COURT FILE NO.: 590/18

DATE: 2022-10-24

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Savannah Tierney and Tianna Tierney by their Litigation Guardian Stacey, Stacey Tierney, Plaintiffs AND: Paul Kerr, Defendant

BEFORE: Justice R. Raikes

COUNSEL: Alex Wolfe, Luke Kilroy and Barbara Legate - Counsel, for the Plaintiffs Kevin Ross - Counsel, for the Defendant

HEARD: In writing

ENDORSEMENT

[1] This decision will deal with two motions: 1) for approval of a settlement for two minor plaintiffs pursuant to r. 7.08, and 2) for approval of plaintiff counsel’s fees and disbursements. I will deal with them in the same order.

Settlement Approval

[2] The plaintiffs seek an order:

1. Approving the settlement of the minors’ claims against the defendant;
2. Approving the allocation of damages as among the plaintiffs and the subrogated claim of the Ministry of Health and Long-Term Care (MHLTC);
3. Sealing from the public the materials filed for this motion;
4. If the sealing order is not made, a temporary sealing order with the opportunity for further submissions from counsel; and
5. An order dispensing with the requirement to serve any other person.

[3] This is a medical negligence action that arises from the defendant’s failure to prescribe antiviral medical to Savannah Tierney (Savannah) when she attended at St. Thomas Elgin General Hospital on April 29, 2013. Savannah was then seven months old. She was suffering a seizure from a common virus. The infection developed into encephalitis. Savannah suffered catastrophic and irreparable brain damage.

[4] Savannah is now 10 years old. She has the most severe form of cerebral palsy, hemiplegia, global developmental delay, and severe drug-resistant epilepsy. She has undergone major brain surgery to reduce the severity of her seizures and major hip surgery. She has no discernible speech, limited hearing, and minimal function on her left side from damage done to the right side of her brain. Her life expectancy is reduced. Experts disagree but the range is from 15-35 years.

[5] This matter was scheduled for trial on September 6, 2022. The key issues at trial were expected to be causation and damages. The litigation was hard fought. The defendants had numerous expert reports from recognized experts. That anticipated evidence created significant risk.

[6] The parties attempted mediation in June 2022. It was unsuccessful. They were able to reach a settlement at a judicial pre-trial with Justice Nicholson on July 15, 2022. The total settlement amount payable by the defendant is $14,000,000.

[7] The settlement amount breaks down as follows:

a. Costs, inclusive of HST - $1,443,302.75 b. Disbursements, inclusive of HST - $284,106.53 c. Damages - $12,272,590.72.

[8] The allocation of costs ($1,443,302.75) is based on a formula: 15% x the first $1million + 10% x the remainder. The disbursements were agreed upon with the defendants.

[9] The proposed allocation of damages is as follows:

Savannah Tierney - $11,370,086.85 Stacey Tierney (mother) - $723,783.83 Tianna Tierney (sister) - $29,287.23 MHLTC - $133,105.05.

[10] Stacey Tierney has acted as Savannah’s full-time caregiver since birth. Those duties increased exponentially following April 2013.

[11] I am satisfied that the amount of damages allocated to Stacey Tierney is fair and appropriate based on the evidence provided, the severe impacts on her from the harm to Savannah, and her caregiving responsibilities in the past and going forward.

[12] The claim for Tianna is derivative of the claim for Savannah. It is an FLA claim for the loss of care, guidance, and companionship arising from the injury/damage sustained by her sister. The allocation to Tianna is reasonable.

[13] I am satisfied that the settlement is fair, reasonable and should be approved. In coming to that conclusion, I have taken into account the risks at trial. The defendants obtained expert reports that cast doubt on whether Savannah’s outcome would have been any different, i.e. that by the time she presented at the hospital and first saw Dr. Kerr, the virus was already far advanced so that the anti-viral medication would have been too little, too late. The defendant also challenged through experts Savannah’s life expectancy, the prospect for future gains, the cost of care etc.

[14] The plaintiffs had their own experts and if the evidence of those experts was preferred, the damages would likely have been higher than the settlement amount. However, there was no certainty as to the outcome at trial. There was significant risk on both sides. The settlement achieved is a reasonable compromise that is in the children’s best interests.

Proposed Plan for Settlement Funds for Children

[15] The plaintiffs propose that the damages allocated to Savannah be used as follows:

1. $8 million structured that will pay $240,000 per year in lifetime monthly payments, indexed at 2% per year, and $100,000 lump sum payments payable every five years indexed at 2% per year to account for upgrades, replacements, and contingencies;
2. $500,000 paid into court to the Accountant of the Superior Court, payable by judicial fiat which is intended to provide upfront funding of Savannah’s current needs pending approval of a plan of management
3. $35,000 payable to Stacey Tierney to make immediate payments on Savannah’s behalf;
4. $1,602,612.13 in cash to be invested in accordance with a plan of management as a hedge against inflation and unforeseen expenses.

[16] It is contemplated that Stacey Tierney will retain counsel for the purpose of being appointed guardian of Savannah’s property. As part of that process, she will have to file a comprehensive management plan. She will be required to account for all monies received and expended on Savannah’s behalf during her guardianship and during the time period between receipt of the settlement funds and being granted guardianship. She stands in the role of a fiduciary.

[17] The guardianship application should be brought within 90 days of approval of the settlement. The Public Guardian and Trustee should be provided with a copy of the application and management plan(s) for comment.

[18] The proposed structure is appropriate and is approved. The same applies to the $35,000 paid to Stacey Tierney to pay for items needed immediately by Savannah, and the $500,000 to be paid to the Accountant of the Superior Court.

[19] However, I do not agree with the proposal that $1,602,612 be held in cash. Instead, I order that $1,450,000 of those funds shall be paid into court to the Accountant of the Superior Court pending court approval of the plan of management. Those funds can likewise be accessed by judicial fiat if needed sooner. The remainder, $152,612, may be held in cash as proposed.

[20] With respect to Tianna’s money, Stacey Tierney deposes that Tianna is in the sixth grade and receives tutoring to improve her scholastic abilities. The monthly tutoring expenses are $300. It is proposed that a portion of her settlement funds will be used to fund her tutoring and the bulk will be placed in low-risk investments like GICs and bonds until she reaches age of majority.

[21] I direct that $20,000 of Tianna’s settlement funds be paid to the Accountant of the Superior Court to be paid to her when she reaches the age of majority. The remaining funds may be used for her tutoring and other extraordinary/special expenses.

Sealing Order

[22] The moving parties seek an order permanently sealing the materials filed for this motion. The parties agreed to keep the settlement confidential subject to an order of the court. Stacey Tierney deposes that she wants the material sealed to protect their privacy and to prevent victimization that might happen from the settlement becoming public knowledge. She is also fearful that the children’s father will try to extract money from his children. She also refers to the privileged communications with her counsel and the desire to maintain privilege.

[23] Sealing orders are contrary to the open court principle. In Carroll v. Natsis, 2020 ONSC 3263, Carthorn J. declined a sealing order for an infant settlement because it is contrary to the open court principle: see paras. 5-7. I agree with her analysis and adopt it here.

[24] I observe that the vast majority of the evidence contained in the materials filed for this motion are reports and information that would, in all likelihood, have been adduced at a public trial. The settlement has been approved. Plaintiffs’ counsel candour as to the risks posed by a trial is not surprising and would have been evident from the defence evidence if the matter had been tried. The reference to communications with Ms. Tierney is minimal and necessary in these circumstances. It does not amount to a waiver of privilege generally.

[25] A sealing order is not appropriate to prevent vague unknown risk of victimization nor to keep the settlement secret from the children’s father who has not been part of their lives for a long time. There is no compelling interest at risk such that it would be appropriate to make a sealing order.

[26] I do not need further submissions from counsel on this issue.

[27] The request for a sealing order is declined.

Counsel Fee

[28] Court approval is required for plaintiffs’ counsel’s fee in respect of the minors: Ontario Regulation 195/04, Solicitors Act, R.S.O. 1990, c. S. 15.

[29] A contingency agreement will be approved by the court on behalf of a person under a disability where the court is satisfied that the agreement is fair and reasonable: Solicitors Act, s. 24.

[30] This inquiry requires that the court be satisfied that the retainer agreement was fair on the date it was made, and it is reasonable on the date of the approval hearing: Hendricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496.

[31] I am satisfied on the evidence filed that Stacey Tierney fully understood and appreciated the nature of the agreement that she executed. That contingency agreement is dated January 5, 2016.

[32] The contingency agreement allows counsel to charge up to 40% of damages recovered if the matter settles after 90 days before the first date set for pre-trial. The settlement was reached after that time.

[33] Ms. Legate is charging Stacey Tierney 30% on her allocated share of damages. No court approval is required for same.

[34] Ms. Legate seeks approval to charge Savannah and Tianna,

a. Savannah: $2,274,017.37 plus HST of $295,622.60. Disbursements of $263,213.86 inclusive of HST. b. Tianna: $5,886.56 plus HST of $765.25. Disbursements of $681.36 inclusive of HST.

[35] The proposed net recovery for the minor plaintiffs is:

a. Savannah: $10,137,612.13 b. Tianna: $26,242.40.

[36] The aggregate fee recovered by Plaintiffs’ counsel would be $2,526,896.53 plus HST of $328,496.55 which totals $2,855,393.53. The aggregate of the proposed minor plaintiffs’ fees is $2,279,903.93 plus HST.

[37] The matter was very important to the parties. It was complex, hard-fought litigation. Counsel took on significant financial risk. The outcome was far from certain. Numerous experts in differing fields were engaged. Counsel acted diligently in prosecuting the action and obtained a good result.

[38] Counsel are experienced litigators with expertise in personal injury matters. The out-of- pocket expenses incurred were borne by counsel. The pages of records produced number in the thousands. There were six days of examination for discovery, two pretrials, and two mediations.

[39] The aggregate value of docketed time is $628,838.05. The individual hourly rates are not provided but it is evident that this was a major case and resources were expended accordingly.

[40] I am satisfied that the proposed fees for the minor children are fair and reasonable and are approved. Likewise, the disbursements incurred are appropriate and reasonable. They are approved.

[41] Counsel asks that the motion materials for the fee approval be sealed. I decline to do so. The open court principles apply. There is no compelling reason to seal this material, at least no reason sufficient to trump the open courts principle.

Conclusion

[42] For the reasons above, I conclude as follows:

1. The settlement is approved.
2. The proposed allocation of damages as between plaintiffs is approved.
3. The proposed use of funds for the minor plaintiffs is approved with the following changes: I. For Tianna - $20,000 of the net settlement funds will be deposited with the Accountant of the Supreme Court of Ontario until she reaches the age of majority. II. For Savannah – In addition to the $500,000 proposed to deb deposited with the accountant, a further $1,450,000 shall be deposited with the Accountant pending court approval of the management plan. The plaintiff, Stacey Tierney, will apply for guardianship of the property of Savannah within 90 days. That application will include a detailed management plan. The application and plan will be provided to the Public Guardian and Trustee for comment and input.
4. The request for a sealing order for the settlement approval is declined.
5. The contingency agreement is approved as fair.
6. The proposed allocation of legal fees as between the plaintiffs is approved.
7. The proposed legal fees and disbursements with HST as applicable charged to the minor plaintiffs is approved.
8. The request to seal the motion materials for approval of the counsel fee is declined.

[43] Should counsel have any questions arising from this decision, they may submit same in writing through the Trial Coordinator.

Justice R. Raikes

Date: October 24, 2022