Court File and Parties

Court File No.: CV-18-607250 Date: 20200720 Superior Court of Justice – Ontario

Re: RANA FARJAM-RAD, a minor by her Litigation Guardian, AMIR FARJAM-RAD and AMIR FARJAM-RAD, Plaintiffs And: SENECA COLLEGE OF APPLIED ARTS AND TECHNOLOGY and SKATE CANADA operating as CANSKATE LEARN TO SKATE PROGRAM, Defendants

Before: Sanfilippo J.

Counsel: Ryan M. Naimark, lawyer for the Plaintiffs

Heard: In Writing

Endorsement

[1] The Plaintiffs brought this motion for approval of a settlement of the claims advanced in this action on behalf of a minor, Rana Farjam-Rad (the “Minor Plaintiff”), through her litigation guardian, her father, Amir Farjam-Rad (the “Litigation Guardian”). The statement of claim alleged that on January 10, 2015, the Minor Plaintiff sustained a mid-shaft left fracture to her tibia, pain, tenderness and difficulty walking when she slipped and fell during skating classes (the “Accident”). The Minor Plaintiff sought damages for personal injury and Mr. Farjam-Rad advanced a derivative claim under the Family Law Act, R.S.O. 1990, c. F.1.

[2] The Plaintiffs sued Seneca College of Applied Arts in its alleged capacity as the “owner and occupier” of Skate Canada, operating as CanSkate Learn to Skate Program.

[3] The Plaintiffs’ lawyer deposed that this action settled after the service of the Statement of Claim, before delivery of a Statement of Defence, without examinations for discovery, for the all-inclusive sum of $45,000, subject to Court approval of the settlement proposed of the claims brought on behalf of the Minor Plaintiff.

[4] The details of the proposed settlement, as set out in the Lawyer’s Affidavit and in the Litigation Guardian’s Affidavit, were as follows:

(a) The settlement amount of $27,000 was proposed to be allocated to the Minor Plaintiff, from which she would receive the net sum of $15,661.17 after the following expenses are deducted from her proposed recovery: a. Legal fees of $5,750 (25%) plus HST of $747.50 for a total of $6,497.50; b. Disbursements of $988.37, inclusive of JST; c. “Former lawyer legal costs” of $230.24; d. OHIP subrogated claim of $2,341.14; e. Physiotherapy account of $1,281.58;

(b) The settlement amount of $18,000 was proposed to be allocated to Mr. Farjam-Rad for his derivative Family Law Act claim, from which he would net the sum of $12,967.64 after the following expenses are deducted from his proposed recovery: a. Legal fees of $3,375 (25%) plus HST of $438.75 for a total of $3,813.75; b. Disbursements of $988.37, inclusive of HST; c. “Former lawyer costs” of $230.24.

[5] By endorsement issued on December 11, 2019, I declined to grant the approval sought on the record filed, and directed that the moving party Plaintiffs file further affidavit evidence addressing the following:

(a) Medical evidence of the diagnosis of the injury sustained by the Minor Plaintiff in the Accident, the treatment of her injury, her state of recovery, any remaining or residual issues or complications and the prognosis for her recovery from injury; (b) copy of the affidavit sworn by the Litigation Guardian under Rule 7.02(2) of the Rules of Civil Procedure by which the Litigation Guardian was appointed at the time of the issuance of the Statement of Claim; (c) a further and better affidavit sworn by the Litigation Guardian in support of this motion for approval that sets out the “material facts and the reasons supporting the proposed settlement”, in compliance with Rule 7.08(4)(a) of the Rules of Civil Procedure; (d) an explanation by the Litigation Guardian: (i) why his derivative Family Law Act claim entitles him to a net recovery ($12,967.64) that approaches the net settlement payment proposed to his daughter ($15,661.17) who sustained a mid-shaft left fracture to her tibia, and; (ii) why the entirety of the OHIP subrogated claim was proposed to be deducted from the settlement amount attributed to the Minor Plaintiff; (e) an explanation by the Litigation Guardian of whether he is in a position instruct the allocation of settlement funds between himself and the Minor Plaintiff, in the circumstances of the proposed settlement; (f) in compliance with Rule 7.08(4)(b) of the Rules of Civil Procedure, an explanation by the lawyer of the basis on which the overall settlement of $45,000 is “fair and reasonable” in the context of the litigation as a whole; (g) evidence, in the form of source documents, supporting the amounts proposed to be deducted for disbursements, “former lawyer legal costs” and physiotherapy expenses; (h) an explanation by the lawyer of the basis on which fees totaling $12,287.99, inclusive of taxes and disbursements, ought to be approved on a settlement of $45,000 achieved before the close of pleadings, and before documentary production and examinations for discovery, supported by client ledger statements.

[6] The Plaintiffs filed a Supplementary Motion Record containing the supplementary affidavit of the lawyer for the Plaintiffs, and a supplementary affidavit of the Litigation Guardian. The lawyer and the Litigation Guardian provided further evidence in support of this motion for approval of the settlement involving the Minor Plaintiff and, in particular, addressed the issues that I identified earlier, as follows:

(a) Medical Evidence: Ms. Vaezzadeh’s Supplementary Affidavit explained that the Minor Plaintiff attended at North York General Hospital on January 10, 2015, the day of the Accident, and was determined to have sustained a mildly displaced oblique tibial, mid to distal diaphyseal fracture. A cast was applied. On January 29, 2015 and again on February 19, 2015, Radiology Consultation Reports showed no changes in alignment. On February 19, 2015, the Minor Plaintiff’s cast was removed, a splint was applied, and she began to weight bear. On April 23, 2015, Dr. Garbedian found that the Minor Plaintiff had a normal gait, normal toe and heel walking, a full range of motion in her knee and hip, normal rotational profile, stable knee, normal valgus of the knees, was able to single-leg jump with some mild weakness on the left compared to the right and scored 5/5 on formal strength testing of the lower extremity. I accept from this evidence, and the statement by the Minor Plaintiff’s lawyer that the Minor Plaintiff sustained a straight forward nondisplaced fracture that did not require surgery and that healed well, with no ongoing functional restrictions.

(b) Litigation Guardian Affidavit: On the initial filing of this Motion, the moving party Plaintiffs did not file a Litigation Guardian’s Affidavit and were thereby non-compliant with Rule 7.02(2) of the Rules of Civil Procedure. In his supplementary affidavit, the Litigation Guardian deposed that he is the Minor Plaintiff’s father and consents and wishes to be the Litigation Guardian for the Minor Plaintiff but that he “did not sign an Affidavit to appoint a Litigation Guardian” when this action was initiated. Although I do not in any way condone this action having been initiated and advanced through settlement negotiations without the Litigation Guardian first being appointed under Rule 7.02(2) of the Rules of Civil Procedure, Mr. Farjam-Rad’s supplementary affidavit meets the substantive requirements set out in Rule 7.02(2)(a)-(h) of the Rules of Civil Procedure, inclusive.

(c) Further and Better Litigation Guardian Affidavit: The Litigation Guardian has provided evidence of the Minor Plaintiff’s recovery from her injury. Her father deposed that the Minor Plaintiff has resumed all her activities, that she continues to participate in gym classes, that she is just as active now as before she fractured her leg, does not require any further treatment and is a “happy and healthy child”.

(d) Explanation of Allocation of Settlement: The proposed settlement of all claims is in the amount of $45,000, all inclusive. When this motion was initially filed, the moving party Plaintiffs had allocated $27,000 to the Minor Plaintiff and $18,000 to Mr. Farjam-Rad for his derivative claim under the Family Law Act. Further, the OHIP subrogated claim was initially proposed to be deducted entirely from the settlement proceeds otherwise payable to the Minor Plaintiff. The moving party Plaintiff proposed that the legal fees, disbursements and expenses would be apportioned equally between both the Minor Plaintiff and Mr. Farjam-Rad. This resulted in the Minor Plaintiff receiving a net settlement payment of $15,661.17 and Mr. Farjam-Rad receiving a net settlement payment of $12,967.64.

Re-Allocation: The moving party Plaintiffs have now proposed a re-allocation of the $45,000 payable in settlement so that the Minor Plaintiff will receive $35,000, gross of expenses and OHIP subrogated claim, and Mr. Farjam-Rad will receive $10,000, gross of expenses and OHIP subrogated claim. Additionally, the moving party Plaintiffs now propose that the OHIP subrogated claim be deducted equally between Mr. Farjam-Rad and the Minor Plaintiff. The legal expenses and disbursements continue to be deducted equally against both Plaintiffs. The Plaintiffs propose that the physiotherapy account be deducted against the recovery by the Minor Plaintiff because she received the treatments. This results in a net payment in settlement to the Minor Plaintiff in the amount of $23,136.74 and a net payment in settlement to Mr. Farjam-Rad in the amount of $5,492.07.

(e) Litigation Guardian’s Instruction of Settlement: I accept Mr. Farjam-Rad’s evidence that he considers that the proposed settlement is in his daughter’s best interest. He deposed that he has addressed his daughter’s interests above his own, including through the re-allocation of the proposed settlement.

(f) Appropriateness of Settlement: Ms. Vaezzadeh provided case authority for the quantification of the Minor Plaintiff’s claim for general damages for the injury sustained, supporting a quantification in the range of $25,000 to $30,000 for a fracture of the nature experienced by the Minor Plaintiff that did not result in ongoing functional restrictions. Ms. Vaezzadeh also explained that liability was not clear, and that there were risks in proceeding with the Minor Plaintiff’s claim. I accept these submissions as establishing that the amount of the proposed settlement is reasonable.

(g) Evidence of Costs of Former Counsel: Ms. Vaezzadeh provided evidence of the payment of $460.48 to the former counsel for the Minor Plaintiff. I am satisfied that this disbursement was reasonable and has been established.

(h) Appropriateness of the Proposed Legal Fees: Ms. Vaezzadeh explained that her firm was retained on a contingency basis in circumstances where there was risk in establishing liability. The case proceeded through pleadings and documentary assembly and settled prior to examinations for discovery. Ms. Vaezzadeh’s law firm voluntarily reduced the contingency fee from 33% to 25%. In these circumstances. I am satisfied that the lawyer’s fees of $12,287.99 inclusive of taxes and disbursements are appropriate and approved.

[7] Based on my assessment of the supplementary evidence filed by the moving party Plaintiffs, and the re-allocation of the settlement funds as proposed by the Litigation Guardian and recognizing the support of Ms. Vaezzadeh and the Litigation Guardian to the proposed settlement, as re-allocated, I find that the proposed settlement is in the Minor Plaintiff’s best interest. I thereby order as follows:

(a) the settlement of the Minor Plaintiff’s claim in the amount of $35,000, all inclusive, of the global settlement of all claims in this action in the amount of $45,000, all inclusive, is approved. (b) the legal fees of former counsel for the Plaintiffs in the amount of $460.48 and the legal fees of current counsel for the Plaintiffs in the amount of $10,311.25 (inclusive of HST) and disbursements of $1,976.73 are approved, with disbursements applied equally between both Plaintiffs and fees applied as 25% of recovered damages; (c) of the settlement proceeds, the amount of $23,136.74, all inclusive, shall be paid to the Accountant of the Ontario Superior Court of Justice for the benefit of the Minor Plaintiff, Rana Farjam-Rad, to be paid out to her when she obtains the age of majority or by further Order of this Court; (d) on the consent of the parties, the remainder of the claims in this action are dismissed, without costs.

[8] The form of draft Order filed by the moving party Plaintiffs must be further developed to contain terms 7(a)-(d), inclusive, ordered immediately above, and to address the following:

(a) the draft Order must recite, in detail, the affidavit evidence filed in support of this motion, both as filed on the initial submission of this motion in writing and the supplementary affidavit material. (b) the draft Order shall not attach the Contingency Fee Agreement and the Full and Final Release as schedules to the draft Order, as they are unnecessary. (c) the draft Order shall not contain a term that the affidavits filed in support of this motion are sealed, as no such relief is granted. (d) the draft Order must contain a term that the funds payable to the Minor Plaintiff shall be paid into Court, in accordance with Rule 7.09(1) of the Rules of Civil Procedure. (e) the draft Order must contain a term showing the Minor Plaintiff’s birth date and full address, in accordance with Rule 59.03(5) of the Rules of Civil Procedure. (f) the draft Order must contain a term directing that a copy of the Order be served on the Children’s Lawyer, in accordance with Rule 59.03(5) of the Rules of Civil Procedure.

[9] The Plaintiffs may deliver to me for consideration, by email to the Civil Motions Coordinator with a copy to my judicial assistant, a further form of draft Order, in both pdf and Word format, that sets out my determinations and is compliant with the requirements set out in this Endorsement.

[10] Notwithstanding Rule 59.05 of the Rules of Civil Procedure, this Order is effective from the date it is made and is enforceable without any need for entry and filing. The requirement of preparation, issuance and entry of a formal order is hereby dispensed with, in accordance with Rule 77.07(6) of the Rules of Civil Procedure.

SANFILIPPO J. Date: July 20, 2020