Court File and Parties
BARRIE COURT FILE NO.: CV-19-00000180-0000 DATE: 20240419 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: STEVEN KENNEDY, by his LITIGATION GUARDIAN, WILLIAM KENNEDY, Plaintiff AND: BROOKE GENNO and GINA GENNO, Defendants
BEFORE: THE HON. MR. REGIONAL SENIOR JUSTICE M.L. EDWARDS
COUNSEL: Marc Lemieux, for the Plaintiffs Karim Hirani, for the Defendants
HEARD: In Writing
Endorsement
[1] This action arises out of pedestrian motor vehicle accident which happened on March 21, 2018. There is no dispute that the plaintiff is a party under disability due to a cognitive disability.
[2] This matter proceeded to trial before me in November 2023. After a few days of evidence counsel advised the court that an all in settlement of $350,000 had been agreed to between the parties subject to court approval.
[3] I have reviewed the materials that have been filed in support of the approval of the settlement and I am satisfied that the legal fees claimed of $57,079.45 is a fair disposition as it relates to Mr. Lemieux’s fees. I also approve the disbursement account of $92,920.55. What remains from the settlement of $350,000 is $200,000 which is to be allocated to the plaintiff.
[4] The sole issue that this court now has to determine is whether or not the $200,000 should be the subject of a structure or whether the $200,000 should be subject to a “Henson Trust” (the Trust). It is suggested by Mr. Lemieux that the Trust will allow for a more flexible and suitable manner to ensure the plaintiff’s short and long term needs.
[5] A number of options have been presented to the court by McKellar Structured Settlements. They include a 10 year investment; a 15 year investment; a 20-year investment with monthly payouts and a 20 year investment with semi-annual payments.
[6] Mr. Lemieux suggests that a structure will present a number of complexities which include the following:
(a) a payment from the structure occurs whether or not the plaintiff requires the payment; (b) if the payment is not required then the money must be taken on whatever the interval is and invested and managed notwithstanding the structure; (c) a form of trust or investment will have to be created and managed in any event; (d) the payment interval contemplated by a structure does not necessarily correspond with the plaintiff’s needs; and (e) if the plaintiff does not require regular payments the payment will nonetheless occur and if the plaintiff requires payments in excess of the interval payment then he will not be able to access them.
[7] It is proposed by the Litigation Guardian (the plaintiff’s father) that the proposed trust will provide a more desired combination of security because the money can be invested and compounded until such time as the plaintiff will require the money. On the other hand structured settlements are well known as an investment tool that can be made available to persons who have suffered personal injury as a result of a motor vehicle accident. It is a well accepted fact that a structured settlement is safe and secure and can provide for guaranteed tax-free periodic and lump-sum payments for life or for a defined period of time.
[8] The starting point when dealing with a motion to approve a settlement where a party is under disability is Rule 7 of the Rules of Civil Procedure (the “Rules”). Rule 7.09(1) provides:
Any money payable to a person under disability under an order or a settlement shall be paid into court, unless a judge orders otherwise.
[9] A strict interpretation of Rule 7.09 does allow this court to order a form of trust. However s. 6(1) and (2) of the Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996, O. Reg.461/96 are also engaged when dealing with a fact situation similar to the one before this court.
[10] Section 6(1) and (2) of the Court Proceedings for Automobile Accidents that Occur on or After November 1, 1996 provides:
(1) The court shall order that an award for damages for pecuniary loss be paid periodically under section 267.10 of the Act if two or more of the following circumstances exist:
The award, including prejudgment interest but excluding costs, is for $100,000 or more.
On the date of the order, the plaintiff is less than 18 years of age.
The court is satisfied that the plaintiff has no other means to fund his or her future care.
The court is satisfied that the plaintiff is not likely to manage the award in a prudent manner.
(2) Subsection (1) does not apply if the court is satisfied that,
(a) sufficient funds to pay the award periodically are not available under a motor vehicle liability policy; or (b) an order to pay the award periodically would have the effect of preventing the plaintiff or another person from obtaining full recovery of a claim arising out of the incident.
[11] On the facts before this court the settlement net of the court approved costs and disbursements is for $200,000. As such, one of the circumstances prescribed in s. 6(1) is met. I am also satisfied that the plaintiff being a party under disability is not likely to be able to manage the award in a prudent manner. As such, in my view, s. 6(1) of the Act applies. I read the provisions of S 6 (1) as mandatory. The provisions of S 6 (1) of the Act do not appear to allow for the flexibility of a Trust as suggested by the Litigation Guardian.
[12] The motion material filed for court approval did not advert to the potential application of the Act. To be fair to Mr. Lemieux and his client I am prepared to receive further submissions on this issue. That said, subject to receiving further argument from counsel, this court is bound to require that the balance of the settlement funds, net of the fees and disbursements, shall be paid into a structure with McKellar’s. The only issue then would be whether the structure should be for 10 years, 15 years or 20 years. In my view, the appropriate period of time for such structure would be 15 years given the material filed on this motion. Before making this final determination however, as it relates to the application of the Act, I am prepared to receive further written submissions from Mr. Lemieux.
[13] Regardless of those submissions, this court approves the fees and disbursements as previously noted in para 3 above. This Court also approves the total settlement of $350,000 and approves an order dismissing the action.
M.L. EDWARDS, R.S.J. Date: April 19, 2024