COURT FILE NO.: CV-12-459089
DATE: 20221222
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SEAN OMAR HENRY, personally and as Estate Trustee for the Estate of SANDY ROBINSON
Plaintiffs
AND:
DR. MARSHALL ZAITLEN
Defendant
BEFORE: Justice A.A. Sanfilippo
COUNSEL: Michael D. Hodgins, for the Plaintiffs
Stephanie Sugar and Christine Windsor, for the Defendant, Dr. Marshall Zaitlen
HEARD:
(By videoconference): November 18, 2022
ENDORSEMENT
(Rulings on Settling the Judgment)
Overview
[1] Upon the jury rendering its verdict in this trial on December 13, 2022, the Defendant, Dr. Marshall Zaitlen, opposed the Plaintiffs’ motion for judgment on the basis of Rule 52.08(1)(b) and (c) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. I endorsed the Amended Trial Record as follows:
The trial in this action initiated with a jury on November 8, 2021 and continued uninterruptedly to today. The jury rendered its verdict today, which is now marked as Exhibit 63, and is hereby endorsed on this Amended Trial Record in accordance with Rule 52.09.
The Plaintiffs move for judgment in accordance with the jury verdict. This motion for judgment is opposed by the Defendant on the basis of Rule 52.08(1)(b) and (c). There shall be a hearing on this motion on January 19, 2022. The parties agree that there shall be a motion on the legal issues relating to collateral benefits and subrogated claims, which shall be heard at the same hearing.
The issue of costs is reserved to the determination of the motion under Rule 52.08(1)(b) and (c).
[2] At the hearing on January 19, 2022, the parties stated that they settled the Defendant’s motion under Rule 52.08 by agreeing that the jury’s verdict in answer to Question 3(f) (Past Value of Loss of Housekeeping and Maintenance) would be reduced, on consent, from the amount of $119,641.60 to the amount of $58,275.20. Additionally, the parties stated that they reached a settlement of the subrogated claims brought by the Plaintiffs, being the Ontario Ministry of Health claims (past losses and future losses) and the Manulife claim, in the total settlement amount of $71,852.
[3] This left for determination two issues: (a) the Defendant’s motion to deduct long-term disability benefits and pension contribution benefits from the jury’s award for past income loss (the “Benefits Deduction Motion”); and (b) the issue of costs of the jury trial. Before the Benefits Deduction Motion could be argued, the parties sought a ruling on the admissibility of certain evidence tendered by the Plaintiffs on the Benefits Deduction Motion. On January 19, 2022, I implemented a timetable for the hearing of the Defendant’s motion to exclude aspects of the Plaintiffs’ evidence on the Benefits Deduction Motion. This motion was determined by Endorsement issued on February 14, 2022. The Benefits Deduction Motion was determined on May 5, 2022.[^1] As the parties could not agree on the issue of costs of this jury trial, the issue of costs was determined on May 19, 2022.[^2]
[4] On September 14, 2022, the parties reported that they were not able to settle the form of Judgment and requested a hearing, which was conducted by videoconference on November 18, 2022. The parties stated that two issues were impeding the settling of the Judgment and thereby required determination, as follows:
(a) The wording of the term of the Judgment that addresses the reduction in the jury’s award for damages for Past Value of Loss of Housekeeping and Maintenance for the Estate of Sandy Robinson (the “Estate”).
(b) The applicable rate of pre-judgment interest payable on general damages.
[5] Having now heard and considered the parties’ submissions, I will explain my determination of these two issues.
A. The Term Regarding Reduction in the Loss of Housekeeping Award
[6] The Plaintiffs proposed the following term to set out the reduction in the jury award for the Estate’s claim for past loss of housekeeping and maintenance (“Past Loss of Housekeeping”) from $119,641.69 to $58,275.20:
THIS COURT ORDERS that the jury’s verdict in answer to question 3(f) (Past Value of Loss of Housekeeping and Maintenance) is reduced, on consent of the parties, from the amount of $119,641.60 to the amount of $58,275.20.
[7] The Defendant proposed the following term:
THIS COURT ORDERS pursuant to R. 52.08 that the verdict assessing damages for Past Value of Loss of Housekeeping and Maintenance for the Estate of Sandy Robinson in the amount of $119,641.60 be set aside, and on consent of the parties an amount of $58,275.20 shall be substituted.
[8] The disagreement on the wording of this term focused on the Defendant’s submission that this term of the Order should reflect that it arose from a resolution of the Defendant’s objection to judgment under Rule 52.08, and the settlement of their proposed motion under this Rule. The Plaintiffs submitted that the reduction of the jury verdict on the award for Past Loss of Housekeeping could not be ordered under Rule 52.08, so the term should only reflect that the parties agreed to a reduction in the award on this damage claim without reference to the Rule.
[9] I accept the Defendant’s submission that the term should refer to Rule 52.08. The objection to the entry of judgment at the conclusion of the trial was based on Rule 52.08, as recorded by my Endorsement on the Amended Trial Record. The parties’ settlement, wherein they agreed to reduce the amount of the jury award for Past Loss of Housekeeping from $119,641.60 to $58,275.20, was within the context of a pending motion under Rule 52.08. I see no reason why the term should not reflect that the settlement derived from the parties’ agreement to settle the Rule 52.08 motion. However, the Defendant’s proposed term is ambiguous in that it allows for the interpretation that the parties’ consent was limited to the amount of the reduction and that the order that the verdict be set aside was rendered by the Court after argument. This was not the case as both elements were on consent. In my view, to foster clarity, this term should be as follows:
THIS COURT ORDERS pursuant to R. 52.08 that, on the consent of the parties, the verdict assessing damages for Past Value of Loss of Housekeeping and Maintenance for the Estate of Sandy Robinson in the amount of $119,641.60 be set aside and an amount of $58,275.20 shall be substituted.
B. The Applicable Rate of Pre-Judgment Interest on the Non-Pecuniary Damages
(a) The Parties’ Positions
[10] In their Amended Statement of Claim, the Plaintiffs claimed, in paras. 1(c) and 2(c), prejudgment interest in accordance with s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”). The Plaintiffs submitted, on the basis of s. 128(2) of the CJA and Rule 53.10, that the pre-judgment interest rate on the damages awarded by the jury for non-pecuniary loss should be 5% per year.
[11] The Defendant disagreed, submitting that a 5% award for pre-judgment interest on the awards for non-pecuniary damages is inappropriate and would amount to overcompensation. The Defendant submitted that the pre-judgment interest rate on the non-pecuniary damages ought to be 1.3%, consistent with the pre-judgment interest rate applicable at the time that the Statement of Claim was issued, pursuant to ss. 127 and 128 of the CJA. Alternatively, the Defendant submitted that the pre-judgment interest on the non-pecuniary damages should be set at a rate of 1.8%, being the average market rate of the Consumer Price Index from July 2010 to December 31, 2021.
[12] While the parties disagreed on the applicable pre-judgment interest rate, they agreed on its arithmetic calculation. The jury awarded Mr. Henry $204,500 in non-pecuniary general damages and awarded the Estate $100,000 in non-pecuniary damages for loss of care, guidance and companionship under the Family Law Act, R.S.O. 1990, c. F.3, s. 61. The parties agreed that the arithmetic calculation of the pre-judgment interest would be as follows:
(a) If the 5% pre-judgment interest rate under Rule 53.10 and s. 128(2) of the CJA is applicable, Mr. Henry would be entitled to $118,301.85 in pre-judgment interest on his award of non-pecuniary damages, and the Estate would be entitled to $57,849.32 on its award of non-pecuniary damages.
(b) If the 1.3% prejudgment interest rate under ss. 127 and 128 of the CJA is applicable, Mr. Henry would be entitled to $30,758 in pre-judgment interest on his award of non-pecuniary damages, and the Estate would be entitled to $15,041 on its award of non-pecuniary damages.
(c) If the Consumer Price Index rate of 1.8% were applied, Mr. Henry would be entitled to $42,559 in pre-judgment interest on his award of non-pecuniary damages, and the Estate would be entitled to $20,826 on its award of non-pecuniary damages.
[13] I turn now to the applicable legal principles pertaining this issue.
(b) Applicable Legal Principles
[14] Section 128(1) of the CJA provides that “a person who is entitled to an order for the payment of money is entitled to claim and have included in the order an award of interest thereon at the prejudgment interest rate, calculated from the date the cause of action arose to the date of the order.” There is no disagreement here that Mr. Henry and the Estate are entitled to an award of prejudgment interest on the non-pecuniary damages awarded by the jury.
[15] Section 128(2) of the CJA provides that “[d]espite subsection (1), the rate of interest on damages for non-pecuniary loss in an action for personal injury shall be the rate determined by the rules of court.” Rule 53.10 provides that the “prejudgment interest rate on damages for non-pecuniary loss in an action for personal injury is 5 per cent per year.”
[16] However, s. 130(1) of the CJA states that “[t]he court may, where it considers it just to do so, in respect of the whole or any part of the amount on which interest is payable under section 128 or 129” of the CJA, disallow interest, allow interest at a lower or higher rate than that provided by those sections, or allow interest for a period other than that provided by those sections. When considering, in the exercise of its discretion, an interest computation different than that provided by ss. 128 or 129 of the CJA, the court shall take into account the factors set out in s. 130(2) of the CJA. These factors include: changes in market interest rates (s. 130(2)(a)); the circumstances of the case (s. 130(2)(b)); and “any other relevant consideration” (s. 130(2)(g)).
[17] In MacLeod v. Marshall, 2019 ONCA 842, 148 O.R. (3d) 727, the Court of Appeal held that the trial judge erred in awarding prejudgment interest at the rate of 5% without taking into consideration s. 130(2) of the CJA. In that case, the jury had awarded pecuniary and non-pecuniary damages on the finding that the defendant was liable for sexual abuse. In consideration of the rate of prejudgment interest for the non-pecuniary damages, the trial judge found that subsection 258.3(8.1) of the Insurance Act, R.S.O. 1990, c. I.8, which renders s. 128(2) of the CJA inapplicable to an action for personal injury arising from the use or operation of an automobile, does not apply to a claim in sexual abuse. On this basis, the trial judge concluded that the prejudgment interest rate of 5% was applicable.
[18] The Court of Appeal held that the trial judge was correct to conclude that s. 258.3(8.1) of the Insurance Act did not apply, but that the conclusion that it thereby followed that the prejudgment interest rate of 5% for non-pecuniary damages was applicable was not correct in law. Rather, the Court of Appeal stated, at para. 54, that the trial judge ought to have considered the factors listed in s. 130(2) of the CJA:
[The trial judge] should have taken into account the factors listed in s. 130(2) of the CJA, including the changes in market interest rates. He did not. In so doing, he placed no weight or insufficient weight on the consideration of market interest rates.
[19] The Court of Appeal found, at para. 55, that interest rates during the period from when the action was initiated (2012) to the date of judgment (2018) “were low and no issue was taken by the respondent with the 1.3 per cent requested to keep pace with the low rates, save for the argument that s. 258.3(8.1) does not apply.” Accordingly, the Court of Appeal set aside the award of prejudgment interest at 5% and ordered that the prejudgment interest on non-pecuniary damages be calculated at 1.3%.
(c) Analysis
[20] The Plaintiffs submitted that MacLeod is distinguishable because it is a historical sexual abuse case and should be restricted to a finding that the trial judge erred in concluding that s. 258.3(8.1) of the Insurance Act precluded the exercise of judicial discretion in the consideration of interest. I do not accept these submissions as they do not, in my view, fully recognize the principles stated in MacLeod and, as importantly, the basis for those principles.
[21] In MacLeod, at para. 48, the Court of Appeal built on the finding in Stellarbridge Management v. Magna International (2004), 2004 CanLII 9852 (ON CA), 71 O.R. (3d) 263 (C.A.)., leave to appeal refused, [2004] S.C.C.A. No. 371, at para. 85, that “[t]rial judges enjoy a wide discretion under s. 130 of the CJA to allow pre- or post-judgment interest at a rate higher or lower than the rate of interest prescribed by the CJA where they consider it just to do so”. This discretion is not limited to any discrete category of cases but is applicable to all cases.
[22] Further, in MacLeod, at para. 50, the Court of Appeal applied the principle stated in Cobb v. Long Estate, 2017 ONCA 717, 416 D.L.R. (4th) 222, at para. 86, that the goal in the consideration of the applicable interest rate is to ensure that the injured party is compensated fairly:
Interest rates fluctuate over time and it only makes sense that the interest rates set by the court should reflect these changes as well. The goal is to fairly compensate an injured party and to restore to him or her, so far as money is able to do, all that he or she has lost as a result of the injury – but neither too much, nor too little.
[23] Importantly, the Court of Appeal applied, at para. 46 of MacLeod, Justice Matheson’s finding in Awan v Levant, 2015 ONSC 2209, aff’d 2016 ONCA 970, 133 O.R. (3d) 401, at para. 27, that the “mischief that gave rise to subsection 128(2) of the CJA] is no longer served by a 5% rate given the interest rate climate during the time relevant to this case.” Subsection 128(2) was enacted to lower the interest rate that would otherwise be applicable to non-pecuniary damages due to the high interest rates prevailing at that time. It was not intended to raise the prejudgment interest rate beyond prevailing market rates. This is seen through the enactment of s. 258.3(8.1) of the Insurance Act, applicable to motor vehicle cases. And I am not persuaded by the Plaintiffs’ submission that the failure to repeal Rule 53.10 upon or after the enactment of s. 258.3(8.1) of the Insurance Act means that the legislative intention was to remove the 5% interest for non-pecuniary damages for only motor vehicle cases. The application of Rule 53.10 and s. 128(2) of the CJA has always been, and remains subject to the court’s exercise of discretion under s. 130 of the CJA.
[24] In my view, the principles set out in MacLeod, and the cases affirmed by it, are directly applicable to my determination of the applicable rate of prejudgment interest for the non-pecuniary damages awarded by the jury to Mr. Henry and Estate. My task, then, is to determine the prejudgment interest rate that fairly compensates Mr. Henry and the Estate, in accordance with s. 130(1) of the CJA, through analysis of the factors listed in s. 130(2) of the CJA. This analysis leads to the conclusion that the applicable rate of prejudgment interest for non-pecuniary damages shall be set at 1.3%. I will explain why.
[25] Applying the 5% interest rate would result in overcompensation to Mr. Henry and the Estate. This finding is not based solely on the observation that the computation of prejudgment interest at 5% would have the effect of awarding prejudgment interest at more than half of the value of the non-pecuniary damage awards. The 5% interest rate is more than double the actual market Consumer Price Index from 2010 to 2021, which averaged approximately 1.8%. In July 2010, the date that Mr. Henry’s cause of action arose, the prejudgment interest rate for pecuniary damages was 0.8%. On the date that the Statement of Claim was issued, the rate was 1.3% and it has historically been low and far less than the 5% rate. This is similar to the finding in MacLeod, wherein the Court found that for the period from 2012 to 2018 the CJA interest rate of 1.3% kept pace with market rates.
[26] The Plaintiffs submitted that even though the market rate of interest was lower than 5% throughout the period under analysis, Mr. Henry could have invested in stock investments. The Plaintiffs argued that the Toronto Stock Exchange composite index nearly doubled during the period of this litigation and submitted that Mr. Henry would not be overcompensated by 5% interest because he could have earned more than 1.3% return in stock investments. There was no evidence to support this submission. There was no evidence that Mr. Henry, or the Estate, would have engaged in stock investment, or that it would have been profitable for them.
[27] The Plaintiffs submitted that two recent cases have distinguished MacLeod and applied a 5% interest rate to non-pecuniary damages, citing and relying on Burke v. Dupont, 2021 ONSC 7988 and Fleury v. Kassim, 2022 ONSC 2464. In Burke, the Court awarded judgment in a medical malpractice case on a motion for default judgment, including 5% interest on the non-pecuniary damages. The Court observed, at para. 10, that “the 5 percent rate in Rule 53.10 is obviously much higher than the prejudgment interest rates prescribed by the CJA for the past seven years” but commented that “[t]here was no one before me on this default motion to argue what interest rate should be applied if not the 5 percent.” I do not see how this supports the Plaintiffs’ position. I have also reviewed the reasoning in Fleury, by which the Court declined, at paras. 327-329, to lower the interest rate from 5%. The exercise of discretion in that case was based on different findings than I have made.
[28] From the date on which Mr. Henry’s cause of action arose (July 2010) to the issuance of the Statement of Claim, the prejudgment interest rate set out in s. 127 of the CJA did not exceed 1.3%. From the issuance of the Statement of Claim to judgment, the prejudgment interest rate was for two years below 1%, for 2 years at 2% or below and in the year leading to trial was at 0.5%. This reflected the Consumer Price Index, which averaged 1.8% over the period under analysis. This shows that a 5% rate of prejudgment interest would overcompensate the Plaintiffs for loss of use of money during the prejudgment interest period. In my view, this supports ordering a rate of prejudgment interest below the 5% rate provided by Rule 53.10, on the factors set out in s. 130(2)(a) and (b) of the CJA. In the circumstances of this case, setting the prejudgment interest rate at 1.3%, the prejudgment interest rate in effect at the time the Statement of Claim was issued, is consistent with the principles set out in MacLeod, and is consistent with the objective stated in Cobb to fairly compensate the Plaintiffs by restoring to them, so far as money can do, all that was lost by the injury, “but neither too much, nor too little.”
(d) Conclusion – Prejudgment Interest Rate on Non-Pecuniary Damages
[29] In the exercise of my discretion, and in consideration of the factors set out in ss. 128 and 130 of the CJA and applicable case law, I order that the rate of 1.3% shall be applied to the prejudgment interest arising from the jury’s awards for non-pecuniary damages.
C. Costs
[30] The parties agreed that the successful party would receive an award of costs of this hearing fixed in the all-inclusive amount of $5,000. The Defendant was successful in the determination of the applicable rate of pre-judgment interest on the awards of non-pecuniary damages. Accordingly, consonant with the agreement reached by the parties, the Defendant, Dr. Marshall Zaitlen, shall receive costs of this hearing, payable by the Plaintiffs, fixed in the amount of $5,000, all-inclusive.
[31] The parties may file on CaseLines, and forward by email to my judicial assistant, their final form of draft Judgment, after they have agreed on its form and content.
Justice A.A. Sanfilippo
Date: December 22, 2022
[^1]: Sean Omar Henry v. Dr. Marshall Zaitlen, 2022 ONSC 2718. [^2]: Sean Omar Henry v. Dr. Marshall Zaitlen, 2022 ONSC 3050.