C.A. Upholds Record Personal Injury Damages Award

Sandhu v. Wellington Place Apartments was one of the largest personal injury damages awards in Canadian history. The Court of Appeal recently dismissed an appeal from the trial decision (other than disallowing most of a $350,000 costs premium).

The award at trial was more than $17 million. The case arose out of a tragic fall from a fifth floor window by a 2-year old boy. The appeal raised several interesting issues.

The defence appealed from the jury’s award of damages for the cost of future care in an amount that exceeded even the highest of various scenarios put to it by the plaintiffs’ counsel in argument. However, the Court of Appeal held that there was evidence before the jury which, if accepted, would have produced a higher future care figure than those urged upon it by the plaintiffs’ counsel at trial and added, “clearly, there is no obligation on the jury to accept only the suggestions of counsel.”

The Court also rejected the defence arguments, that the non-pecuniary damages award (the maximum of $311,000) and the FLA awards to the plaintiff’s parents and brother ($100,000 each) were too high.

In the alternative, the defendants argued that even if the individual damages awards were allowed to stand, the cumulative total was too high and should be reduced. The Court called this argument “startling” and “plainly wrong”.

Evidence of remedial measures implemented after the accident had been admitted by the trial judge. The defence submitted that this had been an error. Again, the argument failed. The Court of Appeal said that the evidence was relevant, as possibly showing that the appellants had failed to maintain the building properly. And it rejected the argument that such evidence should be excluded for policy reasons (i.e., because allowing it to be introduced at trial would serve as a disincentive to potential litigants, to take remedial steps to correct dangerous conditions).

Finally, the trial judge had awarded a costs premium of $350,000, payable by the defendants. Her ruling was given prior to the Supreme Court of Canada’s decision in Walker v. Ritchie and Manufacturers Life Insurance Company v. Ward, a Court of Appeal case. Those decisions have made it clear that “risk premiums” cannot be awarded. Here, counsel for the plaintiffs sought to distinguish Walker and Ward on the basis that the $350,000 costs premium had been based only partly on risk. (She argued that the outstanding result achieved was another factor.)

The Court of Appeal was satisfied that risk had been the predominant factor that had led the trial judge to award the costs premium. However, the Court’s approach was to reduce the amount payable by the defence by $300,000. The net effect was that the defendants were ordered to pay $50,000 over and above the costs that had been agreed to between the two sides. (The rationale for this is not entirely clear to us from the reasons. The Court appears to have given a costs premium based on something other than risk, but we are uncertain what the criteria for such an award might be.)

Having reduced the party and party costs by $300,000, the Court allowed a cross-appeal by the plaintiffs’ solicitor, asking that she be permitted to add that $300,000 to the solicitor-client fees that had been approved by the trial judge.

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