Court File and Parties

COURT FILE NO.: 00-CV-199551

DATE: 2020-12-04

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: REGINALD BARKER, JEAN-PAUL BELEC, ERIC BETHUNE (formerly Jean-Jacque Berthiaume), JOSEPH BONNER, WILLIAM BRENNAN by the Estate Trustee MAXWELL BRENNAN, STEPHEN CARSON, ROY DALE, MAURICE DESROCHERS by the Estate Trustee LORRAINE DESROCHERS, DONALD EVERINGHAM, JOHN FINLAYSON, TERRY GHETTI, BRUCE HAMILL, ELDON HARDY, WILLIAM HAWBOLDT by the Estate Trustee BARBARA BROCKLEY, DANNY A. JOANISSE, RUSS JOHNSON, STANLEY KIERSTEAD, DENIS LEPAGE, CHRISTIAN MAGEE, DOUGLAS McCAUL, BRIAN FLOYD McINNES, ALLEN McMANN, LEEFORD MILLER, JAMES MOTHERALL by the Estate Trustees DEBORAH KAREN MOROZ and JANE ALEXIS MARION, MICHAEL ROGER PINET, EDWIN SEVELS, SAMUEL FREDERICK CHARLES SHEPHERD and SHAUNA TAYLOR (formerly Vance H. Egglestone), Plaintiffs

– AND –

ELLIOTT THOMPSON BARKER, GARY J. MAIER and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, Defendants

BEFORE: E.M. Morgan J.

COUNSEL: Joel Rochon, for the Plaintiffs Meghan Bridges, for the Defendants, Elliot Thompson Barker and Gary J. Maier Ann Christian-Brown, for the Defendant, Her Majesty the Queen in Right of Ontario

HEARD: December 3 and 4, 2020

ADMISSIBILITY OF HALS/PALS APPROACH

[1] The Plaintiffs seek to qualify Ian Wollach as a forensic accountant to give expert evidence on the quantification of income loss for each of 11 Plaintiffs he has addressed in his Report dated August 24, 2020 and his Reply Report dated November 16, 2020.

[2] Among other things, the Reply Report responds to an expert report submitted on behalf of the Defendants by Josh Campbell and Jordan Roovers who are, respectively, an occupational therapist and a vocational rehabilitation assessor from a firm called Rehab First. I have not yet seen that report, but I gather from Mr. Wollach’s response to it and from the present debate with counsel that it employs the several surveys published by Stats Can – the Health and Activity Limitation Survey (HALS) and the Participation and Activity Limitation Survey (PALS), now called the Canadian Survey on Disabilities (CSD) – to categorize the mental health issues suffered by each of the Plaintiffs into categories of seriousness.

[3] The approach taken by Messrs Campbell and Roovers is what is in the literature referred to as the HALS/PALS approach. In short, this approach uses society-wide survey data compiled by Stats Can of people whose daily lives are limited because of a long-term condition or a health-related problem, including (but not limited to) a mental health condition. The data is often used by governments and private organizations to evaluate and plan various services, programs and policies for people with disabilities.

[4] The Defendants’ experts appear to want to use this statistical data as a factor in calculating the discount rate applied to the Plaintiffs’ long-term income losses. More specifically, I am advised that they will argue that this data is an important key to how to account for economic contingencies that apply to persons with the mental health conditions of the Plaintiffs and that might reduce (or, theoretically, increase – but that seems less likely) the present value of lost earnings. The data compiles societal average incomes for persons with various levels of disability and determines the average reduction in income which persons in its several categories earn.

[5] As counsel for the Crown has explained, an occupational therapist determines the functional capacity of the person being examined, and a vocational rehabilitation specialist determines the employability of that person. Mr. Wollach is neither of these. Counsel for the Doctors points out that in at least two previous cases where Mr. Wollach has been qualified to give expert evidence quantifying claimants’ income loss, courts have specifically said that he is not qualified to give evidence on the medical or disability/vocational issues that go into placing a given claimant into one of the HALS/PALS categories of disability: see Sherman v. Guckelsberger, 2008 CarswellOnt 7969 and Onley v Town of Whitby, 2020 ONSC 20.

[6] It is Mr. Wollach’s view that this Stats Can survey data is not particularly useful in calculating discount rates or in accounting for contingencies, as it is societal data which ignores individual circumstance. His method is not to pigeon-hole a given person into pre-set categories of disability, but to factor in any economic contingencies and variables with regard to an individual Plaintiff’s mental health condition as found in my judgment in the liability phase of this case and in the record before me. As an accountant with a specialty in valuing income trajectories, he says that he does factor contingencies into account, but that these depend on the specific circumstances of the individual. Statistical averages may be useful in fashioning social and economic policy at the macro level, but Mr. Wollach apparently does not find them useful in income quantification at the micro level.

[7] I agree that Mr. Wollach lacks the medical and vocational expertise to put the HALS/PALS data to use in the way that the Defendants’ experts apparently have done. I say this again with the caveat that I have not seen the Defendants’ experts’ report and their qualification is not at issue here. But it is clear, and Mr. Wollach himself agrees, that he is not qualified to give evidence relating any Plaintiff’s actual mental health condition or disability to a specific category or impairment in the CSD.

[8] Defendants’ counsel goes further than that, however, and submits that Mr. Wollach is not qualified to make any comment at all on the usefulness or appropriateness of the HALS/PALS approach to valuation matters. That is another level of analysis that I do not perceive as requiring specific medical or vocational expertise. Rather, it requires an understanding of valuation practice and modes of analysis. By way of analogy, one needs to be a violinist to play the violin part in a concert with a string quartet. But one does not need to be a violinist to explain why an instrument so suitable in one context will not be useful in another – say, in a piece for a marching band at college football halftime. And if that analogy doesn’t work, I fault counsel for timing this mid-trial motion so that it has to be written over lunchtime. In any case, the point is that there is a difference between using specialized skills and standing back to explain when and where specialized skills are called for.

[9] With his experience in valuing individual income loss, I do not see why Mr. Wollach cannot comment on the suitability of an individualized approach to discount rates and valuation over a statistical approach. Indeed, I would think that he might be better trained and better qualified to opine on the comparative merits of those approaches to income loss than an occupational therapist or a vocational rehabilitation specialist would be. This is an issue of valuation methodology, not one that requires medical or vocational knowledge.

[10] In the Sherman and Onley cases, Mr. Wollach tried to use the HALS/PALS data in his own analysis and was told that he is not qualified to do so. That is not what he does in his Reply Report in our case. Here, he has apparently re-thought the issue and explains why he does not use this Stats Can data. He may have a strong or a weak argument in that regard, but that is to be determined on the merits of the case. While Mr. Wollach does not have the professional experience to actually employ the HALS/PALS approach, he certainly has the experience to explain why he does not use it. Given prior case law, one might say that he is an expert in when not to use it.

[11] Mr. Wollach is a Chartered accountant. He has a B.Com. (with a major in economics) and MBA from the University of Capetown, SA. He was until 1990 the Director of the Pension Commission of Ontario, and has been a litigation accountant since the that time. He is now a partner at RSM, the fifth largest firm of its kind in North America, and heads up their team dealing with personal injury matters. He provided expert evidence on behalf of plaintiffs and defendants on roughly 200 occasions, mostly in the Ontario Superior Court but also in British Columbia and an assortment of global fora such as Florida, Israel, and the Cayman Islands. The subject matters of his many expert reports include commercial disputes, personal injuries, insurance disputes, long-term disability issues, and employment disputes.

[12] He is hereby qualified to give expert opinion evidence in accounting issues addressing quantification of damages in the nature of income loss valuation and associated economic or methodological issues with respect to the 11 Plaintiffs he has examined. His Report and Reply Report are admissible in evidence.

[13] For greater certainty, Mr. Wollach is not qualified to give medical or disability/vocational opinion evidence, and if anything in his testimony or his reports slips into those areas it will be struck out or disregarded.

Morgan J.

Date: December 4, 2020