Conklin v. Smith et al., [1978] 2 SCR 1107

Supreme Court of Canada

Conklin v. Smith et al., [1978] 2 S.C.R. 1107

Date: 1978-06-29

William Conklin, Jr. (Plaintiff) Appellant;

and

Rodney Charles Smith and Phil Hall Ltd. (Defendants) Respondents.

1978: May 18; 1978: June 29.

Present: Ritchie, Spence, Beetz, Estey and Pratte JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA

Damages—Capable young man intending to qualify for employment as commercial air pilot—Injuries received in motor vehicle accident requiring leg amputation—Appellant then deciding he would not be able to work as commercial pilot—Subsequently following course to qualify as prosthetics specialist-—Probability of less remunerative employment—Award for future economic loss.

As a result of an accident involving a motorcycle which the plaintiff was riding and a truck driven by the defendant Smith and owned by the defendant Phil Hall Ltd., the plaintiff suffered very serious injuries which required the amputation of his left leg below the knee. Following further surgical procedures he was fitted with a prosthesis. In an action for personal damages the plaintiff was awarded $79,697 at trial. The defendants appealed and the Court of Appeal reduced the award to $48,750. The trial judge found the defendants, the present respondents, 75 per cent negligent in the accident and the plaintiff, the present appellant, 25 per cent negligent. The Court of Appeal agreed with that conclusion.

The variation in the amount of the award granted by the Court of Appeal lay in the fact that it reduced the amount of the award for future economic loss from $65,000 to $2,500. The appellant, by leave of this Court, appealed upon, firstly, the assessment against him of 25 per cent negligence and, secondly, from the reduction of the amount of the award for future economic loss. At the hearing of the appeal, the Court expressed the view that it was not ready to vary the percentage of negligence found by the trial judge and confirmed by the Court of Appeal.

The appellant at the time of his injury was 20 years of age. He had been a student taking courses leading to a Bachelor of Science degree and had attained a B+ average in his studies. He later determined that he

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would become a commercial air pilot and to this end decided that he would attend an aviation school (Selkirk College). That college had very high admission standards both as to physical fitness and intelligence. The appellant concluded that he could satisfy the medical standards, but one requirement that he was unable to meet was that of guaranteeing payment of the $5,000 tuition fee.

The appellant, therefore, discontinued his studies and sought work in an attempt to accumulate a fund of savings sufficient for him to give the fee guarantee. He became a letter carrier and in the course of nine months had saved $2,500, when the accident intervened. Thereafter, he decided he would not be able to work as a commercial air pilot and he became attracted to the trade of a prosthetics specialist. After obtaining certain required academic credits with a A—average, he was successful in gaining admission to a prosthetics course at the University of Washington, and in the two terms which he attended prior to the trial he received straight A averages.

It was accepted by all parties that the appellant as a prosthetics expert would earn from $4,000 to $6,000 less per year than he would have earned as an airline pilot.

Held: The appeal should be allowed and the judgment at trial restored.

If in a personal damage action the plaintiff is able to prove that he was gainfully employed, and there was no reason to expect that he would not continue to be so gainfully employed, then the court may award damages in view of the wages he was then receiving from such gainful employment. If, however, the plaintiff was not gainfully employed at the time of the accident but intended to be and was capable of being so gainfully employed thereafter, the court must make a reasonable allowance for the probable loss of future income due to the plaintiff having been deprived of that opportunity.

It is the duty of a court to assess such sum for loss of future income as may be determined from a reasonable appraisal of all the evidence. In the present case it would seem to have been a reasonable probability that apart from the accident the appellant would have earned from $4,000 to $6,000 more per year than his presently expected future income. Therefore, under the circumstances, the Court of Appeal erred in principle in dealing with the appellant’s claim as if he had been attempting to prove a loss due to a breach of contract and he should have been given a reasonable award for loss of future income.

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The trial judge concluded that there must be allowed for future economic loss the sum of $65,000 which would, however, have included the additional expense over the years for the renewal of a prosthesis and undue wear on clothes and shoes. Counsel were agreed, on argument in this Court, that those latter allowances might be assessed at $5,000. So, in fact, the trial judge was allowing $60,000 for future economic loss.

Since it was found that the Court of Appeal erred in principle in refusing practically any allowance for future economic loss, it was necessary for this Court to determine whether the allowance of what amounted to $60,000 by the trial judge was inordinately high. As to the respondents’ submission that the figure found as the present value of future economic loss should be, because of contingencies, discounted down to 20 per cent, that discount was itself inordinate. However, if a 20 per cent discount were allowed on $78,700 (the present value actuarily of $5,000 per year for 37.1 years at 7 per cent), it would amount to $15,700, so that the residue would still be greater than $60,000. If it were allowed on $65,600 (the present value of $6,000 for that period at that rate), it would be $13,120, leaving a residue of about $52,000. Under such circumstances, one could not say that an allowance of $60,000 for future economic loss was inordinately high.

Thornton v. Board of School Trustees of School District No. 57 (Prince George) et al., [1978] 2 S.C.R. 267; Arnold v. Teno et al., [1978] 2 S.C.R. 287; Andrews v. Grand & Toy Alberta Ltd. et al., [1978] 2 S.C.R. 229; Gorman v. Hertz Drive Yourself Stations of Ontario, [1966] S.C.R. 13, referred to.

APPEAL from a judgment of the Court of Appeal for British Columbia allowing an appeal from a judgment of Macdonald J. in an action for personal damages. Appeal allowed and judgment at trial restored.

D.S.C. Nuttall, for the plaintiff, appellant.

J.D. McAlpine, Q.C., and J.G. Dives, for the defendants, respondents.

The judgment of the Court was delivered by

SPENCE J.—This is an appeal from the judgment of the Court of Appeal for British Columbia pronounced on September 30, 1977. By that judg-

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ment, the said Court of Appeal for British Columbia allowed an appeal by the present respondents from the judgment of J.A. Macdonald J. given after trial. The judgment at trial had awarded to the present appellant the sum of $79,697. The judgment of the Court of Appeal reduced that amount to the sum of $48,750.

Macdonald J. at trial had found the defendants, the present respondents, 75 per cent negligent in the accident which resulted in the action and the plaintiff, the present appellant, 25 per cent negligent.

The Court of Appeal for British Columbia also considered a cross-appeal by the plaintiff seeking to vary the percentages awarded by the learned trial judge. That cross-appeal was dismissed.

The variation in the amount of the award granted to the present appellant by the Court of Appeal lay in the fact that it reduced the amount of the award to the present appellant for future economic loss from $65,000 to $2,500. The appellant, by leave of this Court, appealed upon, firstly, the assessment against him of 25 per cent negligence and, secondly, from the reduction of the amount of the award for future economic loss.

At the close of the appellant’s argument, counsel for the respondents was informed that he need not direct argument to the question of the percentages of negligence, this Court expressing the view that it was not ready to vary a percentage of negligence found by the learned trial judge and confirmed by the Court of Appeal.

In the automobile accident which resulted in the action, the plaintiff received very serious injuries, particularly to his left tibia and fibula, which required the amputation of the left leg below the knee. The plaintiff spent twenty-one days in the Royal Columbian Hospital and then was moved to Surrey Hospital where further surgical procedures were required and he was finally fitted with a prosthesis. This measure, of course, required a degree of adjustment and refitting and he finally left the hospital four months after his injury.

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The plaintiff, at the time of his injury, was 20 years of age. He had been a student at Trinity Western College in Langley, British Columbia, taking courses leading to a Bachelor of Science degree and had attained a B+ average in his studies at the institution. The plaintiff said he felt the economic opportunity for B.Sc. graduates in British Columbia was limited and he determined to become a commercial air pilot. In British Columbia, the evidence indicated, the best preparation for such a career was a course at Selkirk College. That college had very high admission standards both as to physical fitness and intelligence requirements. It is said that from 150 to 180 applications for admission are received every year and only about 30 students are admitted. In addition, a student must be able to guarantee that he will pay the $5,000 in fees required for the course.

The appellant, therefore, left Trinity Western College and sought work in an attempt to accumulate a fund of savings sufficient for him to give that guarantee. He had previously obtained a brochure from Selkirk College, noted the requirements and concluded that he could fulfil those requirements. So far as physical condition was concerned, those requirements were that he should be of high physical fitness and not less than 5 feet 7 inches in height. He believed that he was physically fit and that he had normal eyesight. He testified that on three different occasions that eyesight had been tested: twice before the accident—once at Trinity Western College and once at the motorcycle bureau—and on a third occasion by a Dr. Russell, the physician who gave evidence at trial. Dr. Russell had no record of having checked his patient’s eyes. He did say, however, that he had attended the patient from 1970, that is, three years before the accident, up to and including the day of the accident and that “he had always been in excellent health”.

The appellant, after some casual jobs, took on the position of a letter carrier in the postal service and in the nine months during which he had been at such work prior to the accident he had succeeded in accumulating savings of $2,500. After the accident, the appellant decided that he would not be able to work as a commercial air pilot, despite

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the fitting of a prosthesis, and he became attracted to the trade of a prosthetics specialist. The best training for the career could be obtained only from the Prosthetics Department in the University of Washington. The appellant did not have the academic credits entitling him to enter that course so he went to Simon Fraser University and obtained those credits with an A—average. He then applied for and obtained entrance to the prosthetics course at the University of Washington, being one of eight students admitted in that year, and in the two terms which he attended the course prior to the trial he had received straight A averages.

It was accepted by all parties that the wages earned as a prosthetics expert would be $4,000 to $6,000 less per year than that of an airline pilot, and Ex. 3, being a letter to the appellant’s solicitors to this effect, was filed.

The learned trial judge considered all of the evidence and said, in part:

If he obtained employment as a pilot with one of the major airlines, and continued in that work until age 60, his lifetime earnings would probably be very considerably greater than they will be from the career which now lies ahead of him. But allowance must be made for many contingencies. Notwithstanding apparently excellent qualifications, the plaintiff might have been frustrated in gaining admission to Selkirk College and switched to a different career; some elements of unsuitability for flying might have become manifest in pre-entry testing or later; he might have failed to obtain employment with the major airlines and spent his life in aviation work less rewarding; accident or illness might have interrupted his career. I am not attempting to enumerate all the contingencies. But considering all, it is probable that the accident will result in a significant loss of future income for the plaintiff. Now on the basis of a loss of earnings at age 60, and discounting for interest at the rate of four per cent per annum compound, Mr. Collisbird, the actuary, calculated a present lump sum value of $77,000. Discounting for interest at five per cent per annum compound, the amount is $67,000. On the basis of a $6,000 income less per year to age 60, the present lump sum value, discounting for interest at four per cent, is $115,000, and at five per cent, $100,000. The defendant admitted for the purposes of the trial that the annual salary difference is $4,000 to $6,000. The actuary’s calculations do not take into account the contingencies which I have mentioned and a significant discount must be made for them. The plaintiff is going

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to be put to additional expense, over the years, for renewal of the prosthesis, and undue wear of clothing and shoes. There will be included in the award of general damages, for future economic loss, the sum of $65,000.

The Court of Appeal for British Columbia, on the other hand, said:

Counsel for the appellants accepted the judge’s finding that the respondent intended to enroll in Selkirk College but contended that the evidence did not show as a reasonable probability that the respondent would be successful in becoming a commercial pilot. I think that submission is sound because

(a) the accident occurred at least a year before the time when the respondent anticipated being able to enroll at Selkirk College.

(b) Selkirk College has about 200 applicants each year for its flight training course and accepts only thirty to forty from among those applicants.

(c) while the respondent’s abilities as a student have been amply demonstrated his capabilities as a flyer are yet to be ascertained.

(d) employment opportunities with the major airlines have been very limited in recent years and this has had a depressing effect on employment in the commercial aviation field.

(e) Selkirk College requires applicants for enrolment to meet the same medical standards as those set by the major airlines for their flying personnel. The respondent had not demonstrated his ability to meet those standards.

Counsel for the appellant in this Court made a submission, with which I agree, that the Court of Appeal for British Columbia has not appreciated the basis upon which the learned trial judge came to his conclusion. It is his submission that the learned trial judge did not conclude, apart from the accident, that the appellant would have been a commercial airline pilot and that he, therefore, did suffer loss of future income to the extent of $65,000 but rather that there was a reasonable possibility that the appellant would have so become a commercial airline pilot and that had he done so, the wages which he would have received during his working life at that task would have

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exceeded those which he would earn as a prosthetics specialist by far more than $65,000. Further, that there were, as the learned trial judge himself said, many contigencies which had to be allowed for and amongst the contingencies are the very ones which the Court of Appeal found indicated that the appellant had not proved his case. The Court of Appeal, therefore, simply cancelled out all allowance for loss of future income with the exception of the sum of $2,500 the basis for which is expressed in these terms:

However, allowance must be made for the opportunity lost of attending Selkirk College. I think $2,500 is a reasonable allowance for that loss.

It is my view that a court in considering a claim for loss of future income is in a very different position than a court considering a claim for damages for breach of contract. The plaintiff may well fail to prove the damages for breach of contract as including the loss of future profit on some specific contract for a variety of reasons. If in a personal damage action the plaintiff is able to prove that he was gainfully employed, and there was no reason to expect that he would not continue to be so gainfully employed, then the court may award damages in view of the wages he was then receiving from such gainful employment. If, however, the plaintiff was not gainfully employed at the time of the accident but intended to be and was capable of being so gainfully employed thereafter, the court must make a reasonable allowance for the probable loss of future income due to the plaintiff having been deprived of that opportunity. Such allowance has been made when the plaintiff was very far from having been engaged in any gainful employment. This Court in Thornton v. Board of School Trustees of School District No. 57 (Prince George) et al., by a judgment delivered on January 19, 1978, and as yet unreported[1], considered a claim for, inter alia, loss of future income due to the very serious injury of an 18-year-old boy in a school gymnasium. At trial, the learned trial judge allowed for the loss of ability to earn future income at the rate of $850 per month until normal retirement at age 65. With a slight variation for length of working life and

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contingency allowance in the Court of Appeal, that result was approved in this Court.

In Arnold v. Teno et al., another judgment of this Court delivered on January 19, 1978, and as yet unreported[2], this Court by a judgment unanimous on this point, made an allowance for loss of future income in the case of a four-and-a-half-year-old girl who had been very seriously injured in an accident. The Court said (at p. 329):

The allowance of an amount for loss of future income in the present case is extremely difficult. The plaintiff at the time of her injury was a four-and-a-half-year-old child. There can be no evidence whatsoever which will assist us in determining whether she ever would have become a member of the work force or whether she would have grown up in her own home and then married. There can be no evidence upon which we may assess whether she would have had a successful business future or have been a failure. Since the Court is bound not to act on mere speculation, I do not see how this Court could approve the course taken by Zuber J.A which simply amounted to assuming, as he quite frankly said, “in the absence of any other guide”, that the infant plaintiff would follow the course of her mother who was a primary school teacher with an income of $10,000 per year. On the other hand, I do not think we can assume that a bright little girl would not grow up to earn her living and would be a public charge, and we are not entitled to free the defendants, who have been found guilty of negligence, from the payment of some sum which would be a present value of the future income which I think we must assume the infant plaintiff would earn. It must be remembered that the allowance for future care provides only for the cost of attendants and that like everyone else the infant plaintiff has to eat, clothe herself and shelter herself.

I am, therefore, of the opinion that it is the duty of a court to assess such sum for loss of future income as may be determined from a reasonable appraisal of all the evidence. Applying that consideration to the facts of the present appeal, we have the case of a young man who had shown academic excellence, one might almost say brilliance, both before and after the accident, who had

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shown great determination and perseverance and who, upon all of the evidence, had the health qualifications to allow him to apply his intelligence and earn himself a good living. In the case of Thornton, supra, what was calculated was earnings as a workman, appropriate under the circumstances of the particular plaintiff. In Arnold v. Teno, supra, for want of a better guide, 150 per cent of the poverty level was taken. Here, there was much more evidence.

The appellant had been earning $8,300 per year in a temporary job as a letter carrier. After the accident, he was qualifying himself for a position in which he would earn $14,000 to $16,000 per year as a prosthetics specialist. There would seem to have been a reasonable probability that apart from the accident he would have earned from $4,000 to $6,000 more per year. Therefore, under those circumstances, I am of the opinion, with respect, that the Court of Appeal for British Columbia erred in principle in dealing with the appellant’s claim as if he had been attempting to prove a loss due to breach of contract and that he should have been given a reasonable award for loss of future income.

I turn now to the assessment of that amount. I have summarized the evidence that the appellant gave pointing to his attainment of the position of commercial airline pilot.

The Court of Appeal for British Columbia, in the portion of its judgment which I have already quoted, found these factors made such a goal improbable for the following reasons:

1. That the accident occurred a year before the appellant’s possible entry into Selkirk College.

I find it irrelevant whether it be a year or six years, if there had been reasonable probability that the appellant would have entered Selkirk College. Certainly all of the evidence points to the great improbability of this appellant changing his mind during that year and abandoning a career which so attracted him.

2. The difficulty of obtaining entry to Selkirk College.

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The evidence showed that thirty-odd applications were accepted out of 150 to 180, an average of about one in five or a little less. The odds against obtaining successful entry into the University of Washington prosthetics course were much longer but the appellant did succeed in obtaining entry into that college for his prosthetics course.

3. The appellant’s ability as a pilot had not yet been ascertained.

There was no evidence whatsoever given that would indicate that the appellant was in any way disabled from flying. The respondents had an opportunity to examine or to require medical examinations to demonstrate any physical inability in the appellant such as eyesight colour perception, possibility of air sickness, or the like, and the respondents chose not to do so. In fact, the respondents’ witness, Dr. Paul Rinfret, the Regional Aviation Medical Officer in Vancouver, gave evidence that the medical qualifications necessary for entry into Selkirk College or for a commercial pilot’s licence were very strict but he failed to outline them or in any way indicate how the appellant would not have been successful in passing them.

4. Employment opportunities with the major airlines had been very limited in recent years and this had a depressing effect on employment in commercial aviation fields.

The Court of Appeal seemed to have assumed that the appellant’s aim was to obtain employment as a pilot with a major airline. Nothing the appellant said or was said on his behalf indicated such was his ambition. On the other hand, he seemed to have been aiming at a commercial pilot’s position in a smaller airline or such other work as is performed by commercial pilots. The appellant gave evidence that he had consulted those who operated such smaller airlines or flying businesses in the area and that although he had not been offered any position, since he was at that time an untrained person simply considering a career, he was told that positions were available. Leonard S. Milne, the officer in charge of flight standards with Altair Aviation, such a smaller flying busi-

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ness, gave evidence for the respondents and in cross-examination agreed that they (Altair Aviation) probably took twenty-five graduates of Selkirk College as instructors. I am, therefore, of the opinion that the conclusion arrived at by the Court of Appeal for British Columbia on this factor was simply not justified upon the evidence.

5. Selkirk College required applicants to meet certain medical standards and the appellant had not demonstrated his ability to meet those standards.

I have dealt with this already and need not make further comment.

I have, therefore, come to the conclusion that the appellant had demonstrated a reasonable probability that he could and would have obtained a position as a commercial pilot in British Columbia. On the admission which I have recited, his wages in such a position would have been $4,000 to $6,000 per year greater than those which he will earn as a prosthetics specialist. Evidence was given that the normal working life of a commercial pilot is to 60 years of age. The learned trial judge considered the evidence of an actuary called by the appellant and mentioned in his reasons for judgment, as I have recited already, certain sums varying from $67,000 per year to $115,000 per year as the present value for the loss of such annual sums at discount rates which varied from four to five per cent. The respondents urged this Court that such calculations are useless when this Court, in the cases to which I have already referred, fixed on a discount rate to balance inflation of 7 per cent.

The present value actuarily of $5,000 per year for 37.1 years at 7 per cent is $65,624. The present value of $6,000 per year for that period at that rate is $78,700.

The learned trial judge in the portion of his reasons which I have quoted, recognized that the actuary’s calculations did not take into account the contingencies which he had mentioned and an allowance must be made for them. Therefore, he concluded that there must be allowed for future

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economic loss the sum of $65,000 which would, however, have included the additional expense over the years for the renewal of a prosthesis and undue wear on clothes and shoes. Counsel were agreed, on the argument in this Court, that those latter allowances might be assessed at $5,000. So, in fact, the learned trial judge was allowing $60,000 for future economic loss.

Since I have found that the Court of Appeal for British Columbia erred in principle in refusing practically any allowance for future economic loss, then I must determine whether the allowance of what amounted to $60,000 by the learned trial judge was inordinately high: Gorman v. Hertz Drive Yourself Stations of Ontario[3], at p. 20.

The respondents, in their factum, submit that the figure found as the present value of future economic loss should be, because of contingencies, discounted down to 20 per cent. I suggest, on the evidence in this particular to which I have made reference already, that discount is itself inordinate. I point out that in Andrews v. Grand & Toy Alberta Ltd.[4], a third judgment given by this Court on January 19, 1978, Dickson J., giving the unanimous judgment of the Court, said (at p. 254):

The figure used to take account of contingencies is obviously an arbitrary one. The figure of 20 per cent which was used in the lower Courts (and in many other cases) although not entirely satisfactory, should, I think, be accepted.

If a 20 per cent discount were allowed on $78,700, it would amount to about $15,700, so that the residue would still be greater than $60,000. If it were allowed on $65,600, it would be $13,120, leaving a residue of about $52,000. Under such circumstances, one cannot say that an allowance of $60,000 for future economic loss was inordinately high.

For these reasons, I would allow the appeal, set aside the judgment of the Court of Appeal for British Columbia, and restore the judgment of the

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learned trial judge. The appellant is entitled to his costs throughout.

Appeal allowed with costs.

Solicitors for the plaintiff, appellant: Braid-wood, Nuttall, MacKenzie, Brewer, Greyell & Co., Vancouver.

Solicitors for the defendants, respondents: McAlpine, Roberts & Poulus, Vancouver.