Melinda Wasylyk et al. v. The Corporation of the County of Simcoe

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Melinda Wasylyk et al. v. The Corporation of the County of Simcoe

3 April 2024 Ontario, NO.: CV-16-216.

The applicant, Melinda Wasylyk, by her mother and litigation guardian Kim Yaxley, brings this application under rule 7.08(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for court approval of the damages settlement reached between the parties in the amount of $16,000,000. Ms. Wasylyk sustained catastrophic injuries in a collision on Simcoe County Road 88 on January 12, 2011, the most severe being a traumatic brain injury.

In support of the motion the Court received a large, two-volume motion record including, inter alia, the affidavit of Mr. Boland, counsel for Ms. Wasylyk, sworn February 28, 2024; the affidavit of Ms. Yaxley sworn February 28, 2024; and a draft Judgment. I fully acknowledge culling portions of Mr. Boland’s affidavit in drafting these reasons.

For the reasons set out below, the application is granted, and the damages settlement is approved. Furthermore, Boland Romaine’s solicitor client account is approved in its entirety.

On November 12, 2011, Ms. Wasylyk was travelling eastbound on Simcoe County Road 88 (“CR88”) when she lost control of her vehicle and crossed over into the westbound lane. She was struck by Ms. Wos, who was let out of the action in 2021. Prior to the commencement of trial, the parties agreed to damages in the amount of $16,000,000.

The trial went ahead solely on liability. The Corporation of the County of Simcoe (“Simcoe”) took the position that Ms. Wasylyk was responsible for the collision, and it bore no responsibility.

On July 31, 2022, I released my reasons for decision finding Simcoe to be 100% at fault due to the disrepair of CR88, and liable for Ms. Wasylyk’s injuries.

Simcoe appealed. On November 24, 2023, the Court of Appeal released its reasons for decision, upholding the trial judgment in its entirety: Wasylyk v. Simcoe (County), 2023 ONCA 718, [2023] O.J. No. 5272.

Simcoe eventually abandoned its appeal to the Supreme Court of Canada.

Ms. Wasylyk’s Capacity

Dr. Terri Sands, a rostered capacity assessor, confirmed that Ms. Wasylyk is incapable of managing property. This motion is necessary given that Ms. Wasylyk is a party under a disability, and the damages settlement, as well as the solicitor-client accounts, require court approval.

The Negotiated Settlement

Ms. Wasylyk was born on March 10, 1992. She is currently single with no children. Her parents had separately shortly before the collision, and she was living with her father.

Ms. Wasylyk was enrolled in the healthy sciences program at Georgian College and had recently started her studies when the collision occurred. Her goal was to become a nurse.

As a result of the collision, Ms. Wasylyk is profoundly impaired. She suffers with severe impairments that affect her ability to walk, talk, stand, use her dominant right hand, reason, and care for herself. I recall being struck by the depth of her obvious injury during the trial when Ms. Wasylyk took the stand briefly

I am advised that her brain injury has left Ms. Wasylyk with impulsivity, disinhibition, impaired judgment, and lack of insight into her abilities. Labile mood is a major factor, with Ms. Wasylyk demonstrating irritability, lack of patience, outbursts and worsened mood when fatigued.

From the time Ms. Wasylyk was discharged from the hospital (1.5 years after the collision), up to the present, she has lived with Ms. Yaxley. She requires 24-hour attendant care, a role Ms. Yaxley has performed since mid-2012.

Ms. Wasylyk has not worked since the collision, and there is no reasonable prospect that she will ever be employable, even in a volunteer capacity.

For a brief period following the collision, Ms. Wasylyk had capacity, and she signed a Power of Attorney for Property and a Power of Attorney for Care, naming Kim Yaxley. Ms. Yaxley has clearly been acting in Ms. Wasylyk’s best interest as her Power of Attorney for Property. However, in the interests of providing another layer of protection, the plaintiffs seek to establish the Melinda Wasylyk Trust 2024, in which Ms. Yaxley will become a co-trustee along with corporate trustee Concentra Trust.

The total amount of the Judgment, inclusive of damages, pre-judgment interest, post judgment interest, fees, disbursement and taxes, is $18,315,371.25.

Two contingency forms were signed by Ms. Yaxley, one to handle the firm’s work to judgment, and the second to handle both the firm’s work to the resolution of the appeal, and the account of Lenczner Slaght LLP, the firm with carriage of the file at the Court of Appeal. Boland Romaine’s appeal fee was 3.5% of the total damages and interest. Lenczner Slaght billed on an hourly basis, and their account was to be paid monthly. Boland Romaine agreed to honour Lenczner Slaght’s monthly invoices. If Simcoe won the appeal, Lenczner Slaght’s account would be absorbed by Boland Romaine. If Simcoe lost the appeal, this expense would be recovered from the plaintiffs. Lenczner Slaght’s account was $152,164.48 plus HST.

I have reviewed both contingency fee agreements and find they are fair and reasonable in the circumstances. A significant part of the value of the legal services provided by Boland Romaine flowed from its assumption of a significant financial risk. The plaintiffs would not have been able to pursue their claim while paying the firm on an hourly basis.

The firm’s disbursements, and hours of legal work were exceptionally high, over $2 million, with no recovery for almost 10 years.

Boland Romaine was the third firm with carriage of this file. Morse Shannon LLP and McLeish Orlando LLP each had accounts which had been protected by Boland Romaine: $60,830 plus HST, and $32,832.80 plus HST, respectively. These firms submit their fees for the work performed in advancing Ms. Wasylyk’s accident benefits claim, and advancing the tort claim to the pleading stage.

At the pre-trial, the judge posited the plaintiffs’ odds of success at trial at 50%. By that juncture the firm had paid $682,123.84 in disbursements and carrying costs, and had expended thousands of hours of legal work. As Mr. Boland affirmed, Ms. Wasylyk’s file came with the largest risk his firm had ever taken on – a different outcome would have been financially devastating for Boland Romaine. At that juncture the plaintiffs were willing to settle their claim for $8 million.

In Cogan v. M.F., 88 O.R. (3d) 38, at para. 42, Smith J. set out the following factors that a reviewing court should consider when reviewing a contingency fee agreement for approval, as articulated by the Court of Appeal in Raphael Partners v. Lam, [2002] O.J. No. 3605

Therefore, when a contingency fee agreement is being presented for approval by the court, the following factors must be considered:

(a) the financial risk assumed by the lawyer, which is included under likelihood of success, the nature and complexity of the claim, and the expense and risk of pursuing it;

(b) the results achieved and the amount recovered;

(c) the expectations of the party;

(d) who is to receive an award of costs; and

(e) achievement of the social objective of providing access to justice for injured parties, including injured children and parties under disability. I find that these factors must be accorded much greater weight than the time spent by the lawyer.

The breakdown of the total settlement funds is as set out by Boland Romaine:

Plaintiffs’ Net Recovery and Solicitor Client Costs

Settlement $18,315,371.25

Assessable disbursements 295,547.21

Partial indemnity fees and tax 1,303,696.74

Post Judgment interest 716,127.33

Damages (settlement – assessable disbursements – partial indemnity + post interest) $16,716,127.30

 

Continency Fee Agreement #1 (30%) and #2 (3.5%) 33.5%

Solicitor client fee (33.5% of damages) $5,599,902.65

Tax 727,987.34

Total Fees and tax $6,327,889.99

 

Boland Romaine LLP Fees $5,354,075.01

HST 696,029.75

Payable to Morse Shannon LLP 60,830.00

HST 7,907.90

Payable to McLeish Orlando LLP 32,832.80

HST 4,268.26

Payable to Lenczner Slaght LLP 152,164.84

HST 19,781.43

 

Total disbursements (assessable + unassessable + carrying costs) $513,151.26

Net client recovery (settlement – total fees and tax – total disbursements) $11,474,330.00

 

The net recovery to Ms. Wasylyk is $10,315,371.25.

The net recovery to Ms. Yaxley in respect of both her FLA claim and her attendant care services is $897,135.39.

The net recovery to Mr. Wasylyk in respect of his FLA claim is $117,692.95.

The net recovery to Ms. Wasylyk’s sister, Rachelle Wasylyk, in respect of her FLA claimis $69,025.14.

From Ms. Wasylyk’s $10,315,371.25, $8 million will be structured with Henderson Structured Settlements. Monthly payments of $20,297.37 are indexed annually and will run for the entirely of Ms. Wasylyk’s life. This is in addition to Ms. Wasylyk’s accident benefit settlement of $1,311,766, which was also structured. Indeed, when the accident benefit structure is considered alongside the tort settlement funds, nearly 80% of Ms.Wasylyk’s net recoverable funds have been structured.

The balance of the tort funds, $2,390,476.54, will remain unstructured. These funds will thus be readily available for housing, home modifications, specialized transportation, incidental or unexpected costs, recreational pursuits, and discretionary spending. This amount will be managed through the Self-Benefit Trust in Ms. Wasylyk’s name reference above, which will also include the payments Ms. Wasylyk receives from the structures.

Conclusion

As Smith J. wrote in Cogan:

I find that where a substantial recovery of damages has been obtained by the efforts of the solicitor in a situation where following the contingency fee agreement results in the recovery of a large fee for the solicitor, in circumstances where the result obtained was outstanding, where the best interests and future care needs of the child have been met, where substantial financial risk has been assumed by the law firm, where a vulnerable party has obtained access to justice and been fairly compensate for injuries suffered, then in those circumstances where the percentage is reasonable and the agreement was fairly entered into, I find that the contingency agreement should be approved even if the recovery by the law firm is very high.

These words are wholly applicable here. Boland Romaine obtained an outstanding result for Ms. Wasylyk. It took on not only a substantial financial risk, but a risk that the statutory defences available to Simcoe County would have protected it.

It bears noting that Boland Romaine do not seek to enforce a number of the provisions contained in the contingency fee agreement that it would benefit from, forgoing an amount approaching $1.7 million.

Ms. Wasylyk’s best interests and future care needs have been very well met, and Boland Romaine provided the platform upon which access to justice was gained. The firm should be rewarded pursuant to the contingency fee agreement.

Judgment to go per draft signed.

Find more details about this case in the PDF document.

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