Supreme Court of Canada
Thornton v. School District No. 57 (Prince George) et al., [1978] 2 S.C.R. 267
Date: 1978-01-19
Gary Edmund Thornton, an infant by his next friend, Doris May Tanner, and the said Doris May Tanner and Robert Tanner (Plaintiffs) Appellants;
and
Board of School Trustees of School District No. 57 (Prince George) and David T. Edamura and John A. Harrower (Defendants) Respondents.
1977: June 13, 14, 15; 1978: January 19.
Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA
Damages—Accident resulting from negligence of school authorities in failing to exercise due care during physical education classes—Physically incapacitated but mentally alert youthful quadriplegic—Applicable principles in assessment of damages.
While in attendance at a secondary school in Prince George, the appellant sustained severe injuries in an accident which occurred as a result of the negligence of the school authorities in failing to exercise due care during physical education classes. An injury to the appellant’s neck caused total or partial paralysis to each of his four limbs. An action for damages followed. Prior to the injury the appelant was 6 feet 3 inches in height and described in evidence as being the epitome of the all-round athlete. At the date of trial he was 18 years of age, physically disabled, unemployable, and wholly dependent upon male orderly assistance for his day-today needs, yet with mental faculties wholly intact.
The trial judge assessed damages in the sum of $1,534,058.93, under the following heads:
| 1. Special damages |
$ 42,128.87 |
| 2. Cost of future basic care needs: |
|
| (a) Equipment, home, motor vehicle |
65,500.00 |
| (b) Cost of care ($4,305 monthly; life expectancy 49 years; capitalization rate 4%) |
1,122,571.80 |
| 3. Loss of ability to earn income in the future |
103,858.26 |
| 4. Non-economic related head of damage |
200,000.00 |
[Page 268]
On appeal by the defendants, the Court of Appeal varied the award as follows:
| 1. Cost of future care ($ 1,500 monthly; life expectancy 49 years; capitalization rate 7 1/2—9%; contingencies 10%) |
$ 210,000.00 |
| (a) Medical supplies and equipment |
12,000.00 |
| 2. Future income loss |
120,000.00 |
| 3. Pain and suffering, loss of amenities, loss of expectation of life |
200,000.00 |
To the amount of $542,000, the Court of Appeal added $58,000, in part for the impact of taxation on income likely to be earned through investment of the amount awarded, and arrived at a total of $600,000 for general damages. The Court of Appeal also held the appellant to be entitled to his special damages of $42,128.87 and to the sum of $7,500 to be held in trust for his mother to compensate her for the services of a nursing character which she had rendered to him.
The total award was thus reduced by the Court of Appeal from $1,534,058.93 to $649,628.87. With leave, the appellant appealed to this Court on the broad issue as to whether or not the Court of Appeal erred in law as to the assessment of damages.
Held: The appeal should be allowed. The assessment of damages by the Court of Appeal was set aside and an award to the appellant of $859,628 was substituted.
I Cost of Future Care
The Court of Appeal erred in law in the approach it took toward the standard of care. According to the medical evidence, with home care, the injured person can be expected to live a normal, or almost normal, life span. With institutional care, it can be expected that he will not live a normal life span. Before denying a quadriplegic home care on the ground of “unreasonable” cost something more is needed than the mere statement that the cost is unreasonable. There should be evidence which would lead any right-thinking person to say: “That would be a squandering of money—no person in his right mind would make any such expenditure.” Alternatively, there should be evidence that proper care can be provided in the appropriate environment at a firm figure, less than that sought to be recovered by the plaintiff.
In the case at hand a number of expert witnesses advocated a particular type of care. Was it to be sup-
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posed that, as responsible people, they would recommend a particular standard of care if they thought that standard wildly extravagant or foolish? If there be a body of opinion holding that view then the burden was on the respondents to make that opinion known during trial. The defence did not call any evidence to rebut either the standard of care, or the cost of care evidence tendered on behalf of the appellant. The award of the trial judge for cost of future care should stand.
As to the determination of the capitalization rate, which the trial judge accepted as 4 per cent, an expert witness for the plaintiff stated that the use of present rates of return together with an allowance for inflation constituted an alternative method of calculation to the use of a “pure rate of interest” (i.e. which might exist in a hypothetical stable economic state), with no allowance for inflation. He also acknowledged that it was possible to obtain long-term high quality investments, such as corporate bonds with a 20-year maturity, with rates of return in excess of 10 per cent. Another expert witness introduced into evidence the fact that the Economic Council of Canada have gone on record as suggesting that over the next 40-year period the average rate of inflation will be in the neighbourhood of 3½ to 4 per cent. This evidence afforded sufficient basis for the choice of 7 per cent as an appropriate discount rate. It did not support a range of 7½ to 9 per cent, the discount factor selected by the Court of Appeal.
The cost of a home and of a motor vehicle denied by the Court of Appeal should be reinstated as part of the award. The cost of those items naturally followed the adoption of home care as the standard of care.
In view of the fact that home care is to be the standard, it must be recognized that the duration of such care may be affected by such contingencies as difficulty in staffing a self‑contained establishment or the need to enter hospital for special treatment. A contingency allowance was proper and an allowance of 20 per cent should be accepted.
II Future Income Loss
It is preferable that the deduction for basic necessities should be made in computing the award for loss of future income rather than in respect of future care. This approach reflects the fact that the costs of necessities may be different when in an infirm state than when in a state of health. A difference would also arise if there is a difference in the contingency factor. Agreeing with the trial judge, $443 was deducted for basic necessities. However, a discount rate of 7 per cent, rather than 4 per cent, should be applied.
[Page 270]
The Court of Appeal could not be said to have erred in applying a 10 per cent contingency allowance. The imposition of a contingency allowance is not mandatory. However, the deduction, if any, will depend upon the facts of each case, including the age and nature of employment of the plaintiff.
III Pain and Suffering, Loss of Amenities, Loss of Expectation of Life
The award under non-economic related heads of damage should be a Canadian conventional award, adjusted to meet the specific circumstances of the individual case. As in Andrews v. Grand & Toy Alberta Ltd., [1978] 2 S.C.R. 229, the award for non-pecuniary loss in this case should be reduced to $100,000. For the reasons outlined in Andrews, no allowance need be added in respect of taxation, and in no event should an allowance be made in respect of the impact of taxation upon the award for loss of prospective earnings.
APPEAL by the plaintiffs, from a judgment of the Court of Appeal for British Columbia, reducing the award of Andrews J. in an action for damages for personal injuries. Appeal allowed.
R. Cummings and D. Andrews, for the plaintiffs, appellants.
C.C.I. Merritt, Q.C., and R.B. Wallace, for the defendants, respondents.
The judgment of the Court was delivered by
DICKSON J.—The issues raised in this appeal are essentially those raised in Andrews v. Grand & Toy Alberta Ltd. Reasons for judgment in Andrews are being delivered contemporaneously with those in the present appeal. In Andrews I have sought to enunciate the principles applicable to the assessment of damages for serious personal injuries. The application of those principles led me to conclude that the Alberta Appellate Division had erred in Andrews. For the same reasons I believe that the Court of Appeal of British Columbia erred in the present case.
[Page 271]
This appeal concerns an action for damages for severe injuries sustained by Gary Thornton (the appellant) while in attendance at Kelly Road Secondary School in Prince George, British Columbia. As in Andrews, the major issue is as to the capitalized cost of annual care which the appelant must be able to meet over his life expectancy. The trial judge awarded $1,122,571. The Court of Appeal, without any evidential support, reduced this sum to $210,000. The effect of the judgment in the Court of Appeal was to reverse findings of fact, and to cast aside unanimous and cogent evidence emanating from eminent medical authorities, which the trial judge accepted, as to the standard of care that should be accorded a physically incapacitated but mentally alert youthful quadriplegic.
The accident occurred as a result of the negligence of the school authorities of the City of Prince George in failing to exercise due care during physical education classes. While the appellant was attempting a somersault, he sustained a serious flexion injury to his neck with comminuted fracture of the fourth cervical vertebrae. The injury caused total or partial paralysis to each of his four limbs. Prior to the injury the appellant was 6 ft. 3 in. in height and described in evidence as being the epitome of the all-round athlete. At the date of trial he was 18 years of age, physically disabled, unemployable, and wholly dependent upon male orderly assistance for his day-to-day needs, yet with mental faculties wholly intact.
An orthopaedic specialist, Dr. F. Ducharme, testified that the orthopaedic problems to which the appellant might be subject would be minimized with optimal care and, given that care, he could reasonably expect an almost normal life expectancy. Lacking that care, his life expectancy would be seriously reduced. This opinion was shared by Dr. Ayers, a specialist in neurosurgery and by Dr. Ezzedin, a specialist in rehabilitation and physical medicine. The appellant was described by Dr. Gauk, a specialist in nervous diseases of children,
[Page 272]
as exemplary in his behaviour and in his studies, well-motivated, generally cheerful and a useful person in teaching other handicapped people the secrets of motivation. Dr. Moncton, a specialist in neurosurgery and the only medical witness called by the defence, agreed generally with the other medical opinion save that he considered that the appellant was unlikely to reach normal life expectancy due to his susceptibility to pulmonary and urinary infection. Dr. Gingras, Executive Director of the Rehabilitation Institute of Montreal, former President of the International Federation of Physical Medicine and consultant to the United Nations on the rehabilitation of paraplegics and quadriplegics, stated that the life span of a spinal cord injury patient was now, or would shortly be, that of a normal person, subject to one proviso—that constant optimal care was provided. The term “optimal care” was used from time to time throughout the evidence. It might suggest, to some, the ultimate in care and expense, indeed, a sybaritic life, but it is clear from the medical evidence that the term merely connotes an ongoing practical level of orderly care in a home environment. Auxiliary hospitals, on the other hand, are minimum care facilities. The following extracts from the evidence of Dr. Ayers make that clear:
THE COURT: If this boy were to be, say, in an extended care hospital would you feel that he would get what you would refer to as optimum care even though it was a hospital?
THE WITNESS: No, because most so-called extended care or auxiliary hospitals are minimum care facilities: The care would not be totally directed towards him.
…
THE WITNESS: Well, optimum care, in my opinion, is just reasonable care. It has to be done. These are things that have to be done. The environment for this person must be oriented to him, people that look after him must know him and be aware of the problems.
Dr. Gingras was strongly opposed to placing youthful quadriplegics in auxiliary hospitals where they might be forgotten, lonesome, without recrea-
[Page 273]
tion or proper treatment and with no will to live. Dr. Gingras considered that an apartment or private home environment was a necessary feature of optimal care, on both psychological and mental health grounds. Neither an auxiliary hospital nor drop-in orderly service would be suitable, in his opinion, for the physical and mental health of a young quadriplegic. Institutionalization would be the last resort for such a patient. Out of 600 quadriplegic patients Dr. Gingras has treated, only 125 are in auxiliary hospitals. The remaining 475 are in a home environment.
The trial judge, Andrews J., was furnished with detailed costs figures (Exhibit 37) from which it appeared that the monthly cost of the type of care which the medical witnesses deemed essential would amount to $4,305. In addition, initial equipment outlay expenses totalled $12,000; a home, if one were purchased, would cost $45,000 to $52,000; an Econo-van, specially equipped for quadriplegic use, would cost $8,500; a total of $65,000 in round figures.
After reviewing all the medical evidence the trial judge reached the following conclusions:
1. Gary Thornton has a good chance of living a normal life expectancy, but his “good chance” is contingent upon the existence of optimal care.
2. Optimal care demands the level of expenditure as set out in Exhibit 37.
Upon the evidence no other conclusion was open to him. The defendants did not manage to refute the plaintiff’s claim that the only adequate compensation for his injuries was care in a home environment. Neither did they establish that proper care in the home could be provided at less expense than that set out in Exhibit 37.
The judge assessed damages under the heads and in the amounts set forth below.
Head 1:
Special Damages
Counsel agreed on the amount of $42,128.87 as special damages.
[Page 274]
Head 2:
Cost of Future Basic Care Needs
The rates set out in Exhibit 37 were not disputed by defence counsel though the principle of home care therein set out was contested. The submissions of the respondents were rejected by the trial judge in these words:
In light of the evidence before me, I feel that I must assess the cost of care according to the means of care as set out in Ex. 37 since that means of care is, to my understanding, the type of care needed by young Gary Thornton to give him his “good chance” of living a normal life expectancy. To allow him less would, given the medical evidence before me, effectively result in curtailing his life span to less than his rightful measure.
The judge at trial accepted the actuarial evidence that a young man of the age of the appellant would have a life expectancy of 54 years to which a reduction of five years was applied, giving a life expectancy of 49 years. The judge used the exhausting fund principle, ignored inflation entirely and used a 4 per cent capitalization rate based on an historic rate of investment return. No allowance was made for contingencies. The judge was of the view that the appellant would require care for the rest of his days and there were no further adverse or beneficial contingencies which could arise. Including the sum of $65,500 for the special equipment, to which I have referred, the judge arrived at a total of $1,188,071.80 under Head 2.
Head 3:
Loss of the Ability to Earn Future Income
Counsel had agreed that loss of income should be based on an assumed possible base income of $850 per month. To avoid duplication, the judge, accepting expert evidence, deducted 52 per cent representing the ordinary living costs which the appellant would have had to meet, had he not been injured, for such matters as food, clothing, shelter and the like. He assumed a normal retirement age of 65 years and calculated the present value under Head 3 to be $103,858.26. He declined to make any allowance for contingencies, saying that he had no way of knowing whether the appellant would meet adverse conditions in life such as
[Page 275]
alcoholism, unemployment, drug addiction, insanity. Equally, he could not know whether the appellant would have received promotions and salary increases. In fine, the beneficial and the adverse contingencies cancelled out.
Head 4:
Non-Economic Related Head of Damage
Under this head is included compensation for physical and mental pain and suffering, loss of amenities and enjoyment of life, loss of expectation of life. The sum of $200,000 was assessed in this category.
Conclusion
In the penultimate paragraph of his reasons for judgment the trial judge said:
I have rarely referred to case law in assessing damages here, although I have read and re-read all the Canadian, English and American authorities referred to me by counsel in argument. That is because I feel that the principles regarding contingencies, tax considerations, duplication, inflation, and the mathematical method of calculating a fund have been well established in British Columbia. I have both outlined and followed them and express no concern that at first blush this award is much higher than any other personal injury award given in British Columbia, or possibly Canada. As I view the matter, the underlying principle is, and has been, that the plaintiff should be put back into the position both in terms of finances and health that he would have been had he not been injured, in accordance with the principles which I have stated above. He should not, and indeed cannot, be awarded perfect compensation. One should be fair to each side. I have been careful on the one side, as Mr. Merritt, Q.C., so aptly put it in argument not to “soak the wrongdoer”; but on the other side, I have endeavoured to use the wrongdoer’s money to provide Gary with the dignity, comfort and length of life to which we all in this society feel so rightly entitled. The principles have not changed, and that is fortunate for they make good sense. It is the medical evidence that has changed and warrants the large award assessed in this case in the amount of $1,534,058.93.
[Page 276]
The observation that the large award was warranted by reason of change in medical evidence, not change in legal principle, is worthy of note. It recognizes the revolution in rehabilitative and physical medicine of recent years. The current enlightened concept is to dignify and accept the gravely injured person as a continuing, useful member of the human race, to whom every assistance should be afforded with a view to his reintegration in society. Formerly, the gravely handicapped were relegated to institutions where they could look forward to little other than an early demise. They die, according to Dr. Ezzedin, because “there is nothing to help them to live”.
The defendants appealed.
The leading judgment in the Court of Appeal was delivered by Mr. Justice Taggart.
I Cost of Future Care
In his prefatory remarks, the learned justice of appeal defined this issue as being whether the constant care and attention required by the appellant should be given to him in a home of his own without any sharing of the substantial costs involved by other persons having similar injuries which require a similar level of care. The judge referred to the medical evidence and the two basic considerations which, that evidence disclosed, must be met in caring for a person in the position of the appellant: (i) attention to his physical needs—such as turning every two hours, transfer of the appellant from bed to wheelchair to specially designed vehicle and back again; (ii) personal care such as washing, dressing, bowel and urinary tract attention, and other personal needs. As Mr. Justice Taggart observed, the medical evidence indicated that an auxiliary hospital was the kind of institution in which the appellant would be placed if it were not possible for him to establish a home of his own. This kind of institution was recognized by the Court as unsuitable for young people in the condition of the appellant. The reasons therefor: (i) the age and senility of most of the patients is not conducive to the mental well-being of a young person like the appellant, whose mental ability is in the bright normal to superior range; (ii) it is
[Page 277]
possible for the appellant with the assistance of orderlies to leave the institution to attend the theatre and sporting events, or to visit friends. As a result the appellant, notwithstanding his severe injuries, would still be much more mobile than the others around him. From the point of view of the institution, an additional burden would be placed upon the hospital staff with comings and goings inconsistent with ordinary hospital routine.
Reference was made in the Court of Appeal, and in this Court, to the possibility of the appellant and two or three others in a similar situation pooling their resources and establishing a group home, reducing thereby the monthly cost of future care required by the appellant. Although the Court of Appeal speculated on this possibility, it conceded that the “evidence is silent as to the likelihood of this occurring.” With great respect, I can see little purpose in an appellate court conjuring up, of its own accord, possibilities which have not been mooted at trial, particularly when those possibilities find no support in the evidence either as to practicability or as to cost. In an adversary system it is the parties themselves, and not the court, who must come forward with claims for mitigation and with credible evidence to support those claims: see Karas v. Rowlett.
Mr. Justice Taggart made this trenchant finding: “I have no doubt that the increase in life expectancy would be enhanced if the ideal level of care proposed for the respondent is available.” He added: “The question is, however, whether that ideal level of care with its attendant cost is one which should be imposed upon the appellants.” There, stark, is the issue. Thornton will live longer if he receives the care which the doctors recommend. Is the cost too much for the respondents to bear? Ability to pay is advanced as the reason for denying the appellant the care which the medical experts say he needs. As I stated in the Andrews case, it is an error of law to regard the ability of the defendant to pay as a relevant consideration in the assessment of pecuniary damages. The correct principle is proper compensation for the injuries suffered by the victim. The exact amount in any
[Page 278]
particular case must be determined from the evidence presented by the parties at trial. Fairness to the defendant is achieved not by a reduction for ability to pay, or by an arbitrary slashing of the award, but by assuring that the plaintiff’s claims are legitimate and justifiable.
Mr. Justice Taggart referred to the monthly cost set out in Exhibit 37, $4,305, and to the evidence which suggested that if the appellant were cared for in an auxiliary hospital in Edmonton the monthly cost would probably not exceed $1,200. He quoted at length from the judgment of McGillivray C.J.A. in Andrews v. Grand & Toy Alberta Ltd., and concluded that $1,500 would be “a generous and reasonable” figure. My opinion of the reasoning adopted by the Alberta Appellate Division in Andrews has been made clear in my reasons for judgment in that case.
In the present case the trial judge, in avoiding duplication, deducted from the amount to be awarded for loss of future income, the amounts which the appellant would have expended for future needs had he not been injured. The Court of Appeal made that deduction from the cost of future care. The Court said that such a reduction had been made in reaching the amount of $1,500. It is obvious that the effect of awarding $1,500 per month for cost of future care would be to commit the appellant to institutional care.
Each case must proceed on its own evidence, but in this case, as in Andrews, on all the evidence such institutional care would be entirely unsuitable for a young mobile quadriplegic with unimpaired mental, faculties. In my opinion, the Court of Appeal erred in principle in failing to give effect to the evidence as to the standard of care required, and as found by the trial judge.
The Court of Appeal of British Columbia then entered upon a discussion of the appropriate interest rate, inflation, and cost increase to be considered when determining the capitalization rate.
[Page 279]
The Court rejected the discount factor of 4 per cent accepted by the trial judge, being of the view that a 4 per cent rate was drawn from economic conditions which were unlikely to be experienced in the foreseeable future. It also considered that an equally erroneous approach was the utilization of an unrealistically high level of interest which would result in no allowance being made to protect the capital fund against future cost increases and other effects of inflation. With respect, I agree with both of these observations. The Court of Appeal then selected a discount factor of between 7½ and 9 per cent. It did not, unfortunately, relate this choice to the evidence presented at trial. This evidence was similar to that presented in Andrews. In fact, the same actuary, Mr. R.W. Grindley, appeared as an expert witness for the plaintiff in both cases. In this case, as in Andrews, he stated that the use of present rates of return together with an allowance for inflation constituted an alternative method of calculation to the use of a “pure rate of interest” (i.e. which might exist in a hypothetical stable economic state), with no allowance for inflation. He also acknowledged that it was possible to obtain long-term high quality investments, such as corporate bonds with a 20-year maturity, with rates of return in excess of 10 per cent. Another expert witness, Mr. D.R. Badir, introduced into evidence the fact that the Economic Council of Canada have gone on record as suggesting that over the next 40-year period the average rate of inflation will be in the neighbourhood of 3½ to 4 per cent. In my opinion, this evidence affords sufficient basis for the choice of 7 per cent as an appropriate discount rate. It does not, however, support a range of 7½ to 9 per cent. I would therefore adopt a discount rate of 7 per cent.
The Court of Appeal considered that some allowance should be made for contingencies. Among those mentioned was the possibility that in the future the State would provide for the care of quadriplegics in their own quarters in institutions designed for them and at no cost to the patients. No evidence supports that speculation. The other contingency noted was the possibility that the appellant would be cared for either in an auxiliary
[Page 280]
hospital, or in a general hospital, at times when the provision of adequate medical care rendered it necessary to enter such an institution. If the award made by the Court of Appeal had been such as to make home care possible, then I would understand an argument that some contingency reduction should be applied in recognition of the possibility that the injured person might from time to time enter a general hospital for special treatment. How, though, does one justify a reduction in an award on the contingency that a plaintiff will enter an institution, or a general hospital, when the award itself is so low that the plaintiff is effectively committed to auxiliary hospital care in the first place?
In reducing the award for future care to $210,000, the Court of Appeal took the view that the trial judge had made three errors in principle, namely:
(i) he had chosen an unrealistic and unreasonably high standard of care to determine the monthly cost of future care;
(ii) he had chosen an inordinately low rate of interest to compute the present value of the capital sum required for this purpose;
(iii) he had failed to make adequate allowance for contingencies.
In my opinion, the Court of Appeal erred in law in the approach it took toward the standard of care. According to the medical evidence, the very length of life of the youthful quadriplegic is directly proportional to the nature of the care provided. With home care, the injured person can be expected to live a normal, or almost normal, life span. With institutional care, it can be expected that he will not live a normal life span. It is difficult, indeed impossible, to fashion a yardstick by which to measure “reasonableness” of cost in relation to years of life. It is sufficient, I think, for the purposes of the present case, to say that before denying a quadriplegic home care on the ground of “unreasonable” cost something more is needed than the mere statement that the cost is unreasonable. There should be evidence which would lead any right-thinking person to say: “That would be a squandering of money—no person in his right mind would make any such expenditure.” Alterna-
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tively, there should be evidence that proper care can be provided in the appropriate environment at a firm figure, less than that sought to be recovered by the plaintiff.
In the case at hand a number of expert witnesses, all highly qualified, representing various disciplines, appeared before the Court and advocated a particular type of care. In general terms, they would be aware of the cost of that care. Is it to be supposed that, as responsible people, they would recommend a particular standard of care if they thought that standard wildly extravagant or foolish? If there be a body of opinion holding that view then the burden was on the respondents to make that opinion known during trial. The defence did not call any evidence to rebut either the standard of care, or the cost of care evidence tendered on behalf of the appellant. I think the award of the trial judge for cost of future care should stand. His judgment, if I may say so, shows thoughtful and anxious consideration of every aspect of this difficult case.
The Court of Appeal denied the appellant the capital sum for his own home and Econo-van motor vehicle, but allowed him $12,000 for medical supplies and equipment which would not be required if, as the Court of Appeal in effect held, he should be institutionalized.
The respondents did not adduce any evidence to refute the reasonableness of the costs put forward by the appellant as to each item under Exhibit 37, inclusive of initial costs for the home and the Econo-van motor vehicle. The trial judge noted that the present value of the rental of an apartment would have been $117,342 for the life expectancy of the appellant, compared to the capital sum of $45,000 which he allowed as the cost of a home. The cost of the items mentioned naturally follows the adoption of home care as the standard of care. If auxiliary hospital care were to be the standard, then of course those items would be redundant. I would reinstate, as part of the award, the cost of the home and of the motor vehicle denied by the Court of Appeal.
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With regard to contingencies, in view of the fact that home care is to be the standard, I think it must be recognized that the duration of such care may be affected by such contingencies as difficulty in staffing a self-contained establishment or the need to enter hospital for special treatment. I think that some contingency allowance is proper and I would be prepared to accept an allowance of 20 per cent.
II Future Income Loss
The following table shows the differences between the judge at trial and the Court of Appeal in the computation of the award for loss of prospective income.
| |
|
|
| |
$ |
$ |
| Assumed monthly gross base income |
850 |
850 |
| Deduction for basic necessities of food, clothing and shelter |
|
|
| |
407 |
850 |
| |
|
|
| Anticipated working lifespan |
46 years |
43 years |
| Discount rate |
4% |
7½ 9½% |
| Contingency deduction |
|
10% |
| Award |
|
|
For the reasons which I stated in Andrews v. Grand & Toy Alberta Ltd., I am of the opinion it is preferable that the deduction for basic necessities should be made in computing the award for loss of future income rather than in respect of future care. This approach reflects the fact that the costs of necessities may be different when in an infirm state than when in a state of health. A difference would also arise if there is a difference in the contingency factor. I would agree with the trial judge in deducting $443 for basic necessities. For the reasons stated earlier, however, I would apply a discount rate of 7 per cent.
The question of a contingency allowance presents some difficulty. The trial judge, as I have said, declined to make any allowance for contingencies. He considered that he had no way of
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knowing whether the appellant might meet adverse conditions in his life, giving rise to a reduction in prospective future earnings, or whether he might receive promotions and salary increases which would have the effect of inflating the projected figures. The Court of Appeal applied a 10 per cent contingency deduction. The imposition of a contingency deduction is not mandatory, although it is sometimes treated almost as if it were to be imposed in every case as a matter of law. The deduction, if any, will depend upon the facts of the case, including the age and nature of employment of the plaintiff. Most forms of employment, however, are exposed to the possibility of layoff, illness, accidents and the like. I do not think the Court of Appeal can be said to have erred in applying a 10 per cent allowance.
The selection by the Court of Appeal of a 43-year working span was based on the actuarial evidence. The appellant concurs in the change made by the Court of Appeal in this regard. In the result, I would accept the trial judge’s figures except for a variation of the working span from 46 to 43 years.
In concluding his review of the award for pecuniary loss, Mr. Justice Taggart gave expression to certain misgivings which, with respect, I share:
The once and for all award may still be the most appropriate approach to compensation for that head of damages with which I have yet to deal, that is to say, pain and suffering, loss of amenities and loss of expectation of life. But I fear it is far from appropriate with respect to the pecuniary heads of damage. It results in the respondent receiving in respect of those heads of damage very large sums of money. If the approach I have taken is correct and if the respondent survives for the full term anticipated by the actuary and if there are no unforeseen contingencies then there will be sufficient funds to compensate him for the cost of his future care and for his loss of future income. On the other hand, if he survives longer than anticipated by the actuarial evidence or if unforeseen contingencies arise then unquestionably there will be a shortfall in the compensation available. If, however, the respondent fails to survive for the anticipated life span then there may well be substantial funds remaining unexpended which will go to the beneficiaries of the respondent’s estate. They may well be entitled to the unexpended portion of the amount
[Page 284]
awarded in respect of loss of future income but one can hardly say that they are entitled to the unexpended portion of the amount awarded for the cost of future care. No matter how one’s judgment is hedged about with allowances for contingencies some of which may be adverse and some favourable to the injured person, I feel a sense of inadequacy in doing real justice between the tortfeasor and the compensation claimant.
III Pain and Suffering, Loss of Amenities, Loss of Expectation of Life
It will be recalled that, under this heading, the trial judge assessed the sum of $200,000. The Court of Appeal was of the opinion that the amount awarded by the trial judge, though generous, was not so inordinately high as to constitute a wholly erroneous award. The Court considered that there was little to distinguish the condition of the appellant in this case from that of the appellant in the Andrews case. The Court of Appeal made no reduction under this head in the sum of $200,000.
The award under non-economic related heads of damage should be a Canadian conventional award, adjusted to meet the specific circumstances of the individual case. I am in agreement with the Court of Appeal that the pain and suffering, loss of amenities, loss of enjoyment of life and loss of expectation of life experienced by Thornton are essentially similar to that experienced by Andrews. Both were active young men with an abundance of life’s pleasures before them. Both are now quadriplegics, although both are mentally unimpaired and both are mobile when provided with proper assistance. For the reasons expressed by me in Andrews I would reduce the award for non-pecuniary loss to $100,000.
The Court of Appeal totalled the amount awarded under each head of damage, $542,000, added $58,000, in part for the impact of taxation on income likely to be earned through investment of the amount awarded, and arrived at a total of $600,000 for general damages. The amount added to compensate for the impact of taxation appears to have been made with respect to income from both the award for loss of future earnings, as well as that for future care. For the reasons outlined in Andrews, I do not believe that any allowance need
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be made in respect of taxation. In no event should an allowance be made in respect of the impact of taxation upon the award for loss of prospective earnings.
The British Columbia Court of Appeal held the appellant to be entitled to his special damages of $42,128 and to the sum of $7,500 to be held in trust for his mother to compensate her for the services of a nursing character which she had rendered to him.
I would allow the appeal and assess damages in the manner undermentioned.
| General Damages |
|
| A. Pecuniary Loss |
|
| I. Cost of Future Care |
|
| (a) Initial Capital Outlay for: |
|
| |
|
| Home |
$45,000 |
| Econo-van Motor Vehicle |
8,500 |
| |
|
| Home Care Equipment |
12,000 |
| (b) Capitalized annual cost of future care (monthly amount of $4,305; life expectancy 49 years; contingencies 20%; capitalization rate 7%) |
586,989 |
| II. Loss of Future Earnings |
|
| ($407 per month; workspan 43 years; contingencies 10%; capitalization rate 7%) |
61,254 |
| B. Non-Pecuniary Loss |
|
| Compensation for physical and mental pain and suffering endured and to be endured, loss of amenities and enjoyment of life, loss of expectation of life |
|
| Total General Damages |
$813,743 |
| Rounded off at |
|
To arrive at the total damage award, the special damages of $49,628, which includes $7,500 to be held in trust for the appellant’s mother, must be added to give a final figure of $859,628.
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I would allow the appellant costs in this Court and in the Courts below.
Appeal allowed with costs.
Solicitors for the plaintiffs, appellants: Klingle, Cummings, Andrews & Wilton, Edmonton.
Solicitors for the defendants, respondents: Bull, Housser & Tupper, Vancouver.
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