Court File and Parties

Court File No.: CV-09-383220 Date: 2018-09-13 Superior Court of Justice - Ontario

Re: Nash Woodbury, a minor by his Litigation Guardian, Tracy Lillico, and Tracy Lillico, Plaintiffs And: Robert Woodbury, Lance Fraser Hamilton, Charlene Ann Sibley and Aideen Claire Hamilton, Defendants

Before: Madam Justice Darla A. Wilson

Counsel: Stacey Stevens, Counsel for the Plaintiff

Heard: In Writing

Endorsement

[1] This is a Rule 7 motion for approval of a tentative settlement involving the Plaintiff, Nash Woodbury (“Nash”) and the Defendant Lance Hamilton (“Hamilton”). The motion requesting approval from the Court pursuant to Rule 7 of the proposed settlement of the claims against Hamilton for the sum of $57,500 was filed in September, 2017.

[2] By way of background, this claim arises from a boating accident which occurred on August 11, 2007 when Nash, who was nine years of age at the time, was being pulled on an inner tube behind a boat driven by his father, the Defendant Robert Woodbury (“Woodbury”). The tube on which Nash was riding crashed into the boat that was being driven by Hamilton, which was pulling an inner tube with three children on it. As a result of the collision, Nash suffered catastrophic injuries, including a very severe head injury which has left him with serious cognitive deficits and seizures. As a result, this action is brought on his behalf by a Litigation Guardian, his mother, Tracy Lillico. The Defendant Woodbury did not defend the action and has been noted in default.

[3] I released an endorsement on September 25, 2017 in which I refused to approve the proposed settlement because the materials submitted were deficient in several respects. In my endorsement, I raised a number of concerns: the evidence on the potential liability of Hamilton was unsatisfactory; there was absolutely no evidence concerning insurance coverage of either boat; the affidavit filed by the solicitor failed to adequately set out the reasons he was prepared to recommend the settlement, given the severity of Nash’s injuries; and the affidavit of the Litigation Guardian simply stated that she accepted her solicitor’s recommendation that the settlement was in her son’s best interests. I requested further materials addressing these concerns be sent to me for review.

[4] I received no response until June 5, 2018 when Ms. Stevens sent me a letter in which she addressed the issues of insurance coverage and some of the procedural history of the action. The letter included a draft report of a marine safety investigator which had not formed part of the motion materials. The expert opinion was not helpful on the issue of potential liability of Hamilton.

[5] In her correspondence, Ms. Stevens included information concerning available insurance policies; she advised that neither boat was insured at the time of the accident; the letter also dealt with efforts to ascertain whether the Defendants had assets to pay a judgment. Finally, Ms. Stevens advised that she had instructions to proceed to obtain a default judgment against Woodbury.

[6] It is trite to say that it is the obligation of counsel to persuade the court that a proposed settlement is in the best interests of a party under a disability and approval ought to be granted pursuant to Rule 7.08 of the Rules of Civil Procedure. The Court must exercise its gatekeeper function to ensure that the proposed resolution is reasonable in all respects, based on the evidence. The Court does not “rubber stamp” settlements simply because counsel on record have agreed with the terms of the settlement. It is incumbent on counsel to prepare proper materials that set out the history of the matter, the evidence that has been amassed and the reasons why the proposed settlement is being recommended by counsel.

[7] In my capacity as the lead judge in Toronto for Rule 7 motions, I review every motion and application that is filed with the court for approval. Too often, the materials that are submitted are deficient, lacking in particulars and do not provide a basis upon which a judge could assess whether the tentative settlement is in the best interests of the party under a disability. This leads to delay and unnecessary work for a court that is already under resourced. The case before me falls into this category, unfortunately.

[8] The motion record did not contain sufficient information about issues that are critical to my appreciation of why counsel is recommending the case resolve for a fraction of what the damages are worth. After my endorsement was released, it took counsel nine months to provide a response to the Court. While the letter that was sent addressed the concerns that had been articulated in my endorsement, counsel failed to provide an affidavit, which constitutes evidence before the court. It is not sufficient to simply send a letter in response to an endorsement sent by a judge requiring further evidence be tendered to the Court.

[9] Rule 7.08(4) of the Rules of Civil Procedure stipulates what material is required for approval of a proposed settlement: there must be an affidavit from counsel “setting out the lawyer’s position in respect of the proposed settlement” as well as a similar affidavit from the Litigation Guardian. It is only through adherence to the requirements of the Rule that the court can be in a position to determine whether the tentative settlement is in the best interests of the party under a disability.

[10] Ms. Stevens indicated in her letter that she was reluctant to deliver an affidavit setting out the opinion of the marine safety expert in case the approval was not granted and the matter proceeded to trial against Hamilton. That is not a valid concern, in my view, and it would not be necessary to disclose in the affidavit materials the identity of the expert nor the entire opinion. The Court relies heavily on the views of counsel acting for a party under a disability as to why the proposed settlement is best for the party. Counsel need not necessarily include draft reports in motion materials. There does, however, have to be evidence from the solicitor on the issues that impact his or her opinion of the quantum of damages, the likelihood of being successful on liability, the quality of an expert opinion and other issues that directly influence a solicitor’s opinion on the proposed settlement and why it is in the best interests of the party under a disability. It may be sufficient for counsel to depose that attempts to obtain a favourable expert opinion on liability have been unsuccessful and as a result, the negotiated offer is the best that can be obtained in the circumstances.

[11] In the case before me, the lack of available insurance policies to respond to the claim is an important consideration; Nash’s injuries are very severe and the proposed resolution is nominal. The issue of whether there was a valid policy of insurance to pay Nash’s claim was not addressed at all in the motion record nor was the ability of either Defendant to pay a significant judgment. The evidence on liability was not clearly articulated. The onus is on the solicitor seeking approval of the proposed settlement to submit materials that persuade the Court the approval ought to be granted because the proposed settlement is reasonable based on the evidence and it is in the best interests of the party under a disability to resolve the claim accordingly.

[12] Counsel for the Plaintiffs is directed to submit an affidavit from counsel addressing the concerns raised in my endorsement of September 25, 2017. I would anticipate this would include at least some of the information set out in the letter from Ms. Stevens dated June 5, 2018. Given the lengthy delay in responding to my endorsement of September 25, 2017, I would request the affidavit be provided no later than September 28, 2018.

D.A. Wilson J. Date: September 13, 2018