COURT FILE NO.: CV-18-445 (Guelph)
DATE: 2022 10 14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
SHANA BLACKBURN, SHANA BLACKBURN as Litigation Guardian for FORREST HARTLEY BLACKSMITH, SHANA BLACKBURN as Litigation Guardian for GWENDOLYN REBECCA BLACKSMITH, GREG SMITH, FLORENCE REBECCA BLACKBURN, ROBERT FORREST SMITH and DIANA MAE SMITH
P. M. Mann & S. Hayward, for the Plaintiffs
Plaintiffs
- and -
BASAK ARDALANI by her Estate Trustee NASROLLAH AZIZEDDIN, REBEKAH BRADSHAW, GUELPH MIDWIVES, DR. DANIEL REILLY, DR. MARK EASTERBROOK and GROVES MEMORIAL COMMUNITY HOSPITAL
A. Varjacic, J. Lilles & M. L. Gleason, for the Defendants
Defendants
HEARD: August 31, 2022
REASONS FOR DECISION RE: MOTION FOR APPROVAL OF SETTLEMENT
DALEY J.
[1] This action arises from very grave injuries sustained by the minor plaintiff Forrest Hartley Blacksmith (“Forrest”) during his birth. In this medical malpractice action the plaintiffs assert that Forrest’s injuries were caused by the negligence of the two defendant midwives as a result of their breaches of the applicable standards of care required of them during Forrest’s delivery.
[2] Following a private mediation and two pre-trial conferences before me, the action resolved.
[3] The action settled in the total amount of $9,750,000, which included the following amounts:
(a) assessable disbursements – $127,255.4
(b) subrogated interest of OHIP – $62,500
(c) subrogated interest of Manulife – $15,693.34
(d) imputed party and party costs – $954,455.12
(e) gross damages – $8,590,096.07
[4] Following the filing of a motion for approval of the proposed settlement on behalf of Forrest and at my request, counsel for the plaintiffs filed a supplementary affidavit dated July 21, 2022, clarifying the distribution of the net settlement amounts among the plaintiffs and as well responded to certain questions I raised with respect to the legal fees being charged. The proposed distribution of the settlement as provided for in the supplementary affidavit is as follows:
Damages
Fees & HST
Costs
Net Recovery
Forrest Blacksmith
$7,047,042.59
$2,189,868.48
$783,004.73
$5,640,178.84
Shana Blackburn
$809,009.82
$251,399.80
$89,889.98
$647,500
Greg Smith
$546,628.26
$169,864.73
$60,736.47
$437,500
Florence Blackburn
$62,471.80
$19,412.11
$6941.31
$50,000
Robert Smith
$62,471.80
$19,412.11
$6941.31
$50,000
Diana Smith
$62,471.80
$19,412.11
$6941.31
$50,000
Total
$8,590,096.07
$2,669,372.35
$954,455,12
$6,875,178.84
[5] The proposed legal fees to be charged have been calculated on the gross damage amount of $8,590,096.07.
[6] As to Forrest’s net recovery of $5,640,178.84, it is proposed that those monies be paid as follows: (a) $5,500,000 (to be placed in structured settlement) commencing June 2022, with monthly annuity payments of $3000 per month indexed at 2% increasing to $13,910.76 per month and indexed at 2% in June 2028 and continuing for life; lump sum of $100,000 to be paid out in August 2028; (b) $140,178.84 (to be paid out as a lump sum) – $30,000 to be used for home modifications and the remainder to be used for Forrest’s immediate equipment needs and care costs.
[7] Upon the receipt of the motion for approval of the settlement, along with the guardianship application filed pursuant to the Children's Law Reform Act, R.S.O. 1990, c. C.12, and prior to receiving the supplementary affidavit evidence delivered by counsel for the plaintiff in July, 2022, I referred this matter to the Office of the Children’s Lawyer (“OCL”) for review of both the motion for approval of the settlement and the guardianship application requesting that office’s views and opinions with respect to whether the settlement is fair and reasonable and in the interests of the minor plaintiffs and further for that office’s views and opinions as to the propriety and reasonableness of the fees for services rendered by counsel in accordance with the Contingent Fee Agreement entered into by the parties.
[8] A very detailed report was delivered by counsel Nicholas Hedley of the OCL setting out his views and opinions with respect to the issues raised by me, as well as the overall merits of the proposed settlement, the legal fees being proposed, the terms of the Contingent Fee Agreement (“CFA”) , as executed by the adult plaintiffs, and the guardianship application.
[9] Counsel with the OCL was also provided with a copy of the supplementary affidavit delivered by counsel for the plaintiffs.
[10] A copy of the report from counsel for the OCL shall be placed in the court file.
[11] Counsel for the OCL recommended approval of the proposed settlement, including the contingent fee sought by plaintiffs’ counsel as well as the guardianship application which had been filed.
[12] I am most grateful for the excellent review of the issues raised, by counsel for the OCL.
[13] I will address only briefly certain issues that I raised with counsel following receipt of the motion material.
[14] Having had the benefit of conducting the two pre-trial conferences leading to the proposed settlement of this action, I have more insight into the details of this case, including the issues of liability and damages.
[15] I am of the view that the proposed settlement of the action is fair and reasonable and it is in the interests of the minor plaintiff Forrest.
[16] Furthermore, I am satisfied that the terms of the CFA are fair and reasonable. The terms of the two-step test have been satisfied in that the fairness is evaluated at the time the agreement was entered into and the reasonableness is evaluated at the time of the hearing or the settlement of the action: Hendricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496.
[17] The CFA had provided that the plaintiffs’ counsel was to receive their fees on a contingent fee basis in a sum equal to 33 1/3% of the full amount recovered plus HST payable thereon along with all disbursements plus HST.
[18] The CFA further provided that the clients were entitled to receive any costs contribution or award on a partial or substantial indemnity scale, if they were entitled to costs.
[19] Following the second pre-trial conference, counsel for the plaintiffs agreed to reduce the contingent fee 27.5% of the amount recovered plus HST.
[20] As to the settlement of this action in terms of both liability and damages, I am of the view that the proposed settlement represents not only a fair and reasonable settlement but a resolution of a very complex and potentially risky case at trial.
[21] Counsel for the plaintiffs must be commended for the way they marshalled the necessary and critical evidence on the issues of liability and damages which brought about the fair resolution of this action.
[22] Given my involvement at the pre-trial conference stage in this matter, I see no need to recite in any detail my views on the issues of liability and damages as the results achieved are fair and reasonable and clearly in the interests of the minor plaintiff.
[23] Counsel for the OCL has approved the settlement subject to this court’s approval and as well has approved the guardianship application in respect of Forrest.
[24] I and further satisfied that the contingent fee amount, as reduced by counsel for the plaintiffs, is also fair and reasonable taking into account the complexities of this action both with respect to liability and damages, the time spent by counsel and the significant risk undertaken by the plaintiffs’ lawyers in taking on and prosecuting this action on a contingent fee basis.
[25] Forrest’s settlement, in terms of damages, also reflects the fact that there was a significant difference in the plaintiffs and the defendants’ views as to the appropriate life care plan and the compromise achieved by the settlement is both reasonable and recognizes the overall risks of this case proceeding to trial on all issues.
[26] Finally, as to the guardianship application, counsel for the OCL, assuming approval of the settlement, has also approved the Management Plan put forward in the guardianship application. Similarly, I am satisfied with the proposed Management Plan.
[27] In the result, the draft orders with respect to the judgement in favour of the minor plaintiff Forrest and approving the settlement and the guardianship application, shall issue as submitted by counsel for the plaintiffs. Copies of both orders will be delivered to counsel with copies to counsel for the OCL.
Daley J.
Released: October 14, 2022
COURT FILE NO.: CV-18-445 (Guelph)
DATE: 2022 10 14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
SHANA BLACKBURN, SHANA BLACKBURN as Litigation Guardian for FORREST HARTLEY BLACKSMITH, SHANA BLACKBURN as Litigation Guardian for GWENDOLYN REBECCA BLACKSMITH, GREG SMITH, FLORENCE REBECCA BLACKBURN, ROBERT FORREST SMITH and DIANA MAE SMITH
Plaintiffs
- and –
BASAK ARDALANI by her Estate Trustee NASROLLAH AZIZEDDIN, REBEKAH BRADSHAW, GUELPH MIDWIVES, DR. DANIEL REILLY, DR. MARK EASTERBROOK and GROVES MEMORIAL COMMUNITY HOSPITAL
Defendants
REASONS FOR DECISION
DALEY J.
Released: October 14, 2022