at a time when the law had not been settled and the circumstances of the case. I have calculated pre-judgment interest at 4% for 8.75 years which totals 35%. Applying this to the net award generates PJI of $1,493.33. The plaintiff is therefore entitled to an award of $5,760.00.
Past Loss of Income
[12] The jury awarded $76,161.00 to the plaintiff for her past loss of income. From this it is necessary to deduct any collateral benefits paid to her for income replacement. The plaintiff acknowledges she received $3,200.00 in Income Replacement Benefits between August and October of 2009. In addition she settled her accident benefits claim with her motor vehicle insurer. The allocation of funds in the insurer’s accepted offer included $12,800.00 for all past and future income replacement benefits. The settlement also included sums for medical benefits, housekeeping and legal fees, disbursements and HST. The plaintiff concedes that the defendants are entitled to credit for the $3,200.00 and the $12,800.00 but with respect to the latter she proposes that it be discounted to $8,000.00. Mr. Cutler argues that the $16,800.00 allocated for costs under the settlement did not fully cover the plaintiff’s actual legal costs.
[13] There is some authority for the proposition that if SABS benefits or other collateral benefits must be litigated, the amount to be deducted from the tort recovery under s. 267.8 of the Insurance Act should be net of legal fees.[^7] Since the principle underlying the legislative modification of the common law position with respect to such benefits was to avoid double recovery, I am in agreement that this objective is not met and the plaintiff is instead penalized if legal fees are not considered. This does not mean that an arbitrary reduction in credit for collateral benefits is appropriate. The court would require evidence of the actual amounts charged to the client and how that affects the recovery from the accident benefits carrier. I am not satisfied that the $12,800.00 should be reduced to $8,000.00 without that evidence but even if I accept that position, the defendants are entitled to a credit of $11,200.00 for the IRBs and the settlement.
[14] In addition to litigating with the accident benefits carrier, the plaintiff also had a dispute with her LTD carrier. That litigation was also resolved and the plaintiff received funds in settlement of past and future income loss. In particular, she received the sum of $50,000.00 for “taxable arrears of long term disability benefits” for 2010, 2011 and 2012. She received a further $100,000.00 in respect of entitlement to future long term disability benefits and legal costs. Mr. Cutler argues that this amount should not be deductible because it is not clearly only for loss of income. S. 267.8 (1) 2. provides credit for all payments “for income loss or loss of earning capacity … or under an income continuation benefit plan.” I recognize that the release attached to the minutes of settlement released all claims against the LTD carrier and also against the City of Ottawa as employer. The reality however is that this is settlement of an LTD claim which is largely if not entirely income replacement. In my view, the defendants are entitled to credit for at least a portion of the $100,000.00 for future LTD benefits but at the very least they are entitled to full credit for the $50,000.00 paid for arrears of long term disability benefits. That should be net of tax but I was not provided with such a calculation. For purposes of this decision, I will reduce the credit to $40,000.00.
[15] Finally, there is an issue with the first year post accident. During that year, the plaintiff worked for periods of time, was accommodated for periods of time, received sick days or short term income continuation for other periods of time and was also off work for at least a month because of a previously scheduled operation. The exact periods of time during which the plaintiff worked full time or part time or was off work were identified by her on the calendar filed as Exhibit 40. No calculations were put before the court to differentiate these different forms of income or income replacement. The reality is that during 2009 the plaintiff suffered very little income loss despite being off work for several weeks immediately post-accident, attempting to return to work at least twice on modified duties, missing time for her operation and eventually ceasing work altogether in mid-November.
[16] The plaintiff’s economic expert prepared a calculation of her income loss to the date of the trial using the statutory formula which permits no recovery for the first week post-accident and 80% of the lost wages from that date to the date of trial. The number he generated if the loss had continued to the date of trial from the date of the accident would have been $319,752.00.[^8] At Mr. McCarthy’s suggestion under cross examination, he also generated losses using the same formula and making different assumptions. For example, he calculated the plaintiff’s loss to March 15th, 2010 at $35,290.00[^9] and he calculated her loss to February 6th, 2013 at $133,760.00.[^10]
[17] The important point about this evidence is the fact that the expert ignored all income received by the plaintiff in 2009 whether it was salary continuation, sick days or short term disability payments. He was asked about this and testified that he believed all of that income would be treated as collateral benefits and would be dealt with by the judge post-verdict.
[18] I questioned counsel about this assumption. I specifically asked counsel if they were in agreement with this approach and I received an affirmative answer. I charged the jury in this manner and I instructed them to calculate the past loss without making any deduction for money actually received by the plaintiff in 2009 or any other year. She received a T4 slip for $35,049.69 for 2009 and while some of that amount represented salary earned in the month prior to the accident, at least $30,000.00 of that amount was earned post-accident and net of tax should generate a deduction from the damages assessed by the jury. This represents a credit of roughly $25,000.00.
[19] Mr. Cutler now argues that not all of the funds received in 2009 were truly collateral benefits within the meaning of the Act or the jurisprudence. I accept that may be technically correct but the problem is if the income was received either from her employer or from an insurer then that income is not lost. Since the expert calculated the losses without considering that income and I instructed the jury not to consider it, it would be grossly unfair to the defendants if I do not deduct that income from the jury award.
[20] I have not made any deduction for CPP disability benefits.[^11]
[21] Conservatively therefore the defendants are entitled to the sum of $76,200.00 in credits ($11,200.00 + $40,000.00 + $25,000.00 = $76,200.00) against the amount awarded by the jury for past income loss. Unfortunately this exceeds the $76,161.00 and therefore reduces it to zero.
Conclusion
[22] This is a disastrous outcome for the plaintiff. It would only have been worse had I granted the threshold motion. It illustrates the legislative intention that all but the most significant tort claims should be eliminated and injured motorists be largely confined to claiming no fault benefits under their own insurance policies.
[23] It also illustrates how annual indexing of the monetary threshold for unreduced general damages and annual indexing of the deductible may in short order make unreduced general damages largely unattainable. A review of jury awards in this jurisdiction over the past decade would reveal that general damages in excess of $130,000.00 are very much the exception. There is no evidence that jury verdicts have become more generous to keep pace with inflation.
[24] In conclusion I am compelled by the Insurance Act and the Regulations to reduce the jury verdict of $118,371.00 to $5,760.00. Judgment may issue for the latter amount and I may be spoken to with respect to costs.
Mr. Justice Calum MacLeod
Date: April 4, 2018
COURT FILE NO.: 11-50518
DATE: 2018/04/04
Note: By order of the court, due to the nature of certain aspects of the evidence in this matter, the identity of the plaintiff is protected by a publication ban. It is forbidden for any person to publish information that may reveal the identity of the plaintiff or members of her family.
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: A.B., Plaintiff
AND
Kaitlin Waite and Carole Leroux, Defendants
BEFORE: Mr. Justice Calum MacLeod
COUNSEL: David Cutler, for the Plaintiff
Todd J. McCarthy, for the Defendants
POST TRIAL RULINGS
Mr. Justice Calum MacLeod
Released: April 4, 2018
[^1]: Insurance Act, RSO 1980, c. I..8, s. 267.5 as amended by S.O. 215, c. 20, Sched 17 and O. Reg. 461/96 as amended by O.Reg 221/15
[^2]: See El-Khodr v. Lackie 2017 ONCA 716 and Cobb v. Long Estate, 2017 ONCA 717
[^3]: R.S.O. 1990, c. C.43
[^4]: See Cobb v. Long Estate, supra @ para. 73
[^5]: Cadieux v. Saywell, 2016 ONSC 7604
[^6]: See Canada v. Craig, 2012 SCC 43, [2012] 2 SCR 489
[^7]: See Siddiqui v. Siddiqui 2015 ONSC 6260
[^8]: Exhibit 70
[^9]: Exhibit 77
[^10]: Exhibit 78
[^11]: Demers v. Monty, 2012 ONCA 384, (2012) 111 O.R. (3d) 42 (CA)