COURT FILE NO.: 18-75869
DATE: 2018/05/17
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SARA AHMAD, by her Litigation Guardian EMAN MARZOK – Applicant v. ALLSTATE INSURANCE COMPANY – Respondent
BEFORE: Madam Justice Sylvia Corthorn
COUNSEL: Miryam Gorelashvili, Counsel for the Applicant
No one appearing for the Respondent
HEARD: In writing
ENDORSEMENT
Introduction
[1] This application is for approval of a settlement reached of the applicant’s claim for Statutory Accident Benefits (“SABS”). In October 2013, when she was 11 years old, the applicant suffered injuries as a result of a motor vehicle accident. The applicant was a rear-seat passenger in a vehicle driven by her mother. A settlement was reached of the applicant’s tort claim. Following the settlement of the tort claim, the applicant’s accident benefits claim continued to be pursued.
[2] The pursuit of the accident benefits claim included assessments of the applicant in respect of the criteria for designation as “catastrophically impaired” pursuant to the SABS. The assessors retained on behalf of the applicant concluded that she meets the definition of catastrophic impairment on the basis of both Criterion 7 (Whole-Person Impairment) and Criterion 8 (Class 4, Marked Impairment).
[3] An application was made to the respondent insurer for designation of the applicant as catastrophically impaired. The respondent arranged for a series of examinations of the applicant. The assessors who conducted those examinations concluded that the applicant does not meet either Criterion 7 or 8 for designation as catastrophically impaired. The respondent denied the application for designation as catastrophically impaired.
[4] The applicant commenced a proceeding before the License Appeal Tribunal (the “Tribunal”) for arbitration of the dispute as to whether the applicant is catastrophically impaired within the meaning of the SABS. A settlement was reached before the dispute with respect to catastrophic impairment proceeded to arbitration.
[5] The settlement reached is in the amount of $100,000. It appears that the settlement is for the applicant’s claim for SABS in its entirety. The application record does not include documentation of any kind as evidence of the settlement said to have been reached.
[6] It also appears that the application before the Tribunal was withdrawn before the applicant commenced this proceeding for approval of the settlement.
Disposition
[7] For the reasons set out below, I am unable to approve the settlement at this time.
Procedural Issue
[8] In my January 2018 decision in Leonard v. Saint-Vincent Hospital, I addressed in detail the circumstances in which it is possible to obtain, by way of an application, court approval of a settlement reached by or on behalf of a party under a disability (2018 ONSC 370). For the reasons set out in Leonard, the applicant in this matter needs to consider whether (a) she will continue to pursue court approval by way of the application, (b) if so, whether the applicant intends to proceed by way of oral hearing or in writing, and (c) if the latter, the additional relief required to proceed with the application in writing.
[9] Regardless of the procedural issue, the deficiencies in the record are significant and would preclude me from determining the substantive issues.
Deficiencies in the Record
a) Application Made Without Notice
[10] No affidavit of service is included with the application record. It therefore appears that the applicant is seeking to have the substantive issue, of court approval of the settlement, determined without notice to the respondent. If the applicant intends to proceed without notice to the respondent then (a) additional relief is required, (b) the additional relief required is to be identified in either an amended notice of application or a notice of motion, (c) grounds in support of the additional relief are to be set out, and (d) evidence, if required, in support of the additional relief is to be included in the additional materials filed.
[11] Otherwise, the application or motion shall be made on notice to the respondent and the respondent shall be served with the existing application record and any additional materials filed in support of the relief requested on the application or motion.
b) No Grounds Provided in Support of Relief Requested
[12] The substantive text of the application fills less than half a page. The grounds set out are restricted to the following: “S. 7.08 of the Rules of Civil Procedure and such further grounds as this Honourable Court Deems appropriate.” Presumably, counsel for the applicant meant rule 7.08 and not “S” or “section” 7.08, of the Rules of Civil Procedure. When referencing a procedural rule or a statutory provision as one of the grounds in support of relief requested, it is not sufficient to merely identify the rule or statutory provision. A summary of the contents of the rule or statutory provision is required.
[13] The notice of application is completely lacking of any narrative recitation of the grounds in support of the relief requested.
c) No Consent or Minutes of Settlement
[14] The record includes a draft order. There is no evidence that counsel for the respondent was given an opportunity to review and approve the terms of the draft order.
[15] The record does not include a consent signed by counsel for the respondent as evidence of approval as to the form and content of the draft order and therefore of the respondent’s consent to the relief requested.
[16] The record does not include minutes of settlement executed by or on behalf of the parties.
[17] In summary, there is no direct evidence of a settlement having been reached. The parties are represented by counsel. There is no reason why either a consent or minutes of settlement cannot be prepared, executed, and included in the record in support of the relief requested.
[18] The applicant will turn 16 in July 2018. If the additional materials in support of the request for approval of the settlement are not filed until after the applicant’s 16^th^ birthday, then the record must also include a consent signed by the applicant herself (sub-rule 7.08(4)(c)).
d) Title of Proceeding
[19] The infant applicant is referred to in the title of proceeding as “Applicants”. There is only one applicant in this matter. The fact that the infant applicant is represented by a litigation guardian does not increase the number of applicants from one to two. The title of proceeding requires amendment to reflect that there is only one applicant.
e) Terms of Draft Order are Incomplete
[20] The relief requested is limited to the following: “An Order that the settlement between the applicants (sic), Sara Ahmad, a minor by her Litigation Guardian Eman Marzok, and the Respondent, Allstate Insurance Company in the amount of $100,000.00 is approved by the court.” The draft order does not speak in any way to what will be done with the settlement funds, assuming the settlement is ultimately approved.
[21] Will any or all of the settlement funds be paid into Court? If so, then the address at which the applicant resides and the name of the adult with whom she resides are to be included in the terms of the order.
[22] If some or all of the settlement funds will not be paid into Court, then the record must address sub-rule 7.09(1) and the criteria established in Hoad v. Giordano (1999), 30 C.P.C. (4th) 59 (Ont. Gen. Div.).
[23] The only evidence as to what is intended for the settlement funds is set out in paragraph 9 of the affidavit of the litigation guardian. The applicant’s mother says, “I was explained that the funds will be kept in court until Sara reaches the age of majority and nobody will have access to these funds. I was further explained that upon attaining the age of majority, Sara will be able to use the funds as she sees fit.”
[24] Payment into court of the net settlement payable to the applicant may well be reasonable. However, the overall deficiencies in the record (and the procedural issues that remain to be addressed) preclude a determination of that aspect of the matter at this time.
f) Breakdown of the Settlement
[25] The record does not include a breakdown of the $100,000 settlement in terms of accident benefits (including by category) and any other portions of the settlement (i.e. costs of the Tribunal proceeding to and including the filing of the notice of withdrawal). A copy of the Settlement Disclosure Notice is not included in the record. Neither of the supporting affidavits addresses the breakdown of the settlement in any way.
g) Merits of the Monetary Amount
[26] Even assuming a breakdown of the $100,000 figure is provided, there is no evidence whatsoever to assist the Court in determining whether the monetary amount of the settlement is reasonable.
[27] Copies of the police report for the accident, the ambulance call report, and emergency department records for the applicant’s attendance at the hospital on the date of the accident are not included in the record. Those documents would be of assistance to the Court in understanding the nature and severity of both the collision and the applicant’s injuries, at least as first appreciated by the health-care professionals by whom the applicant was seen on the date of the accident. From the reports of the individuals who carried out the assessments with respect to catastrophic impairment, it appears that both the applicant and her mother were transported to hospital by ambulance on the date of the accident.
[28] The applicant was 11 years old when the accident occurred. In July 2018, she will turn 16 years old. The evidence indicates that the applicant received several types of treatment and rehabilitation services in the more than four years since the date of the accident. The evidence also indicates that the applicant would benefit from continuing to receive treatment and rehabilitation services.
[29] There is no cost of future care report or life care plan in the record. It is not known whether such a report or plan was commissioned on behalf of the applicant. Even if no such report or plan was commissioned, evidence is required of the applicant’s future needs.
[30] To assist the Court in determining whether the $100,000 settlement is reasonable, evidence is required in respect of the following matters:
• The type of treatment and rehabilitation services the applicant has received and/or continues to receive as a result of the accident;
• The frequency of the treatments and services;
• The expenses incurred to date for the treatments and services including, if possible, on an annualized basis;
• The recommendations of the treatment and service providers as to future treatments and services for the applicant. For example, in her February 2, 2018 “Brief Psychological Progress Report”, the treating psychologist opines that the applicant would benefit from continued participation in psychological services on a bi-weekly basis for the immediate future; and
• Any other matters relevant to consideration of the expenses that the applicant will incur in the future for treatment, services and other items covered by the SABS.
[31] There are inconsistencies between the treating psychologist’s description of the applicant’s current condition and the description of the applicant’s current condition as set out in the affidavits filed in support of the application. For example, the treating psychologist states that (a) the applicant’s “participation in social and recreational activities continues to be significantly limited in relation to what would be typically expected at her developmental stage”, and (b) “[o]verall, despite some identifiable improvements over time, [the applicant] does continue to experience significant anxiety, symptoms of Posttraumatic Stress Disorder, and depressive symptoms.”
[32] Addressing the future, the treating psychologist opines that the applicant “remains vulnerable to potential emotional deterioration/relapse of severity of symptoms in the future during periods of increased stress and life transitions”. The psychologist cites events such as attending university as a potential triggering event for deterioration or a relapse of the applicant’s condition. The psychologist also highlights that it is “highly likely” that the applicant will require additional supports such as a psychoeducational assessment and academic accommodations.
[33] In contrast, at paragraph 5 of her affidavit, the litigation guardian (the applicant’s mother) expresses the following opinion with respect to how her daughter is doing:
I feel that Sara’s injuries has (sic) subsided over time. She is now a teenager and does not really want to spend more time attending counseling. She is doing much better in school. She has a circle of friends and she is socializing with them on a regular basis. Sara is very interested in fashion and music and spends time on the internet. Her school attendance or performance has not been affected by this incident.
[34] The affidavit of the litigation guardian was sworn on February 20, 2018—less than three weeks after the date of the psychologist’s report. It is difficult to reconcile the contents of the litigation guardian’s affidavit with the contents of the treating psychologist’s report.
[35] In counsel’s affidavit the statement is made that, “Sara expressed her desire to discontinue psychological treatments.” When, how, and to whom that desire was expressed is not identified in counsel’s affidavit.
[36] Also in contrast to the treating psychologist’s opinion about Sara’s needs over time, counsel’s evidence is that, “Sara does not require any special needs accommodation [at school] and her grades are average.” From the most recent report card attached as an exhibit to counsel’s affidavit, it appears that the applicant’s marks vary from course to course; some of the applicant’s marks are below, some are above, and some are equal to the class median.
[37] There is no evidence as to whether (a) the applicant had an Individualized Education Plan at any time subsequent to the date of the accident, (b) if so, what accommodations were made, (c) if so, the nature of any accommodations that the applicant continues to require, and (d) how the applicant’s needs, as identified by the treating psychologist, will be met in the event the applicant pursues post-secondary education
[38] As to how the applicant describes her situation, the psychologist’s summary of the applicant’s self-report is that “her symptoms continue to increase during periods of higher stress (e.g. during school examination period), including elevated anxiety, significant sleep disruption, frequent nightmares, decreased motivation, and difficulty concentrating at school.” I note that the psychologist did not have the benefit of the most recent series of report cards from the applicant’s school.
[39] The assessments conducted in 2016 in support of the application for designation as catastrophically impaired also address the applicant’s function. I have, for the purpose of this endorsement, focussed on the contents of the February 2018 report of the treating psychologist. The assessment reports, however, provide some insight into how the applicant was functioning at that time.
[40] In summary, additional evidence is required to assess whether the monetary amount of $100,000 is a reasonable settlement of the applicant’s claim for accident benefits in its entirety.
h) Evidence as to Catastrophic Impairment
[41] The record does not include a copy of the OCF-19 (application for designation as catastrophically impaired) filed on behalf of the applicant with the respondent. The filing of that document triggered the dispute, the settlement of which is the subject of this application. It would be helpful to see how the applicant’s position was framed in that application.
[42] The discussion in counsel’s affidavit as to the opinions expressed by the assessors retained on behalf of the applicant and those who conducted the insurer examinations is extremely limited. There is minimal, if any, explanation as to why counsel is of the view that the results of the insurer examination would carry the day at arbitration. There is no analysis of the opinions expressed by each set of examiners, including highlighting of their respective strengths and weaknesses.
[43] The only opinion expressed by counsel for the applicant with respect to the merits of the application for designation as catastrophically impaired is set out in paragraph 18 of counsel’s affidavit. She states:
I welcomed [the opportunity to explore settlement] as I was not very confident that we will succeed with our Catastrophic Determination at the LAT hearing. Sara’s score with the [assessors retained on her behalf] was not very high and she only met the Catastrophic Definition once her score was rounded. While she was suffering from psychological impairments, she continued to attend school and socialize with her family and friends.
[44] Counsel addresses only Criterion 7 and the rounding of the applicant’s score with respect to Whole-Person Impairment. Counsel does not specifically address why she is of the opinion that the conclusions reached by the insurer examiners would carry the day with respect to Criterion 8 (Class 4, Marked Impairment).
[45] There are no examples provided of other cases in which divergent opinions have been considered and a determination made as to whether an individual is catastrophically impaired. Such examples would be of assistance to the Court in assessing whether it is reasonable for the applicant to abandon the application for designation as catastrophically impaired and the additional SABS that would be available to her in the event the applicant was successful in obtaining that designation.
i) Solicitor-Client Account
[46] Included as an exhibit to counsel’s affidavit is a copy of a contingency fee retainer agreement (“CFRA”) signed by the applicant’s mother personally and in her capacity as litigation guardian for the applicant. The wording of the CFRA agreement is such that it appears to be restricted to a solicitor-client relationship for the purpose of the tort claim arising from the October 2013 accident.
[47] For example, the introductory paragraph of the CFRA states, “MG Law is being retained by the client to provide the following services, namely, to represent the client in respect to injuries, losses and damages resulting from a motor vehicle accident or slip and fall which occurred on …”. A slip and fall claim, based in occupier’s liability, would not give rise to a claim for SABS. “Losses and damages resulting from a motor vehicle accident” are distinct from the injured person’s claim for SABS.
[48] In addition, the CFRA refers to “judgment following a trial”, “damages plus interest”, the recovery of “partial indemnity costs”, “compensation for the injuries, losses, and damages … suffered”, “Motions in Court”, and “the completion of the file either by way of settlement or by way of a judgment after trial”.
[49] There is no mention whatsoever of SABS, arbitration, a proceeding before the Tribunal, and the manner in which costs are addressed in the context of such a proceeding.
[50] The CFRA does identify that court approval is required of a contingency fee retainer agreement executed on behalf of a party under a disability. The relief requested in the notice of application does not include approval of the CFRA. If counsel intends to seek approval of the CFRA as part of the approval of the settlement, then that aspect of the required relief needs to be addressed in the record. If that approval is sought, the requirements of the Solicitors Act, R.S.O. 1990, c. S.15, and the regulations thereunder must be addressed.
[51] If approval of the CFRA is not sought, then approval is required of the solicitor-client account on a fee-for-service basis and relief in that regard needs to be addressed in the record.
Summary
[52] I remain seized of the matter. Additional materials shall be filed in the ordinary course and to my attention. In the event the applicant proceeds with the request for approval by way of an oral hearing of the application, a date for that hearing shall be obtained in the ordinary course.
____________________________________ Madam Justice Sylvia Corthorn
Date: May 17, 2018
COURT FILE NO.: 18-75869
DATE: 2018/05/17
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: SARA AHMAD, by her Litigation Guardian EMAN MARZOK – Applicant v. ALLSTATE INSURANCE COMPANY – Respondent
BEFORE: Madam Justice Sylvia Corthorn
COUNSEL: M. Gorelashvili, Counsel for the Applicant
No one appearing for the Respondent
ENDORSEMENT
Madam Justice Sylvia Corthorn
Released: May 17, 2018