COURT FILE NO.: CV- 17-582871

DATE: 20210326

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JALAYAH VICTORIA ABBEY-PITOSCIA by her Litigation Guardian JENNIFER ABBEY and JENNIFER ABBEY Plaintiffs (Defendants by Counterclaim)

AND:

2279545 ONTARIO INC. O/A PARLIAMENT & DUNDAS FRESHCO Defendant (Plaintiff by Counterclaim)

BEFORE: Mr. Justice Chalmers

COUNSEL: A. Khan for the Plaintiffs (Defendants by Counterclaim)

T. Percival, for the Defendant (Plaintiff by Counterclaim)

HEARD: In writing

ENDORSEMENT

Overview

[1] The Plaintiff brings this Motion pursuant to R. 7.08 for an order approving the settlement of the claim, in the amount of $40,000 all-inclusive of claims, interest, costs, HST and disbursements.

The Incident

[2] This action arises out of an incident which occurred on March 9, 2017. The infant Plaintiff, Jalayah Victoria Abbey-Pitoscia (“Jalayah”) was with her mother, Jennifer Abbey in the Defendant’s grocery store. As they were walking in an aisle at the store, a refrigerator door became unhinged and fell onto Jalayah.

[3] Jalayah was taken by ambulance to the Hospital for Sick Children. The emergency record provides a discharge diagnosis of concussion and reflex anoxic seizures. Jalayah was seen by her pediatrician, Dr. Papadouris on March 18, 2017. The doctor notes that in the nine dates since the incident, Jalayah improved and is doing well. There was a report of transient chest pain. Dr. Papadouris referred Jalayah to cardiologist, Dr. Heilbut.

[4] Jalayah was seen by Dr. Heilbut on March 23, 2017. She noted that Jalayah fell on her abdomen and did not really lose consciousness. She was somewhat winded. Dr. Heilbut noted that since the incident, Jalayah was been fully active and has experienced no cardiac symptoms. She did not think this was a major injury.

[5] Jalayah was seen by Dr. Jovanovic, a child psychiatrist. She noted that Jalayah has been diagnosed with attention deficit hyperactive disorder. There is no evidence that the ADHD was caused by the accident. It is noted in the medical documentation that there is a family history of ADHD.

[6] Jalayah was seen by her family doctor, Dr. Haj. In his note dated November 20, 2019, he stated that she was examined and found to be in good health. Jalayah attended at the ER of HSC on April 2, 2020. She complained of constipation.

[7] At the present time Jalayah is continuing with her psychological treatments for ADHD. She is not on any medication. She is doing relatively well at school and is accomplishing her normal developmental milestones. She socializes normally with family and friends and participates in her usual activities.

[8] Based on the medical documentation it appears that Jalayah sustained very minor injuries as a result of the incident on March 9, 2017 when a refrigerator door fell on her. She was knocked to the ground and fell on her abdomen. Other than a report of muscular pain the next day and being winded there are no other reports of pain or effects of the incident. By the time she saw her pediatrician nine days later she had improved and was doing well. She was seen by Dr. Heilbut with respect to the report of her being winded. Dr. Heilbut noted that since that date she has been fully active. Jalayah has not had any other reports of symptoms or pursued any medical treatment since seeing Dr. Heilbut on March 23, 2017. There is no evidence that the ADHD is related to the incident.

Litigation History

[9] The Plaintiffs retained Sarfaraz Khan to act on their behalf. Jenifer Abbey entered into a contingency fee agreement pursuant to which the lawyer agreed to charge a contingency fee of 30% of the total settlement amount. In the amendment schedule to the agreement, the fee is calculated on the amount of recovery excluding any amount of the settlement that is specified for costs and disbursements.

[10] Counsel for the Plaintiffs issued the Statement of Claim on September 28, 2017. The Statement of Defence and Counterclaim is dated March 28, 2018. The Defendants denied liability and brought a counterclaim against Jennifer Abbey.

[11] The Plaintiffs offered to settle the action for $40,000 all-inclusive of claims, interest, costs, HST plus disbursements. By letter dated November 7, 2018, the Defendant accepted the Plaintiffs’ offer. The parties agreed to disbursements in the amount of $720. The parties entered into Minutes of Settlement on November 8, 2018.

Proposed Settlement

[12] Counsel for the Plaintiffs advises that the break-down of the proposed settlement is as follows:

Jalayah

All Damages $16,154.11

Pre-judgment interest $ 370.89

Costs, inclusive of HST $ 8,475.00

Total $25,000.00

Jennifer

All damages $ 9,692.47

Pre-judgment interest $ 222.53

Costs, inclusive of HST $ 5,085.00

Total $15,000.00

[13] Counsel for the Plaintiff proposes legal fees for Jalayah in the amount of $7,500, $975 in HST and disbursements of $362.50. The legal fees are based on 30% of the total settlement in the amount of $25,000.

Contingency Fee

[14] The fees are not calculated in accordance with the schedule to the contingency fee agreement. The schedule provides that the fee is to be calculated on the amount of recovery excluding any amount of the settlement that is specified for costs and disbursements. The amount of the settlement for Jalayah excluding the amount for costs is $16,525. At 30%, the contingency fee is $4,957.50. With HST, the total is $5,601.98. When deducted from the total amount of the settlement attributed to Jalayah, the net amount payable to her is $19,398.02.

[15] A contingency agreement is not binding on a party under disability until the agreement receives approval by the court. The fee agreement was not approved by the court before it was finalized and therefore the agreement must now be reviewed as part of the court approval process: Solicitors Act, R.S.O. 1990, c. S.15, s. 5(1). The agreement may be enforced only if it is in all respects fair and reasonable between the parties: Solicitors Act, s. 24.

[16] Contingency fee agreements are subject to careful scrutiny by courts. Only the court is entitled to determine whether the contingency fee agreement is fair and reasonable as between the parties: Jorisch v. Toronto Catholic School Board, 2017 ONSC 784, at para. 48. In determining whether the agreement is fair and reasonable, the court is to follow a two-step process. First, the fairness of the agreement is assessed as of the date it was entered into. The second step is to determine the reasonableness of the agreement as of the date of the hearing: Henricks-Hunter v. 81488 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496 at para. 20.

[17] I am satisfied that the contingency fee agreement of 30% is fair as of the date it was entered into. With respect to the reasonableness of the fee at the time of the hearing, counsel advises that a total of approximately 80 hours was expended on this file. The docketed time spent by the professional staff is a relevant factor to determine the reasonableness of the agreement. I am of the view that the contingency fee agreement was reasonable as of the date of the hearing.

RESP

[18] The Plaintiff proposes that the settlement funds be placed other than with the Accountant of the Superior Court of Justice. Jalayah has an existing Registered Education Savings Plan with Canada Trust; plan number: 660005015726. It is not clear how the RESP fund is to be invested. Based on the statement for the 2019 year, the rate of interest is 0.5451%. I do not know what would be paid to Jalayah if she does not wish to pursue post-secondary education. It is not clear whether the government will make a contribution to the RESP account. I have no information as to how the RESP plan compares if the money is invested with the Accountant for the Superior Court of Justice: Asselin v. Fournier, 2017 ONSC 5035 at para. 34.

[19] It will be necessary for the Plaintiff to establish that the payment into the RESP is in the best interests of the infant Plaintiff and is more advantageous than a payment to the Accountant of the Superior Court. I adjourn the motion for a period of 14 days to allow the Plaintiff to file additional material to support the request for the payment to the RESP rather than the Accountant of the Superior Court of Justice.

Disposition

[20] I am prepared to approve the settlement of Jalayah’s claim based on $25,000 inclusive of claims, interest, costs, and HST. I am also prepared to approve the fees of 30% of the settlement excluding costs, in the amount of $5,601.98 inclusive of HST. This results in a net payment to Jalayah of $19,398.02.

[21] I am not prepared to approve the payment of this amount into the RESP at this time. I adjourn this matter for 14 days to allow the Plaintiff to file additional material to establish that the payment to the RESP is more advantageous than a payment to the Accountant of the Superior Court.

[22] I remain seized.

DATE: MARCH 26, 2021