Court File and Parties

Court File No.: CV-14-515442 Date: 2022-06-13 Superior Court of Justice - Ontario

Re: Kevin Shawn Daniel, a person under a legal disability and represented by his Litigation Guardian, Khadija Larry-Jajawei, Plaintiff And: Sukhdev Singh Dhaliwal and 1358068 Ontario Business Corporation aka Autolinx Express Inc., Defendants

Before: D.A. Wilson J.

Counsel: Joseph Campisi, for the Plaintiff

Heard: In Writing

Endorsement

[1] This Plaintiff Kevin Daniel (“Kevin”), a party under disability, filed a motion with the court for approval of a proposed settlement in his tort action stemming from the motor vehicle accident in which he was involved. He also filed an application seeking approval of his claims for statutory accident benefits arising from the accident.

[2] After the filing of the records with the Court, a request was received from counsel for the Plaintiff for the withdrawal of the records, because the Plaintiff was no longer a party under disability. On July 28, 2021, I issued an endorsement requesting further information from counsel and I sent the file to the Office of the Public Guardian and Trustee (“PGT”) for its review and comments.

[3] I received the report from the PGT and I have reviewed it. In response to a request from the PGT, Mr. Campisi provided a supplementary affidavit sworn July 9, 2021, along with additional materials.

Background

[4] A brief summary of the facts of the case is necessary in order to give context to the approval motions. The Plaintiff was born in 1995 and was involved in an accident on May 3, 2014 while he was a pedestrian and was struck by a car. As a result of the collision, Kevin suffered serious injuries including orthopedic injuries and a closed head injury. He was about to start a program at Humber College and was working as a clerk in a grocery store at the time of these events. Following the accident, Kevin tried to return to school but was unsuccessful due to problems arising from his head injury. He also had difficulty with physical activities as a result of his various fractures.

[5] Kevin was assessed by numerous specialists during the course of the lawsuit. In 2019, a capacity assessment determined that he was incapable of managing his finances or of instructing counsel. In the tort action, his sister acted as his Litigation Guardian.

[6] The motion for approval of the proposed settlement in the tort action was in the sum of $275,000 all inclusive, with $197,080 being allocated for damages and interest. The solicitor for the Plaintiff sought fees based on a contingency fee agreement that provided for payment of fees of 30% of damages. Approval of fees of $59,124 plus HST and disbursements in the amount of $31,547.68 for a total of $98,357.80 is sought in the tort action. In addition, there are outstanding accounts totaling $55,016.31 to be paid for various reports, it appears. One of these is an assignment to the Regional Municipality of Peel in the sum of $14,612.71. From this proposal, the Plaintiff would recover $135,163.05.

[7] In the application for approval of the proposed settlement of the accident benefits, the sum of $400,000 was put forward. From this, fees of 30% are sought, or $120,000 plus HST and disbursements of $12,941.98 for a total amount of $148,541.98. From this, there are outstanding accounts of $17,811.23 to be paid. It is proposed from this settlement Kevin would receive a net amount of $123,718.64. One of the live issues in the accident benefits matter was whether Kevin met the criteria for catastrophic designation, which would entitle him to enhanced benefits; the assessment undertaken by the Plaintiff’s examiners found that he did, while the defense assessor did not find he met the catastrophic requirements.

Analysis

[8] In the accident benefits matter, Kevin has both physical impairments as well as cognitive problems stemming from the accident. Had Kevin been deemed catastrophically impaired, as noted in the PGT report, he would have had significant amounts available to him: $954,403.51 in med/rehab; and $964,000 in attendant care. This settlement provides $250,000 in med/rehab and $75,000 in attendant care. This is a significant discount on settlement. I agree with the PGT opinion that there was a “reasonable prospect of success” on the catastrophic issue. Kevin is a young man with no prior problems and the medical evidence documents ongoing cognitive problems stemming from his head injury.

[9] A contingency fee agreement (“CFA”) is not binding on a party under disability until it is approved by the Court. It must be fair and reasonable in all respects for the Court to enforce it. The CFA must be fair at the time it was signed, and the fees must be reasonable at the time of the settlement: Raphael v. Lam, 2002 45078 (ON CA), [2002] O.J. No. 3605 (CA). If the Court determines the CFA is not fair and reasonable, it may disregard it and fix the fees.

[10] In this case, the CFA was signed by Kevin on June 8, 2014, fairly soon after his accident. It is unclear to me if he would have understood the agreement at the time that it was executed.

[11] With respect to the reasonableness requirement, the factors to be considered pursuant to Raphael, supra, are: time expended; complexity of the case; results achieved; and the risk assumed by the solicitor.

[12] The report of the PGT notes that the fee proposed in the AB file is $78,944.25 higher than the docketed time. In the tort action the fees proposed are $25,462 less than the docketed time on the file.

[13] I agree with the PGT that the legal complexity of the cases is average, particularly for a firm that specializes in Plaintiff personal injury claims.

[14] The PGT describes the results in the AB action as average. Based on the evidence filed on the motion, I would concur with this description. There was a significant compromise on the issue of the Plaintiff being declared catastrophic. On the tort action, I agree liability was contentious. However, the Defendant has the reverse onus under the Highway Traffic Act and must demonstrate that he did everything that a reasonable person would do to avoid the accident. That is not addressed in the affidavit of the Litigation Guardian or in the affidavit of solicitor. While I agree that liability was contentious and difficult, the fact that Kevin was not crossing at a pedestrian crosswalk does not mean that he would be found to be 100% at fault should the case proceed to trial. I note as well that solicitor Guirguis comments in virtually all of the paragraphs of her affidavit that her opinion is based on her review of the file. It is unclear to me what her precise involvement was in the file and whether she was the solicitor with carriage of the file.

[15] I do not believe the claim for economic loss was speculative. Kevin was enrolled in the police foundations course at the time of the accident. Given his physical limitations alone, it is clear he would not be able to work as a police officer, and he is a young man. He attempted to return to school on 2 occasions and was unsuccessful. According to the affidavit of solicitor, Kevin has not returned to any form of employment since May 2018. According to the July 2021 supplementary affidavit filed by Mr. Campisi in support of his request to withdraw the approval motion, Kevin has been working as an assistant in an HVAC company. Based on the evidence, it is clear he has a significant loss of income claim as a result of his injuries from the accident, in particular, his head injury. I would assess the tort settlement as average.

[16] The PGT recommends the CFA not be approved because it is not reasonable in all of the circumstances; I concur. I agree that a reduction in the percentages being charged as fees is appropriate and agree with the recommendation of the PGT that the fees be fixed at 25% of the recovery in the tort action and 15% of the recovery in the AB claim excluding costs paid. Of the $55,016.31 sought to be paid from the settlement funds, in my view, the $300 to Cesar Carranza for a loan and the amount to the Regional Municipality of Peel are not disbursements. The payment to Mr. Carranza is not explained and needs to be; Mr. Carranza is a solicitor at the Campisi law firm so it is not clear what the $300 associated with a loan is. Clearly, disbursements are not to be included in the calculation of the fee pursuant to a CFA.

[17] Fees of 15% on the accident benefits settlement are $60,000 plus HST and disbursements. Fees of 25% in the tort action calculated on the amount offered for claims and interest are $49,270 which I round up to $50,000 plus HST and disbursements.

The issue of how the funds should be paid

[18] The Plaintiff seeks an order that the funds be paid to Kevin as a lump sum; it is asserted that his capacity was assessed by Dr. Lightfoot on May 3, 2021 and he was found to be capable of instructing counsel, managing his finances and making his own decisions. In the motion and application records filed in March 2021, the proposed judgment in the tort action seeks payment of $135,163.05 to Kevin’s sister, who has acted as his Litigation Guardian. In the accident benefits action, it is proposed that the sum of $233,646.79 be paid to the Litigation Guardian for the benefit of Kevin. There is no plan for the use of the funds in the affidavit materials; the Litigation Guardian states simply that the funds will be used “to assist with his daily living expenses, ensure his safety and security and ensure that he has the appropriate support and rehabilitation to help him resume some normalcy as he moves forward with his life.” The affidavit of solicitor Guirguis is silent on the issue.

[19] The capacity of Kevin is not entirely clear. The medical documentation that has been filed with the Court demonstrates that he suffered a traumatic brain injury in the accident which has been described by his treatment providers as moderate in severity. He has displayed cognitive difficulties, forgetfulness, inability to manage his finances appropriately as well as depression and anxiety. While I appreciate that Kevin has made improvements since the accident and that the last assessor found that he had capacity to manage his finances, the most recent neuropsychological assessment by Dr. Valentin in April 2020 documented difficulties with memory and other cognitive symptoms, severe depression, and anxiety along with his physical problems. She opined the prognosis for improvement was poor.

[20] The solicitor for the Plaintiff has asked for the lump sum payments to be made to Kevin’s sister or alternatively, directly to Kevin. I am not prepared to accede to this request because I do not believe it provides adequate protection for Kevin, in light of his injuries and consequent vulnerabilities. In my view, at least part of the funds should be placed in a structure for Kevin; there also needs to be a plan set out for the funds that are not structured. Counsel is directed to obtain structure options along with a plan for the funds not structured based on the fees I have fixed and forward to me for my consideration.

Date: June 13, 2022