Court File and Parties

COURT FILE NO.: 18-65495 DATE: 2020-06-09 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Bentley David Allen Hall, a minor by his Litigation Guardian, David Thomas Hall, and David Thomas Hall and Megan Anne Clark, Plaintiffs

AND:

Shahnaz Tehseen, Hamilton-Wentworth District School Board and Kim Collier, Defendants

BEFORE: Justice L. Sheard

COUNSEL: Mary K. Grosso, Counsel for the Plaintiffs Lindsay Rodenburg, Counsel for the Defendants, Hamilton-Wentworth District School Board and Kim Collier Kaushik Parameswaran, Counsel for the Defendant, Shahnaz Tehseen

HEARD: In Writing

Endorsement

Overview

[1] The plaintiffs submitted a motion in writing seeking approval of an infant settlement and judgment directing the disbursement of settlement funds. This is the third and final endorsement on the motion. The two earlier endorsements dated April 27, 2020 and May 1, 2020, respectively, identified the need for additional materials, which have now been provided.

[2] The following is taken from the affidavits filed:

(a) the infant plaintiff, Bentley David Allen Hall (“Bentley”), was born on January 7, 2010. He suffers from autism and is non-verbal;

(b) on and after September 2015, Bentley was subjected to abuse at school in relation to his toileting, including being struck by the defendant, Shahnaz Tehseen;

(c) the neglect and assault of Bentley caused him emotional distress, fear of school and a regression in his development, including his toileting;

(d) Bentley changed schools and, after several months, recovered somewhat;

(e) Ms. Tehseen was later convicted of assault;

(f) the adult plaintiffs are Bentley’s father, David Thomas Hall, who also acts as Bentley’s litigation guardian, and Bentley’s mother, Megan Anne Clark (collectively the “Parents”). On behalf of Bentley and themselves, the Parents retained counsel to sue Ms. Tehseen, the Hamilton-Wentworth District School Board (the “HWDSB”) and Kim Collier, the principal of Bentley’s school;

(g) the Parents and their counsel agreed that legal fees would be charged on a contingency basis. By letter dated April 5, 2016, plaintiffs’ counsel confirmed the “30 per cent plus HST contingency fee arrangement” (the “CFA”). Other information and terms of the CFA were not set out in writing;

(h) assisted by their counsel, the plaintiffs obtained an award from the Criminal Injuries Compensation Board (the “CICB”) of $4,000 and in August 2019 negotiated a settlement with the defendants, which is set out in Minutes of Settlement dated April 15, 2020 (the “Settlement”);

(i) in the Settlement, the defendants agree to pay Bentley $58,000 as an all-inclusive figure for general and special damages, OHIP’s subrogated interest, and costs;

(j) as Bentley is a party under disability, court approval of the settlement is required by Rule 7.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

The Issues

[3] The issues to be determined on the motion are:

1. Should the Settlement be approved on behalf of Bentley: is it reasonable and in Bentley’s best interests?
2. Should the draft judgment, which sets out how the Settlement funds are to be disbursed, be approved?

Issue 1: Approval of the Settlement: is it reasonable and in Bentley’s best interests?

[4] Bently’s counsel and his litigation guardian have sworn and filed affidavits in which they state that the Settlement amount of $58,000 is reasonable, taking into consideration the following:

(1) the injuries inflicted and Bentley’s recovery from them;

(2) that the abuse occurred over a brief period of time;

(3) that when the allegations came to light, action was taken in a reasonable time;

(4) that Bentley was able to move to a new school where he is neither neglected nor abused;

(5) that recovery of damages from Ms. Tehseen would be uncertain; and

(6) that there was some risk that the HDWSB and/or the school principal would not be held vicariously liable for the actions of Ms. Tehseen.

[5] In the affidavits submitted by plaintiffs’ counsel and the litigation guardian, they also ask the court to approve the proposed judgment.

[6] Based on the facts outlined in the affidavits filed, and the assessment of counsel, echoed by Bentley’s litigation guardian and the Parents, I find that the Settlement is reasonable and that it is in Bentley’s best interests that it be accepted.

[7] The Settlement, as set out in the Minutes of Settlement dated April 15, 2020, is hereby approved on behalf of Bentley.

Issue 2: Approval of the Judgment

[8] The plaintiffs ask the court to approve and sign the proposed judgment that directs the disbursement of the $58,000 Settlement funds as follows:

(a) For the purchase of an iPad for Bentley, payment to Bentley’s litigation guardian: $ 1,500.00;

(b) To Grosso Hooper Law (“GHL”) in payment of litigation-related disbursements: $ 1,191.79;

(c) To GHL for payment of OHIP’s subrogated claim: $ 1,500.00;

(d) To GHL for repayment of the CICB award: $ 4,000.00;

(e) To GHL in payment of legal fees and HST: $15,461.79;

(f) Payment of the balance to a Registered Disability Savings Plan (“RDSP”) for Bentley: $32,946.42

[9] The court’s approval to the proposed judgment is required under rr. 7.08 and 7.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[10] In Mr. Hall’s affidavit as litigation guardian, he has attached a letter from Bentley’s teacher supporting the purchase of an iPad with Proloquo software and programs for Bentley. This purchase was also recommended by a Speech Pathologist with the HWDSB.

[11] I am satisfied that it is appropriate for me to exercise my discretion and to approve the proposed payment of $1,500 from the Settlement funds for the purchase of an iPad and programs.

[12] In addition, I also approve the payments to GHL for the litigation disbursements, OHIP and CICB, listed at para. 8 (b), (c) and (d), above.

Payment to a RDSP

[13] Before approving the plaintiffs’ request that the balance of the Settlement funds be paid into an RDSP and not into court, I must consider the application of r. 7.09(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[14] R. 7.09 (1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 requires that money payable to a person under disability under an order or a settlement be paid into court, unless a judge orders otherwise. As stated in the leading case of Hoad v. Giordano, [1999] O.J. No. 456 (Gen. Div.), “it requires an exceptional set of circumstances to prompt the court to exercise its discretion under rule 7.09(1).”

[15] In her affidavit, plaintiffs’ counsel states that Mr. Hall asks that the majority of the Settlement funds be paid into a RDSP given Bentley’s learning and other disabilities and his uncertain future prognosis and that paying the Settlement funds into an RDSP “is the most prudent option to ensure the money is there for Bentley when he requires it”.

[16] In his affidavit, Mr. Hall proposes that the balance of Bentley’s net settlement amount be paid into an RDSP, to be held there, accruing interest, until Bentley turns 18. Mr. Hall does not explain why putting the settlement funds into an RDSP benefits Bentley more than if the Settlement funds were paid into court, where they would also accrue interest to the benefit of Bentley. To support his request, Mr. Hall attaches as an exhibit to his affidavit a printout of the Government of Canada website concerning the benefits of an RDSP.

[17] The printed materials contain general information about RDSPs. From my reading, it appears that the Government of Canada might match annual donations made to an RDSP, to a limit of $3,500, and provided certain conditions are met. However, I cannot discern whether, and to what extent, Bentley’s situation would attract that government matching. For example, it is not clear to me that Bentley would receive future Government matching if the Settlement funds were deposited all at once. Without more information on how the RDSP would work to the benefit of Bentley, I cannot conclude that an exceptional set of circumstances exists that would justify the exercise of my discretion under r. 7.09 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. As I result, the default provisions of r. 7.09(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 must apply.

[18] I order that the net Settlement funds be paid into court. That Order is made without prejudice to the future right of Bentley’s litigation guardian or other authorized person, to seek a payment out of court for the benefit of Bentley, including to fund a purchase of an RDSP for Bentley.

Legal Fees

[19] The final disbursement contemplated in the proposed judgment is the payment of legal fees totaling $15,461.79 ($13,683 + HST $1,778.79).

[20] In the affidavits filed, it is clear that the parties intended that unless they recovered from the defendants, the plaintiffs would not be charged legal fees but would be responsible only to cover the litigation disbursements. If successful, the legal fees would be calculated on the basis of a percentage of the amount recovered, net of any amount paid for costs.

[21] The approval and enforcement of CFAs are governed by the Solicitors Act, R.S.O. 1990, c.S.15 (the “Act”) and O.Reg. 195/04 (the “Regulation”).

[22] S.28.1(4) of the Act requires that a CFA be in writing. Section 2 of the Regulation sets out in detail what must be included in the CFA. Plaintiffs’ counsel acknowledges that the CFA was not reduced to writing. I find that it does not comply with the Act or the Regulation.

[23] In their affidavits, plaintiffs’ counsel state that in discussions with the Parents they covered much, if not all, of what the Regulation requires to be set out in a CFA. They state that they discussed with the Parents how their legal fees would be charged and that the Parents opted to pay fees on a contingency basis, rather than on an hourly basis.

[24] I fully accept the evidence of counsel. I also accept the evidence of Mr. Hall that the Parents agreed to pay fees on a contingency basis. However, the Act is clear that a CFA shall be in writing. While non-compliance with the Act or Regulation may not automatically render void the CFA [1], it remains open to the court to decline to enforce the CFA.

[25] I am of the view that in the circumstances of this case, the failure to reduce the CFA to writing and to satisfy the requirements of the Act and the Regulation are sufficient reasons to decline to enforce the CFA.

[26] There are good reasons that a CFA must be in writing: it is important that the client have a written record of the terms of their retainer, which they may review at their leisure. The provisions of the Act and the Regulation are well-established. While plaintiffs’ counsel was able to recount in detail what the Parents were told, what is less certain is what the Parents may have understood or remembered of that discussion.

[27] In this case, the Parents were coping with a criminal assault on their young, autistic and non-verbal child, and the repercussions of that assault on Bentley and, no doubt, on the entire family. Added to that, the Parents are of limited means, which affected their ability to seek fair redress for the injuries suffered. Without in any way questioning what they were told and what was discussed when they met with their counsel, without a written CFA the court cannot be satisfied that the Parents fully understand and/or remember the detailed discussion they had concerning the CFA, or fully understood the protections under the Act and the Regulation.

[28] For the above reasons, I decline to approve the CFA. I also decline to approve the CFA for a second reason: I find that the proposed fees exceed an amount that is fair and reasonable. As such, I have assessed the legal fees on the usual basis.

[29] In my prior endorsement, dated May 1, 2020 [2], I provided a brief summary of the law concerning the court’s approval of a CFA under r.7.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which I will not fully repeat here. I do, however, refer below to paragraphs 13 and 14 of the Endorsement:

[13] The materials required in support of a motion for approval of a CFA was addressed by Hackland J. in Aywas v. Kirwan, 2010 ONSC 2278. At para. 3, he summarized a submission made by counsel for the Public Guardian and Trustee:

The obligation of plaintiff’s counsel is to provide the court with full and frank disclosure of the nature of the claim, damages of the plaintiff, the risk associated with the claim, particulars of the financial retainer, costs recovered, allocation of funds payable to all plaintiffs and costs payable by the plaintiffs, and the management of funds on behalf of the party under disability.

[14] In Lau v. Bloomfield [3], Spies J. concluded that for court approval to be meaningful, the motion record must include the following: copies of the retainer agreement, dockets, and hourly rates claimed; a list of the lawyers/law clerks who worked on the file; the total number of hours spent by each person on the file; for the lawyer-timekeepers their year of call; and for law clerks, whether they are a junior or senior clerk.

Analysis of the “Aywas” Factors

[30] In response to the May 1, 2020 Endorsement, plaintiffs’ counsel, in her affidavit of June 1, 2020, addressed the factors listed in Aywas v. Kirwan. She also provided a detailed breakdown of dockets, hourly rates, time spent, etc. The following findings flow from counsel’s affidavits:

a. The time expended

Plaintiffs’ counsel recorded time totalling 16.7 hours, of which, 3.4 hours related to the motion to approve the settlement. The balance of the time was recorded by law clerks and paralegals.

The fees associated with the docketed time of all timekeepers was $8,840. The proposed fees are $13,683, which exceeds the docketed time by over 35%.

b. The legal complexity of the matters

The matters were of usual complexity, albeit with some additional issues due to the interplay of the CICB and criminal proceedings involving Ms. Tehseen* and the assessment of damages suffered by Bentley, who is non-verbal.

* There is no suggestion in the materials filed that plaintiffs’ counsel played a role in the criminal proceedings.

c. The degree of responsibility assumed by the solicitor

The lawyers took on responsibility for the tort claim and the claim put before the CICB.

As mentioned above, I assume that the criminal proceedings involving Ms. Tehseen proceeded without the involvement of the plaintiffs’ counsel.

d. The monetary value

The monetary value of the matters in issue was relatively low, although significant to Bentley and his Parents.

e. The importance to the client

The matters involved were important to the clients from a financial perspective and also from the perspective of seeing criminal sanction for the setbacks suffered by Bentley as a result of the abuse.

f. The degree of skill

The lawyers showed a high degree of skill and competence and achieved a good result for Bentley.

Plaintiffs’ counsel makes reference to the $4,000 recovered at the CICB as well as the settlement achieved on the tort claim. However, it should be recognized that the settlement of the tort claim requires the full repayment of the CICB award.

g. The ability of the client to pay

Absent the Settlement, the Parents had a limited ability to pay legal fees. The Parents did undertake to pay the litigation disbursements but did not provide the requested retainer.

h. The clients’ expectations as to the amount of the fees

As noted above, the Parents did discuss fees with their counsel, which were referred to in a letter from plaintiffs’ counsel and discussed more recently in the context of the Settlement.

i. The financial risk assumed by the solicitor

Plaintiffs’ counsel did assume some financial risk, including a risk of non-payment, including fees respecting time spent on the CICB hearing, if there was no success or recovery in the tort action.

I find that the degree of risk taken by plaintiffs’ counsel to be minimal in that:

• the time docketed for the CICB hearing is less than 3 hours;
• the risk that the tort claim would not succeed was fairly low, particularly given that Ms. Tehseen was charged criminally and later convicted of assaulting Bentley;
• Bentley was a vulnerable plaintiff and a minor, who was assaulted during the school day, all of which mitigated in favour of a finding of liability against the defendants;
• the co-defendants were a school board, and a school principal who owed duties of care to their students;
• the settlement was achieved at a very early stage in the proceedings; and
• the Parents had agreed to be responsible for the disbursements.

j. The social objective of providing access to justice for injured parties

This objective was achieved, in part, through the assistance of counsel. As stated above, it was also important to the Parents that that some criminal sanction flowed from the wrong done to Bentley. There is no evidence or suggestion that the plaintiffs’ lawyers took part in the criminal trial and/or guilt of Ms. Tehseen.

Disposition

[31] When fixing legal fees to be paid by a party under disability, the court must determine an amount that is reasonable, proportionate to the amount recovered by the plaintiff under disability and “reflective of the value of the work performed as it has advanced and benefited the interests of the plaintiff under a disability.” [4]

[32] In my view, the proposed fees charged are somewhat high and disproportionate to the net amount that was recovered by Bentley. Both lawyers docketed their time at the hourly rate of $500. The fees sought would cover their docketed time, and the docketed time of their law clerks and paralegals, plus a premium of $4,843.

[33] Given the modest net amount recovered, the minimal risk, and the percentage of lawyer time spent on the approval motion, I conclude that a fair and reasonable fee, together with a premium to recognize a good result, is $10,500 plus HST of $1,365 for a total of $11,865.

[34] I have amended the draft judgment submitted with the motion materials to reflect the above and signed it. While the courts are suspended by reason of COVID-19, the Judgment is operative immediately and without formal entry at the court office.

L. Sheard J.

Date: June 9, 2020

[1] Hodge v. Neinstein, 2014 ONSC 4503 aff’d, in part, 2017 ONCA 494

[2] Hall v. Tehseen, 2020 ONSC 3535

[3] Lau v. Bloomfield at para. 35.

[4] Lau v. Bloomfield, supra, at para. 31, quoting Wilkins J., in Marcoccia v. Gill at para. 61.