Court File and Parties

COURT FILE NO.: CV-23-00709751-0000 DATE: 20240819 SUPERIOR COURT OF JUSTICE – ONTARIO

B E T W E E N:

RE: RYLEY ELIJAH BARTON, a minor by his Litigation Guardian Kandyce Barton-Hogel., Applicant AND: SECURITY NATIONAL INSURANCE COMPANY., Respondent

HEARD: In Writing

COUNSEL: Tajinder Gogna and Megan Armstrong, Lawyers for the Applicant

Endorsement

G. DOW, J.

[1] This request for approval of a proposed settlement was forwarded to me following my having approved the settlement of the tort claim (2021 ONSC 6263). In that action, I approved the proposed $620,000, all inclusive settlement and fixed the solicitor and client fee of plaintiff’s counsel to be $100,000. This was less than the sought after contingent fee of $124,576.15 or 25% of the net recovery.

[2] The bulk of the settlement funds were placed in a tax free structured settlement. Ryley Barton is to receive $1,857.20 per month, indexed at 2% per year commencing in July, 2028 when he obtains the age of 18 years with the stream of payments guaranteed. Ryley Barton, born July 6, 2010 suffered a skull fracture and other injuries on June 26, 2012 when struck by a vehicle reversing out of a parking lot. The details of his injuries and recovery are summarized in my previous endorsement.

[3] I also seized myself of approval of any automobile accident benefit settlements to avoid one of my colleagues having to familiarize themselves with the matter.

[4] Since September, 2021, it is deposed to Ryley Barton has continued with schooling “on track with other students his age” (see paragraph 9 of his litigation guardian – mother’s affidavit sworn October 13, 2023) and achieves grades at the A, B and C level. He has close friends and enjoys video games.

[5] The proposed settlement is $678,400, all inclusive. It is proposed that $470,000 of the funds be again placed into a tax free structured settlement or annuity that will pay Ryley Barton $900 per month indexed at 2% per year for the next five years. It will then pay $500 per month indexed at 2% per year starting in 2035 and continuing to age 65 with payments guaranteed to July 6, 2067 or age 57. A small portion of the settlement funds were to be paid to the litigation guardian – mother for Ryley Barton’s sole benefit and such immediate expenses he may incur such as recreational programs and registration fees for summer camp.

[6] The proposed settlement appears to have been based on a September 7, 2022 life care plan report which identified every possible future medical and related expense, device, therapy, tutoring and counselling that he may require. Plaintiff’s counsel sought payment of a 25% contingent fee after reduction for outstanding disbursements which total $15,599.49. That is, fee of $165,713 plus HST of $21,541.02. This is compared to less than $67,000 in docketed time. The dockets were kept in the event of termination of the retainer agreement in accordance with the terms of that agreement.

[7] I had concerns with the extent of the material filed and requested additional material by letter dated April 29, 2024. I received additional material on May 21, 2024 and have added these to the court file.

[8] Regarding the proposed settlement of $678,400, all inclusive, I am prepared to approve the settlement and do so. My review of the evidence indicates the lump sum discount from all available possible benefits and expenses arising from Ryley Barton’s injuries is fairly reflected in the proposed settlement amount. I am also mindful that the responsible automobile accident benefit insurer had no obligation to negotiate such a lump sum settlement (although, it is common practice in statutory automobile accident benefits claims).

[9] I have difficulty with the proposed fee to be charged for the legal services provided. The test under Rule 7.08 requires approval the terms of the settlement to be in the best interests of the person under disability. The test for enforcement of a Contingency Fee Retainer Agreement is to first assess the fairness of the agreement as of the date it was entered into. The second test is to assess the reasonableness of the agreement as of the date of this hearing (see Heniricks-Hunter v. 814888 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496 at paragraph 13).

[10] In response to my request for further submissions in support of the fees sought, I was advised of the favourable quantum negotiated and agree same merits a fair and reasonable fee. I was advised of the investment and exposure for disbursements incurred of $15,599.49 by the firm representing the applicant. While this has some merit, it is overwhelmed by the usual practice of automobile accident benefit insurers to engage in and negotiate lump sum settlements. Further, counsel recognized this in their material indicating the risk of an unfavourable outcome was “moderate to low” (see paragraph 57 of counsel’s affidavit sworn February 15, 2024).

[11] I was also advised that not all of the time incurred was in fact docketed. That submission has limited merit given the retainer agreement drafted by the firm sets out the method of calculating the fee in the event of termination of the agreement by either party. The agreement also includes the need for court approval of any proposed settlement and the fee where involves a person under disability as occurred here (and was known to counsel from the outset). Finally, I had concerns with time when the tort and accident benefit claims were worked on together (as indicated from the time dockets produced and as stated in my previous endorsement).

[12] I would acknowledge the skill and ability of the counsel involved in this matter. The counsel involved are members of a firm that regularly advertises its expertise to the public in personal injury matters across Southern Ontario. With that expertise, one would expect a significant level of efficiency in documenting the claim and moving it forward to resolution. This appears to have occurred as evidenced by the time dockets totalling fees using the hourly rates contained in the retainer agreement to be less than $67,000.

[13] I am prepared to and find the Contingency Fee Retainer Agreement was reasonable when it was entered into. I do not find, based on the evidence before me, that the contingent fee to be charged was reasonable as of this hearing. I have applied and considered the factors in Heniricks-Hunter v. 81888 Ontario Inc. (Phoenix Concert Theatre), supra (at paragraph 22) in reaching this conclusion.

[14] To that end, I must determine the appropriate fee and what is in the best interests of the person under disability. I have attempted to balance the docketed time and submission about undocketed time. I am particularly mindful of the need to ensure access to justice for injured persons under disability. Expert legal services for such individual should be valued and willingly undertaken by members of the bar with expertise in the field.

[15] I have concluded the sum of $115,000 is the appropriate fee in this matter. In addition, HST is payable in the amount of $14,950 as well as the outstanding disbursements identified to total $15,599.49. The balance of $532,850.51 shall be used to fund the structured settlement in the amount of $470,000 with the balance of $62,850.51 to be paid to Kandyce Barton-Hogel, Litigation Guardian of Ryley Barton, in trust for the plaintiff under disability’s sole benefit and into a separate account with her passing of accounts as the Public Guardian and Trustee may require.

[16] I require a revised draft judgment to be forwarded to me by counsel for the plaintiff to reflect the following:

1. settlement of the statutory accident benefits claim of the minor applicant, Ryley Barton is approved;

2. the respondent, Security National pay to Diamond and Diamond Lawyers LLP, in trust, $208,400 in non-structure consideration, which shall be distributed as follows: a) to Diamond and Diamond Lawyers LLP, lawyers for the applicant, for the disbursements and outstanding accounts the sum of $15,599.49 in full satisfaction of those services; b) to Diamond and Diamond Lawyers LLP, lawyers for the applicant, fees in the amount of $115,000 plus HST in the amount of $14,950 which sum Diamond and Diamond Lawyers LLP accepts in full satisfaction of its solicitor and client accounts; c) to Diamond and Diamond Lawyers LLP, the balance of the proceeds being $62,850.51 which shall be paid to Kandyce Barton-Hogel, in trust for the plaintiff under disability’s sole benefit into a separate account with her passing of accounts as the Public Guardian and Trustee may require;

3. The respondent, Security National Insurance Company shall cause Sun Life Insurance (Canada) Limited to pay, with respect to claims for injury-related expenses, with periodic payments set out in Schedule “A” hereto, with periodic payments irrevocably directed to Ryley Elijah Barton as follows: a) until Ryley Elijah Barton attains the age of majority (July 6, 2028) to Kandyce Barton-Hogel, proposed Guardian of Property of Ryley Elijah Barton, for the sole benefit of Ryley Elijah Barton, subject to further order of the court; b) upon his attainment of the age of majority, to Ryley Elijah Barton directly; and c) in the event of Ryle Elijah Barton’s death before all the guaranteed payments have been made, to such secondary payee(s) as Ryley Elijah Barton, while he remains alive, may subsequently direct in writing, from time to time (upon his attainment of the age of majority), to Sun Life Assurance Company of Canada, with such direction being effective once accepted by Sun Life Assurance Company of Canada, and provided that in the absence of such direction or if there is no secondary payee or living at the time of Ryley Elijah Barton’s death. To the Estate of Ryley Elijah Barton.

4. Upon payment of the total amount of non-structure consideration set out in paragraph 1(a) hereof and upon receipt, by the Litigation Guardian, of a certified copy of the non-assignable, non-commutable, and non-transferable annuity issued by Sun Life Assurance Company of Canada to fund the period payments set out in Schedule “A” hereto with Sun Life Insurance (Canada) Limited named as owner and annuitant beneficiary) of the said annuity, with the payments under the said annuity irrevocably directed as set out in paragraph 1(b) hereof, the Respondent, Security National Insurance Company, shall be released and discharged from any and all actions, causes of action, mediations, arbitrations, applications to the Licence Appeal Tribunal, claims, and demands by the minor Applicant, Ryley Elijah Barton, for Statutory Accident Benefits, including PAST, PRESENT, AND FUTURE claims under the Statutory Accident Benefits Schedule (Effective September 1, 2010) for any and all types of Statutory Accident Benefits claims which were or which could have been advanced in reference to Policy No. 73750404, in consequence of and arising out of a motor vehicle accident which occurred on or about June 26, 2012, and from any and all claims for punitive, exemplary, and aggravated damages, damages for bad faith, damages for mental distress, or for a special award resulting from the Respondent’s administration of the Applicant’s Statutory Accident Benefits claim file. PROVIDED THAT nothing herein contained shall release and discharge Sun Life Insurance (Canada) Limited from its obligation to make the periodic payments set out in Schedule “A” hereto, for which periodic payments Sun Life Insurance (Canada) Limited shall remain liable until paid. Payments made pursuant to the said annuity contract, in discharge of the periodic payments set out in Schedule “A” hereto, shall, to the extent of each annuity payment and only to that extent, release and discharge Sun Life Insurance (Canada) Limited from its corresponding periodic payment obligation in Schedule “A” hereto.

5. This order shall be served on the Office of the Children’s Lawyer.

_____________________________ Mr. Justice G. Dow

Released: August 19, 2024