1996 Date: 20001006 Docket: S.H. No. 124253/ 129883 IN THE SUPREME COURT OF NOVA SCOTIA BETWEEN: ROBERT LLOYD FOWLER, KIM FOWLER and CENTRAL EQUIPMENT LIMITED, body corporate -and- SCHNEIDER NATIONAL CARRIERS LIMITED, body corporate and MICHAEL MAGOON DECISION HEARD BEFORE: The Honourable Justice Robert W. Wright, in Chambers, at Halifax, Nova Scotia on September 6, 2000 WRITTEN RELEASE OF DECISION: October 6, 2000 COUNSEL: Dale Dunlop for the Plaintiffs (Robert and Kim Fowler) Scott Norton for the Defendants Janet Curry for the WCB on watching brief [1] On December 30, 1994 violent head on collision occurred on the Trans Canada Highway near Woodstock, New Brunswick between two tractor trailers driven by the plaintiff Robert Fowler and the defendant Michael Magoon respectively. Mr. Fowler was seriously injured in the accident and brought this action for the recovery of damages from Mr. Magoon and his then employer, Schneider National Carriers Inc. [2] By earlier disposition, the issues of liability and damages were severed. The issue of liability only was tried before civil jury on April 3-7, 2000 as result of which it was found that the accident was caused by the negligence of the defendants. The jury further found that there was contributory negligence on the part of the plaintiff Robert Fowler on account of his failure to wear seatbelt. In its verdict, the jury apportioned liability between the parties in the division of 57½% 42½% in favour of Mr. Fowler. [3] Following the trial, an Order for judgment was taken out directing the defendants to pay to the plaintiffs Robert Fowler and Kim Fowler 57½% of their damages to be assessed. With a judicial assessment of damages several months away, the plaintiffs have now brought application under Civil Procedure Rule 33.01(A) seeking an interim payment from the defendants. [4] Civil Procedure Rule 33.01(A)(1) reads as follows: Notwithstanding the provisions of rule 33.01, the court may order the defendant to make an interim payment of such amount as it thinks just, not exceeding reasonable proportion of the damages which in the opinion of the court are likely to be recovered by the plaintiff after taking into account any relevant contributory negligence and any set off, cross-claim or counter-claim on which the defendant may be entitled to rely, if the court is satisfied: (a) that the defendant against whom the order is sought has admitted liability for the plaintiff’s damages, or (b) the plaintiff has obtained judgment against the defendant for damages to be assessed. [5] An analysis of Civil Procedure Rule 33.01(A)(1) was made by Justice Goodfellow in Bogaczewicz v. Faulkner (1997) 1997 CanLII 1847 (NS SC), 181 N.S.R. (2d) 163 and again in Mahoney v. Amleco Leasing Ltd. (1999) 180 N.S.R. (2d) 164. Justice Goodfellow set out his analysis as follows: 1. The court “may order”. This clearly indicates the granting of authority to make an order, and the granting of such order is not mandatory or automatic. 2. The order is “an interim payment of such amount as the court thinks just.” This is the usual expression for the granting of discretion to the court in broad terms but, nevertheless, always to be exercised judicially. 3. “Not exceeding.” This is clear direction that in determining the amount of the interim payment, limitation exists on such amount as the court thinks just. 4. “A reasonable proportion of the damages which in the opinion of the court are likely to be recovered by the plaintiff.” This gives clear direction as to the extent of the limitation. 5. Once the court has established an opinion as to what is likely to be recovered, it is mandated to take into account any relevant contributory negligence set-off, cross-claim or counter-claim for which the defendant may have an entitlement. [6] In short, once the court is satisfied that the plaintiff has met the threshold requirement for an interim payment under subparagraph (a) or (b), it must strive with the evidence before it to form an opinion of what damages are likely to be recovered by plaintiff and it may then order an interim payment as it thinks just, within the limitation that it not exceed reasonable proportion of that projected amount. [7] In the present case, the defendants acknowledge that the plaintiffs have met the threshold requirement for entitlement to an interim payment where the plaintiffs have obtained an Order for judgment for 57½% of their damages to be assessed. The defendants further acknowledge that the plaintiff Robert Fowler is deserving of substantial interim payment (although not so for the plaintiff Kim Fowler on this application), given the circumstances of this case. Indeed, the defendants have offered an interim payment to Robert Fowler in the approximate amount of $168,000. This is predicated on the submission that for purposes of this application, the court should confine the interim payment to recognition of Mr. Fowler’s demonstrable special damages incurred to date (which are nearing the $300,000 mark), subject to the jury’s apportionment of liability. [8] Mr. Fowler, on the other hand, seeks an interim payment in the range of $400,000 $450,000. This is predicated on his counsel’s projection that his damages claim will likely be assessed in the final analysis at something in excess of one million dollars (less 42½% for contributory negligence). The heads of damages claimed consist of non-pecuniary loss, past income loss, loss of future income and other benefits, cost of future care and loss of valuable services. In support of these projections, the plaintiffs have filed extensive affidavits attaching several exhibits including medical reports and an actuarial report calculating their past and future losses. [9] As noted by Justice Goodfellow in his earlier decisions, an application for an interim payment under Civil Procedure Rule 33.01(A) is not substitute for an assessment of damages nor is it mini-trial of any sort. Rather, the court has the discretionary power to order an interim payment to plaintiff, based on its opinion of the amount of damages the plaintiff is likely to eventually recover, subject to the reasonable proportion limitation. [10] Where the level of the reasonable proportion limitation should be set in any given case is left to the discretion of the court. It is implicit in the Rule, however, that (a) the greater the certainty of the final outcome of liability (having regard to contributory negligence, set-offs, cross-claims or counter-claims) and (b) the greater the strength of the character of the evidence supporting the damages claim that is then before the court, the higher the proportion of damages that can reasonably be advanced by an interim payment. There is nothing in Civil Procedure Rule 33.01(A) which precludes an interim payment from being substantial amount in proper case. At the same time, Justice Goodfellow’s caution in Bogaczewicz is to be observed that the court must exercise some degree of caution to avoid any influence on the eventual outcome that will be decided at the assessment of damages hearing. [11] now turn to general review of the state of the evidence before me in support of the plaintiffs’ claims for damages. Mr. Fowler, with whom will first deal, provides in his affidavit summary describing the nature and extent of the injuries which he sustained in the accident. This summary is substantiated by the medical reports that have been filed to date and reads as follows: 7. As result of the accident, suffered catastrophic injuries, including severe comminuted fracture of my right leg which has necessitated number of operations, eventually leading to the fusion of the right knee; serious lower back injury resulting from fracture of one of the lumbar vertebrae; severe facial injuries; rib injuries, upper back soft tissue injuries; and am advised traumatic brain injury which has impaired my short term memory and learning abilities. [12] It is to be noted that the defendants have not yet had an opportunity to examine any of Mr. Fowler’s physicians on discovery nor to obtain an independent medical examination or other expert reports as they see fit. Nonetheless, the above described injuries are largely demonstrated by clinically objective medical evidence and the broad array of medical reports in evidence so far do not indicate any pre-existing medical condition(s). What they do indicate is that Mr. Fowler has been left with permanent disability from the accident, both in terms of significant physical limitations and impairment of certain mental functions. [13] Even though this medical evidence has not yet been tested by discovery examinations or an independent medical examination, it is likely, given the clinically objective nature of the medical findings to date, that Mr. Fowler will recover a substantial amount of non-pecuniary damages. [14] Typically in case such as this, the head of damages which represents the largest component of the claim and which, at the same time, is the most difficult to determine, is loss of future income. As mentioned, the plaintiffs have filed an actuarial report prepared by Gmeiner Actuarial Services Inc. dated May 18, 2000 which quantifies Mr. Fowler’s loss of future income claim at approximately $550,000. This calculation is based on the key assumptions that Mr. Fowler is totally and permanently disabled from returning to the workforce and that he would otherwise have continued to be steadily employed until age 65 based on his lengthy employment track record as long-haul truck driver. [15] What is yet to be determined through evidence to be gathered by the defendants, however, is what residual earning capacity Mr. Fowler might have that would mitigate his claim for loss of future income. There is evidence before me that the defendants offered the services of rehabilitation specialist to Mr. Fowler with view to getting him started in the operation of small excavation business. That has apparently been tried over the past years or so with marginal results. Although the extent, if any, to which Mr. Fowler has some residual earning capacity has yet to be explored by the defendants through further pre-hearing procedures, am satisfied of the likelihood, based on the evidence before me, that he will recover some measure of compensation for loss of future earnings. [16] The Gmeiner actuarial report also quantifies Mr. Fowler’s past loss of income at approximately $216,000 using valuation date of June 1, 2000. This head of damage has much higher degree of certainty of recovery, subject to any arguments of mitigation which the defendants might develop. [17] The Gmeiner report also quantifies Mr. Fowler’s claims for cost of future care and loss of valuable services at approximately $20,000 and $48,500 respectively. However, the assumptions underlying these claims have not yet been tested by the defendants and the evidence is not complete enough at this stage for the court to be able to form an opinion as to the likelihood of recovery of either of these heads of damages. [18] There is one other item of special damages pointed out by plaintiff’s counsel and that is Mr. Fowler’s apparent obligation to repay to the Workers’ Compensation Board medical aid costs expended on his behalf in the amount of $69,148.45. This obligation arises by virtue of s.5 of the Health Services and Insurance Act R.S.N.S. 1989, c.197 and was not disputed by defence counsel as an item of special damages. [19] Lastly, both counsel further agree that neither pre-judgment interest nor costs of the action are to be taken into consideration by the court for purposes of this application where the Rule speaks in terms of an interim payment of damages only. [20] In summary, the following factors support the entitlement of Mr. Fowler to substantial interim payment from the defendants: (a) Judgment has been obtained against the defendants, as reduced by the finding of contributory negligence aforesaid, with damages to be assessed; (b) Mr. Fowler is likely to recover substantial amount of non-pecuniary damages considering that his personal injuries and disabilities are substantiated largely by clinically objective medical evidence rather than subjective complaints. In reaching that conclusion, the court is mindful of the fact that the defendants have not yet availed themselves of the opportunity to discover any of Mr. Fowler’s physicians or to conduct an independent medical examination or to retain other experts as they see fit, any or all of which might well serve to reduce Mr. Fowler’s claim. There is unlikely to be, however, any radical change in either the medical diagnosis or prognosis that has been made, given the nature of the injuries sustained in the accident; (c) There is high degree of certainty that Mr. Fowler will recover substantial amount of special damages which are acknowledged to be nearing the $300,000 mark subject, of course, to the reduction for contributory negligence and any arguments of failure to mitigate that might be raised by the defendants. (d) Although far less predictable where the defendants have yet to fully explore the issue of mitigation through further pre-hearing procedures, the court is satisfied that Mr. Fowler is likely to recover some measure of compensation for loss of future earnings, given the nature and extent of his injuries and his steady employment record as truck driver spanning some 20 years. [21] After weighing all of these factors and having regard to the guiding principles reviewed in this decision, I have concluded that $250,000 represents a just amount of the interim payment that ought to be made to Mr. Fowler and an Order will issue accordingly. [22] Joining in this application for an interim payment is Kim Fowler, the wife of Robert Fowler. In the Statement of Claim, Ms. Fowler claims damages for the loss of valuable services previously provided by her husband and conversely, damages for the increased value of her own contribution to the household since the accident. As part of this application, she now seeks an interim payment that would extend as well to prospective damages for loss of future earnings. This relief is not presently pleaded in the Statement of Claim nor has there yet been production of documents by Ms. Fowler in this regard or any discovery on the issue. [23] What has now been presented to the court in support of her application is the Gmeiner actuarial report which includes calculation for loss of earning capacity for Ms. Fowler as well as for loss of valuable services. The present value of the loss of future income is valued at approximately $80,000 on the assumption that Ms. Fowler would have returned to the competitive workforce once her children were grown up and that she would likely have worked to retirement age of 61 with an annual loss of income of $6,202. At the time of the accident, Ms. Fowler’s activities were primarily those of homemaker. The Gmeiner report also quantifies the loss of valuable services claim on the part of Ms. Fowler at $48,500, making total damages claim of approximately $128,500. [24] The evidence to support the validity of this claim is far from complete at this stage and that which is before me has yet to be tested by the defendants in further pre-hearing discovery procedures. As mentioned, the claim for loss of future earnings on behalf of Ms. Fowler does not yet even form part of the pleadings. At this stage, the court is unable to form an opinion of what damages are likely to be recovered by Ms. Fowler at a final assessment of damages and it is therefore not appropriate to order that an interim payment be made for her benefit. [25] As to costs of this application, counsel have agreed that an appropriate amount to be paid by the defendants is $1500 plus taxable disbursements, which will be incorporated in the Order accordingly. [26] There is further complicating factor surrounding this application that wish to comment on. Mr. Fowler was entitled to various workers’ compensation benefits as result of the accident, primarily for temporary earnings replacement and the medical aid costs above mentioned. The Workers’ Compensation Board now asserts first claim against, and expects immediate payment from, any interim payment attained to the full extent of its costs associated with Mr. Fowler’s claim. The following is an account of those costs to date: i) Temporary Earnings Replacement Benefits (former Act) 40,738.32 ii) Temporary Earnings Replacement Benefits (current Act) 64,750.94 iii) Medical Aid Costs 69,148.45 iv) Vocational Rehabilitation 4,311.80 v) Permanent Impairment Benefit 3,077.85 Sub-total $182,027.36 10% Administration Fee Applied Against WCB Claim Costs 18,202.74 Legal Fees/Disbursements to April 10,2000 less HST 66,773.18 Account for Actuarial Report less HST 3,378.00 Total $270,381.28 Plus any additional WCB Claim Costs, Legal Fees etc. incurred until such time as the WCB is fully reimbursed costs associated to this claim. [27] The priority of the claim of the Workers’ Compensation Board against the interim payment which have ordered is not in issue before me on this application and therefore make no ruling on the point. However, urge the Board, in asserting its claim, to accommodate this application by acquiescing in substantial amount of this interim payment being paid directly to Mr. Fowler. Part of the rationale for the interim payment rule is to alleviate hardship of individual plaintiffs and it was designed to benefit plaintiffs personally in deserving cases. also observe that the Workers’ Compensation Board claim includes 10% administration fee and sizable amount for legal fees and disbursements which bear no connection whatsoever with the nature of the interim payment that have ordered. encourage the Board to take these considerations into account in relaxing the immediate enforcement of its claim.
In a trial of liability only, jury found defendants to be entirely responsible for causing motor vehicle accident. Plaintiff was found contributorily negligent and liability was apportioned 57.5% to defendant and 42.5% to plaintiff. Plaintiff suffered significant injuries and plaintiff and spouse applied for interim payment of damages. Application allowed in part; plaintiff awarded $250,000.00 as interim payment; spouse's application denied. Once court is satisfied plaintiff has met threshold requirement of a judgment or admission of liability, it must strive with evidence before it to determine what damages are likely to be recovered by plaintiff and may then order interim payment if it thinks just, within limitation that it not exceed a reasonable proportion of the projected amount. The greater the certainty of the final outcome of liability and the greater the strength of the evidence supporting the damages claim, the higher the proportion of damages that will be advanced. There is nothing which precludes interim payment from being substantial amount in a proper case but court must be cautious to avoid any influence on eventual outcome of damage assessment. Although there had not yet been discovery of plaintiff's doctors or an independent medical exam obtained, the plaintiff's injuries were largely demonstrated by clinically objective medical evidence and there was no evidence of any pre-existing condition. In such circumstances, a substantial sum could be ordered. Neither pre-judgment interest nor costs are to be considered by the court in such an application. The evidence in support of the spouse's application was far too incomplete and had yet to be tested by defendants in discovery. Court could not form opinion on what damages spouse was likely to recover.