Supreme Court of Canada
Gehrmann v. Lavoie, [1976] 2 S.C.R. 561
Date: 1975-10-07
Katherine Gehrmann, and Glen, Chrystal and Kelly Gehrmann, infants, suing by their next friend, Katherine Gehrmann (plaintiffs) Appellants;
and
Aimée Robert Lavoie (Defendant) Respondent.
1975: May 12, 13; 1975: October 7.
Present: Martland, Judson, Spence, Dickson and de Grandpré JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA
Damages—Fatal accident—Reduction of damages by Court of Appeal—Error in principle—Families’ Compensation Act, R.S.B.C 1960, c. 138.
In an action under the provisions of the Families’ Compensation Act, R.S.B.C. 1960, c. 138, for damages arising out of the death of the appellant’s husband as a result of an automobile accident, the majority of the Court of Appeal for British Columbia reduced the general damages awarded by the trial judge from $95,000 to $65,000. The deceased, at the time of his death, was 38 years of age and his wife was 32. They had twin children of seven years of age and a boy of three. The deceased was a civilian mechanic on an air base, near Prince George, and, in addition, he operated a proprietorship in his spare time doing refrigeration and electrical maintenance.
Held: The appeal should be allowed and the judgment at trial restored.
Per Martland, Judson, Spence and Dickson JJ.: In assessing damages it is error in principle to misapprehend or fail to take into account material and relevant evidence. Such errors in principle by the majority of the Court of Appeal included the following: 1) the failure to give due effect to the superannuation savings deducted by his employer from the deceased’s salary; 2) the giving of but scant attention to the earnings of the deceased from his secondary source of employment; 3) the failure to take into account the value of major inprovements to the family home that were left unfinished by the deceased at the time of his death and that had to be completed by his widow through the aid of hired labour; 4) the failure to charge payments for the
[Page 562]
family car against the living expenses of all members of the household rather than simply against the deceased’s own living expenses; 5) the allotment of too high an amount per month out of the deceased’s income as being attributable to his own maintenance and living costs; 6) the failure to use the most modern actuarial tables; 7) taking into consideration the deduction for income tax in calculating the annual income of the deceased; 8) the taking into account of payments under the Canada Pension Plan.
The award of total general damages of $95,000, while high, was not so excessive as would represent a wholly erroneous estimate of the damage.
Per de Grandpré J.: Agreement was expressed with the conclusions of Spence J. and with all of his reasons except one: the impact of the income tax on the revenue of the deceased. That question should be reserved for future consideration in a proper case.
[Gorman v. Hertz Drive Yourself Stations of Ontario Ltd. et al., [1966] S.C.R. 13; The Queen v. Jennings et al., [1966] S.C.R. 532; Canadian Pacific Ltd. v. Gill et al, [1973] S.C.R. 654, applied]
APPEAL from a judgment of the Court of Appeal for British Columbia, allowing an appeal from a judgment of Anderson J. and reducing the general damages awarded by him in an action for damages arising out of the death of the appellant’s husband as a result of an automobile accident. Appeal allowed.
R.M.J. Hutchinson and J.D. Taylor, for the plaintiffs, appellants.
L.S.G. Finch, for the defendant, respondent.
The judgment of Martland, Judson, Spence and Dickson JJ. was delivered by
SPENCE J.—This is an appeal from the judgment of the Court of Appeal for British Columbia. Reasons for judgment were delivered by members of that Court on June 8, 1973, and during the argument of the appeal in this Court we were informed that the formal judgment had not been
[Page 563]
taken out at the date of such argument because of the question of costs.
The plaintiff had issued an action under the provisions of the Families’ Compensation Act of British Columbia, R.S.B.C. 1960, c. 138, for damages arising out of the death of her husband the late Harry Siegbert Gehrmann as a result of an automobile accident. After trial, Anderson J. of the Supreme Court of British Columbia awarded judgment to the plaintiff assessing the total general damages at $95,000 divided as follows:
| Katherine Gehrmann |
$75,000 |
| Kelly Gehrmann, infant |
8,000 |
| Glen Gehrmann, infant |
6,000 |
| Chrystal Gehrmann, infant |
6,000 |
The learned trial judge deducted the sum of $13,320 which had been paid to the plaintiff under the provisions of the statute dealing with no fault insurance and which by virtue of those provisions is required to be deducted from the award of the plaintiff. The learned trial judge also allowed certain special damages in the amount of $1,565.
The majority of the Court of Appeal for British Columbia reduced that verdict for general damages to the sum of $65,000 and divided that sum in the following fashion:
| Katherine Gehrmann |
$39,000 |
| Kelly Gehrmann |
9,500 |
| Glen Gehrmann |
8,000 |
| Chrystal Gehrmann |
8,000 |
It will be seen that this division would amount to a slightly larger award going for the benefit of each of the three infants and a substantially smaller part going for the benefit of the widow Katherine Gehrmann.
The Chief Justice of British Columbia, on the other hand, would have dismissed the appeal and, in his reasons, he said:
On the issue of damages, in my opinion, while the amount awarded by the trial judge is high, and higher than I would have awarded, I do not consider it “so plainly unreasonable and unjust as to satisfy the Court that no jury reviewing the evidence as a whole, and acting judicially, could have reached it.” See McCannel v. McLean, [1937] S.C.R. 341 at p. 343.
[Page 564]
The function of a Court of Appeal in considering an award for damages made by a judge or a jury at trial has been discussed in frequent judgments in this Court. I cite only Gorman v. Hertz Drive Yourself Stations of Ontario Ltd. et al., where Cartwright J., as he then was, said at p. 14:
For the reasons given by my brother Spence I agree with him that it has not been shewn that the learned trial judge made any error in principle in arriving at the amount of general damages. On the other hand, I find it difficult to say that the Court of Appeal dealt with the matter on any wrong principle. The ground on which that Court proceeded was that the learned trial judge’s assessment of general damages was “so excessive that it cannot be upheld”.
Therefore, it is the duty of this Court to determine whether the Court of Appeal for British Columbia found any error in principle in the learned trial judge’s assessment or failing that if his award was so inordinately high that it must be a wholly erroneous estimate of damages. The reasons for the majority of the Court of Appeal for British Columbia were given by Robertson J.A.
The learned justice on appeal did not find error in principle in the reasons given after trial by Anderson J. but simply found that those reasons were incomplete and that they had consisted merely of a recital of a report given by an actuary and then the following statement:
I have reviewed all the evidence and the authorities referred to me by counsel for the plaintiffs and defendant and have given consideration to all the factors and contingencies referred to therein and to the awards which have been made in the recent cases. I have assessed the general damages at $95,000 to be divided as follows:
| Katherine Gehrmann |
$75,000 |
| Kelly Gehrmann |
8,000 |
| Glen Gehrmann |
6,000 |
| Chrystal Gehrmann |
6,000 |
Therefore, Robertson J.A. came to the conclusion that he would have to reassess the damages without the aid of the trial Court judgment.
[Page 565]
It is an error in principle to misapprehend or fail to take into account material and relevant evidence. It is the submission of counsel for the appellant in this Court that the learned justice on appeal did either misapprehend the evidence or fail to take into account relevant evidence in many particulars. Amongst those were instances where the failure to give due effect to the superannuation savings deducted by his employer from the late Mr. Gehrmann’s salary and which, of course, would constitute a compulsory saving plan and would materially increase his assets at the time of his death under normal circumstances and, therefore, the amount which those who were entitled under the statute could expect to receive upon his death. Similarly, the learned justice on appeal paid but scant attention to the earnings of the late Mr. Gehrmann from a secondary source of employment. The late Mr. Gehrmann had been employed by the Department of National Defence at Baldy Hughes Air Base, near Prince George, British Columbia, but in addition, he operated a proprietorship in his spare time doing refrigeration and electrical maintenance. This business was called Clucuz Electric and though it operated only in the late Mr. Gehrmann’s spare time it seems to have prospered. There is no reason to believe that it would have decreased and, on the other hand, there is every reason to believe that with the expansion of the refrigeration business generally in a growing community Gehrmann might well have had this proprietorship become his main source of income in the future. To have failed to give due consideration to this source of income is, in my view, an error in principle.
The late Mr. Gehrmann had a home which, when acquired, was in a dilapidated condition and he was in the course, by his own effort, of carrying out major renovations and improvements. This work had only been half finished at the date of his death, and after his death the work had to be completed by his widow through the aid of hired labour. This work, had the late Mr. Gehrmann been able to continue it, would have been a major contribution to his estate and again to the amount which those entitled under the statute could expect to receive.
[Page 566]
The late Mr. Gehrmann drove a 1968 Toyota car which he had purchased on instalment payments and which he was paying for at the rate of $80 per month. All of this amount was charged by Robertson J.A. against Mr. Gehrmann’s own living expenses. The late Mr. Gehrmann and the plaintiff, however, resided some twenty miles away from the nearest commercial centre. It is true an automobile was necessary for his transportation to and from work but it was also necessary for the members of his household in connection with their ordinary living and the division of the cost made by the learned justice on appeal was again an error in principle.
Robertson J.A. allotted the amount of $238 per month out of the late Mr. Gehrmann’s income as being attributable to his own maintenance and living costs. It would seem that such an allotment in the case of a man whose gross earnings were only a little over $7,000 a year and who was maintaining a wife and three children in a remote area in British Columbia was altogether out of accord with reality. Families living in such modest circumstances invariably find that a far larger part of the bread winner’s income goes to the support of the whole unit of man, wife and children than in the case where the man’s income is larger and the amount thereof necessary to support the household is relatively much smaller.
Robertson J.A., in his calculation, used the standard annuity mortality table prescribed by Regulation 5 of Order-in-Council 710 under the Succession Duty Act. Counsel for the appellant widow in this Court described that table as having been based upon the 1937 Standard Annuity Table of the Actuarial Society of America. The actuary who had given evidence at trial, Mr. Crawford U. Laing, used the Canadian Mortality Table 1962 based on the 1961 census. The use of actuarial tables or actuarial evidence is at best only an aid in coming to a conclusion. It is certainly much better to use the most modern such evidence available.
Moreover, in reaching the late Mr. Gehrmann’s annual income, Robertson J.A. considered deductions for income tax, superannuation, Canada Pension Plan and unemployment insurance. This
[Page 567]
Court, in The Queen v. Jennings et al., dealt with the question of deduction for income tax in the case of a plaintiff who had been so injured in an automobile collision that his earning capacity ceased although he had a life expectancy of five years after the date of the trial. I am of the opinion that the principle there enunciated applies as well in an action under the provisions of a fatal accidents statute such as the Families’ Compensation Act. Under that statute, an award should be that amount which those who claim under the statute would have been entitled to receive had the deceased continued to live his normal life. If the deceased’s earning capacity were destroyed as, of course, it is upon his death, then that amount is greatly reduced. In the case of Jennings, the victim’s earning capacity was similarly reduced to the point of elimination. Judson J., there speaking for the Court, rejected the propriety of any deduction because of income tax which might be payable upon the earnings of the victim had his life continued in a normal fashion, saying:
I would, however, put my rejection upon broader grounds. I agree with the dissenting opinion of Lord Keith in the Gourley case ([1956] A.C. 185) and the minority views; expressed in the 7th Report of the Law Reform Committee on the effect of tax liability on damages, published in August of 1958.
Therefore, to have considered the deduction for income tax in calculating the annual income of the late Mr. Gehrmann was an error. As to payments under the Canada Pension Plan, this Court in Canadian Pacific Limited v. Gill and Aujla, affirmed the Court of Appeal for British Columbia that in assessing damages there should not be taken into account any sum or sums payable on the death of the deceased under the Canada Pension Plan. Therefore, to have referred to such a deduction in arriving at the annual income of the deceased was also an error in principle.
[Page 568]
I turn now to the question of whether the award of total general damages of $95,000 was so inordinately high as to be a wholly erroneous estimate of damage. The deceased man, at the time of his death, was 38 years of age and his wife was 32 years of age. They had twin children of seven years of age and a boy of three and they lived in a home which had been owned by the family of Katherine Gehrmann, the widow, here appellant, on Haynes Road about 20 miles from the Village of Vander-hoof and 40 miles from Prince George. The deceased was evidently a hard worker, a stable worker, who provided as adequately as he was able for his wife and children and was constantly engaged in bettering family life. At 38 years of age, he had another 27 years of working life and even if his employment had continued to be that of a civilian mechanic on an air base he was entitled to annual increases in salary. As I have said, he was engaged in part-time employment and there was no reason to believe that that employment would not continue and even become more lucrative.
I have already cited the view of the Chief Justice of British Columbia and I also share his view that although the award was perhaps higher than I would have made I do not consider it to be so excessive as would represent a wholly erroneous estimate of the damage.
For these reasons, I would allow the appeal, quash the judgment of the Court of Appeal, and affirm the judgment of Anderson J. at trial. The plantiff is entitled to her costs throughout.
DE GRANDPRE J.—I would allow the appeal as proposed by my brother Spence. Not only do I agree with his conclusions but I also agree with all of his reasons except one: the impact of the income tax on the revenue of the deceased. My present inclination is to calculate the damages on the net income, after proper deduction for income tax. Even on that basis, however, I hold the view that the Court of Appeal interfered wrongly with the decision of the trial judge. Accordingly, at this time, I simply wish to reserve for future consideration in a proper case the question to which I have just alluded.
[Page 569]
Appeal allowed with costs.
Solicitors for the plaintiffs, appellants: Hope, Heinrich & Hansen, Prince George.
Solicitors for the defendant, respondent: Guild, Yule, Schmitt, Lane & Hutcheon, Vancouver.
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