IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: | Zen v. Readhead, |
| 2011 BCSC 190 |
Date: 20110216
Docket: M070125
Registry:
Vancouver
Between:
Paul Zen
Plaintiff
And
Michelle Readhead
Defendant
Before:
The Honourable Madam Justice Fenlon
Reasons for Judgment
Counsel for the Plaintiff: | K.C. Jarvis |
Counsel for Defendant: | L.P. Stevens |
Place and Date of Trial: | Vancouver, B.C. |
Place and Date of Judgment: | Vancouver, B.C. |
I.
Introduction
[1]
The 45-year-old plaintiff, Paul Zen, was injured in a car accident
five-and-a-half years ago. The defendant, Michelle Readhead, admits liability
for the accident but disputes the extent of the plaintiffs injuries and the
amount of damages, in particular the plaintiffs claim for loss of past and
future profits from three family businesses.
II.
Analysis
1.
What injuries has Mr. Zen sustained?
[2]
I begin with the accident. On April 1, 2005, Ms. Readhead ran a
stop sign. Her pick-up truck struck Mr. Zens sedan on the front passenger
side. Mr. Zens car ended up against a curb; Ms. Readhead’s came to
rest on the boulevard where it struck and damaged a tree. Both vehicles were
written off. Mr. Zen does not recall whether he struck the inside of his
car with any part of his body, but I find it probable, in light of the pain he
experienced immediately to his left arm and the fuzziness he experienced at
the scene and for a few weeks after, that his head and left side hit the
drivers side of the vehicle in the accident.
[3]
Mr. Zen claims the accident caused the following injuries:
a. soft
tissue injury to the left arm and elbow (90% resolved);
b. chronic
post-traumatic headaches;
c. injuries
to the soft tissue structures of the lumbar spine and pelvis resulting in
chronic mechanical pain;
d. cognitive
disturbance including diminished concentration and forgetfulness;
e. dizziness;
f. ringing
in the ears (tinnitus) and hearing loss;
g. short-lived
knee pain;
h. impaired
sleep; and
i. mood
disturbance.
The plaintiff says that the knee and left arm pain have resolved,
but the other injuries continue to impede his ability to work and enjoy life.
[4]
The defendant acknowledges that Mr. Zen suffered injuries as a
result of the collision, but says they were relatively minor soft tissue
injuries to his back and left side that substantially resolved within nine
months and were nothing more than a flare-up of pre-existing health issues.
[5]
The plaintiff led a great deal of expert evidence that supports his
claim that he continues to suffer from injuries caused by the car accident. As
in most cases in which there are no objective findings, much turns on the
credibility of the plaintiff; the medical experts based their opinions on the
symptoms and history the plaintiff reported to them — if the plaintiff did not
tell the truth about his health, the medical opinions cannot be relied on.
(a)
Should the plaintiff be believed?
[6]
Counsel for the defendant submits that Mr. Zen recovered fully from
the accident within months but simply will not admit it. She argues that Mr. Zen
is an opportunist who has intentionally exaggerated his pain behaviour and
reporting in the hope of being rewarded significant compensation.
[7]
In Bradshaw v. Stenner, 2010 BCSC 1398, Dillon J. summarized
the factors to be considered when assessing credibility at para. 186:
Credibility involves an
assessment of the trustworthiness of a witness testimony based upon the
veracity or sincerity of a witness and the accuracy of the evidence that the
witness provides (Raymond v. Bosanquet (Township) (1919), 59 S.C.R. 452,
50 D.L.R. 560 (S.C.C.)). The art of assessment involves examination of various
factors such as the ability and opportunity to observe events, the firmness of
his memory, the ability to resist the influence of interest to modify his
recollection, whether the witness evidence harmonizes with independent
evidence that has been accepted, whether the witness changes his testimony
during direct and cross-examination, whether the witness testimony seems
unreasonable, impossible, or unlikely, whether a witness has a motive to lie,
and the demeanour of a witness generally (Wallace v. Davis, [1926] 31
O.W.N. 202 (Ont. H.C.); Faryna v. Chorny, [1952] 2 D.L.R. 152 (B.C.C.A.)
[Faryna]; R. v. S.(R.D.), [1997] 3 S.C.R. 484 at para.128
(S.C.C.)). Ultimately, the validity of the evidence depends on whether the
evidence is consistent with the probabilities affecting the case as a whole and
shown to be in existence at the time (Faryna at para. 356).
[8]
The defendant argues that Mr. Zens testimony is inconsistent with
his pre-accident medical records which show that Mr. Zen was a man with
significant emotional and physical problems. By way of example, the defendant
points to six episodes of back pain reported by the plaintiff in May 1990,
May 1993, August and September 1993, January 1997, and
July 2002. Based on these episodes of back pain over the 16 years before
the accident, the defendant says that the plaintiff should not be believed when
he says he did not have a chronic back problem, but only the odd episode of
lower back pain.
[9]
The defendant also argues that the plaintiff should not be believed
because a Revenue Canada tax audit suggests that Mr. Zen improperly
claimed personal expenses (such as a trip to the Wickaninnish Inn with his wife)
as business expenses. The defendant described Mr. Zen as a man with few
ethical qualms, intoxicated with self importance and feelings of entitlement,
whose testimony should be rejected whenever it was not corroborated by
objective, reliable evidence.
[10]
There are times when a trial judge listening to submissions about the
credibility of a party is left to wonder if judge and counsel have heard the
same evidence. This is such a case.
[11]
Mr. Zen testified at length and was cross-examined for two days. I
found his evidence as a whole to be forthright, consistent, and inherently
believable. It was in keeping with the evidence of other witnesses, including
his co-workers and wife. Mr. Zens evidence, in general, was also
consistent with the documentary evidence and voluminous medical records.
[12]
It was apparent that Mr. Zen is a man who shows a brave face to the
world and is not comfortable talking about his own weakness. He gave
evidence in a direct, unemotional manner, but broke down and wept as he
described the way his injuries have affected his family life, in particular his
relationship with his three daughters and his wife. He described a life that
has been significantly changed by the accident.
[13]
Mr. Zen was an athlete, described by one medical expert as an
exercise junkie. Mr. Zen expressed frustration and anger about the
limitations he has experienced at work and socially since the accident. He
described daily pain from constant low-grade headaches and occasional severe
and sometimes disabling headaches that overwhelm him and knock him out. He
testified to ongoing severe low back spasms, and constant back pain.
[14]
Mr. Zen has followed all recommendations for treatment. He has gone
to extraordinary lengths to find relief for his symptoms, including
prolotherapy involving saline injections by needle into his skull, neck and low
back. These are not the actions of a malingerer or a man who is not highly
motivated and focused on getting well.
[15]
In summary on this issue, I found the plaintiff to be a credible witness. I
turn now to a consideration of the specific injuries reported by Mr. Zen.
(b)
Were the injuries caused by the accident?
[16]
In accordance with Athey v. Leonati, [1996] 3 S.C.R. 458, I must
determine first whether the accident caused Mr. Zens current problems,
and second, whether there were pre-existing injuries and a measurable risk
that the pre-existing condition[s] would have detrimentally affected the
plaintiff in the future, regardless of the defendant’s negligence (at para. 35).
[17]
The latter question is relevant because a plaintiff is entitled only to
be restored to his or her original position. In Athey, Major J. states
at para. 32:
The essential purpose and most
basic principle of tort law is that the plaintiff must be placed in the
position he or she would have been in absent the defendants negligence (the
original position). However, the plaintiff is not to be placed in a position better
than his or her original one. It is therefore necessary not only to determine
the plaintiffs position after the tort but also to assess what the original
position would have been. It is the difference between these positions, the
original position and the injured position, which is the plaintiffs loss. [Underlining
in original.]
i.
Low Back and Pelvic Symptoms
[18]
I have already alluded to the defendants submission that the plaintiff
had a history of mechanical back pain that would flare up on a regular basis. That
submission was supported by the evidence of Dr. Maloon, an orthopaedic
surgeon who was the only expert called by the defendant. Dr. Maloon found
no objective signs of injury and opined that the plaintiffs complaints were
consistent with his well established history of mechanical low back pain. It
was Dr. Maloons opinion that Mr. Zen would have experienced
flare-ups of back pain even without the collision. He attributed Mr. Zens
post-traumatic pain and dysfunction to the natural history of his back and the
wear and tear that most people Mr. Zens age experience.
[19]
I do not accept the assumption underlying Dr. Maloons report that Mr. Zen
had a well established history of mechanical low back pain. Mr. Zen has experienced
significant and ongoing low back and pelvic pain since the collision that has
prevented him from engaging in his usual activities. There is no evidence that Mr. Zen
experienced similar chronic problems prior to the accident. The back complaint closest
in time occurred in July 2002, almost three years earlier. Dr. Cortese,
a chiropractor, treated Mr. Zen five times between July 15 and
July 24, 2002. He said that the principal reason for Mr. Zens
attendance at that time was infra-scapular pain or tenderness in the mid-back
region. He also treated Mr. Zen for some posterior right hip pain and
noted that Mr. Zen had a perfectly normal range of motion for a man his
age in forward flexion, -80 degrees.
[20]
Dr. Cortese said that Mr. Zens condition when he saw him in
2008, five years post-accident, was dramatically different from his condition
in 2002. Mr. Zen sought treatment after experiencing a flare-up following
an attempt to ski on gentle slopes with his daughter. Dr. Cortese treated Mr. Zen
forty times, and all of his attendances related to the initial complaints he
presented with, including low back/pelvic pain, headaches, dizziness, ringing
in the ears and memory and visual problems. Forward flexion in January 2008 was
10 degrees, with virtually no mobility.
[21]
In short, I do not accept that Mr. Zens back problems
post-accident were the same as those he experienced before the accident. In the
16 years prior to the accident, Mr. Zen had five incidents of back pain
requiring medical treatment. He was asymptomatic for three years before the
accident. In the five years since the accident, Mr. Zen has had
significant and unremitting back pain with the occasional debilitating episode.
I find that the back problems experienced by Mr. Zen are due to the accident
and were not a pre-existing condition.
ii.
Headaches
[22]
Headaches are the plaintiffs second major complaint. Before the
accident, he had headaches two or three times a year that lasted about half a
day. He described some of them as feeling as though they were in [his] eye.
Mr. Zen claims he has experienced intense right-sided headaches since the
accident which feel like sharp spikes. He reports that the left-sided
headaches he experienced immediately following the accident have resolved,
although he sometimes has a sensation of pressure on his left side.
[23]
The defendant asserts that Mr. Zen had similar headaches before the
accident, pointing to a note in a physiotherapy record that reported Mr. Zen
saying he had occasional eye cluster headaches. Dr. Robertson, a
neurologist called by the plaintiff, unequivocally rejected that notion because
Mr. Zens headaches have none of the distinct qualities of cluster
headaches. Dr. Robertson was of the opinion that Mr. Zen has never
had eye cluster headaches but now suffers from post-traumatic headaches.
[24]
I accept Dr. Robertsons evidence. The plaintiff did not have a
headache disorder prior to the accident. He was involved in a significant
collision. He reported headaches shortly after the collision that have not gone
away in the five years since. I find that the plaintiff has experienced
headaches of a nature and frequency markedly different from those experienced before
the collision.
iii.
Hearing Loss and Tinnitus
[25]
Mr. Zen complains of loss of hearing and ringing in his right ear
(tinnitus) since the accident. The plaintiff relies on the opinion of Dr. Vance
Tsai, an ear, nose and throat surgeon, who concluded that Mr. Zens hearing
loss and tinnitus are a result of the motor vehicle accident. He explained that
tinnitus is closely associated with hearing loss and is the sound that occurs
when hearing is absent.
[26]
Dr. Tsais opinion was predicated on the flawed assumption that Mr. Zen
did not have hearing loss before the accident. When Dr. Tsai prepared his
report, he was unaware of a WCB mobile hearing screening test performed in
1991. That test showed marked right-sided hearing loss which is essentially the
same as the hearing loss measured post-accident. Dr. Tsai said that mobile
screening tests are not as reliable as lab hearing tests, but he also
acknowledged that it is unusual for the sound of a collision to cause hearing
loss.
[27]
I find that the plaintiff has not proven on a balance of probabilities
that his hearing loss and tinnitus were caused by the defendants negligence. In
any event, I find that the tinnitus and hearing loss have had an insignificant
impact on Mr. Zens functioning and enjoyment of life. The symptoms were
described by Mr. Zen as the least of his problems. Dr. Tsai said
that people with tinnitus cope with symptoms by learning to ignore them, and hearing
loss can be dealt with by obtaining a hearing aid.
iv.
Mood Disorder
[28]
Mr. Zen testified that since the accident he has lost much of his
outgoing life of the party attitude. He is irritable from pain and lack of
sleep and no longer looks forward to social events. Sonja Zen describes her
husband as someone who used to be the practical joker of the family and full
of fun. She says he is very different now: low energy, sad, and frustrated
with his limitations.
[29]
The defendant submits there is nothing new here because Mr. Zen was
seeing a psychologist, Dr. LaCombe, for about eight months before the
accident. He sought counselling at that time because he was having trouble
managing his anger.
[30]
Dr. LaCombe described the nature of her treatment of the plaintiff
pre-accident as helping him to deal with life stress that everyone commonly
experiences. According to Dr. LaCombe, Mr. Zen, and his wife
Sonja, the sessions helped; Mr. Zen was reacting to events in a more
relaxed manner prior to the accident. After the collision, the nature of Dr. LaCombes
treatments changed, focussing on the collision and the impact of Mr. Zens
injuries on him emotionally and psychologically. Dr. LaCombe testified Mr. Zens
complaints about sleep problems became much more pronounced and she recalled
observing him to be in so much pain that he had difficulty getting off the
couch. It was Dr. LaCombes view that the sessions after April 1,
2005 dealt primarily with the consequences of the car crash. She saw little
improvement during those sessions, which ended about two years after the
accident.
[31]
Dr. OShaughnessy is a highly qualified forensic psychiatrist. He
examined Mr. Zen in December 2008. In his opinion Mr. Zen is
suffering from an adjustment disorder with some depression and anxiety. He
found as follows:
He has difficulties in coping since the accident, in large
measure because he is no longer able to utilize physical activity as a means of
coping with the stresses of work and family life. As noted, he is in a high
stress position and although he tends to downplay the extent of the demands upon
him, it is clear that these are indeed substantial.
…
In my opinion the accident and in
particular the injuries, the headaches, and the sacroiliac joint pain are the
critical factors triggering his Adjustment Disorder and possibly aggravating
any sleep difficulties.
[32]
Mr. Zen agreed on cross-examination that in July 2007, he
reported to a psychiatrist retained by the defendant that he was no worse in relation
to his pre-accident mood and anger problems. However, Dr. OShaughnessy
observed in his report that Mr. Zen also denied depressed mood in the
interview with him even though Mr. Zen had many symptoms of depression,
including chronic fatigue and low energy commonly seen in depression, loss of
motivation, diminished competitiveness, loss of libido, as well as an inability
to experience the type of pleasure and joy he experienced in the past.
[33]
I accept Dr. OShaughnessys characterization of Mr. Zen
pre-accident as a man without mental illness who had sought counselling only to
cope with the usual problems of living; post-accident Mr. Zen had
significant social and vocational dysfunction. I find that Mr. Zen now has
an Adjustment Disorder with depressed mood due to pain from the injuries
sustained in the accident.
v.
Impaired Sleep
[34]
It is common ground that, prior to the motor vehicle accident, Mr. Zen
was not a good sleeper. He often had trouble falling asleep because he could
not unwind, but he never needed more than four to six hours a night with a top
up of eight hours on the weekend. Further, prior to the accident he did not
consistently have trouble staying asleep, which is now the case. Mr. Zen
and his wife describe a typical night as Mr. Zen roaming the house trying
to get comfortable. He starts out in bed, moves to the floor, and often to a
couch in the living room or the bench seat in the kitchen. He says that he cannot
get comfortable because of the pain in his lower back and hip. It is common for
him to get one-and-a-half to three hours sleep now instead of the four to six he
routinely got prior to the accident. To get a better sleep, he needs Tylenol 3
and morphine but he does not like to take these medications every night.
[35]
I find that Mr. Zen has proved that the pain from his injuries is
disrupting his sleep and that the impaired sleep is, therefore, attributable to
the negligence of the defendant.
vi.
Dizziness
[36]
Mr. Zen first noticed dizziness and reported it to his family
doctor five days after the accident. It is periodic, occurring one to two times
per month on average. Mr. Zen gets hot and dizzy and feels as though the
room is spinning. The episodes last from one to five hours and are totally
debilitating: he cannot do anything except lie down and wait for them to end.
This problem has improved since the accident because it occurs less frequently
now, but the intensity of the episodes has not abated.
[37]
Although there was no specific medical opinion that this symptom was
caused by the motor vehicle accident, I find, given the absence of such symptoms
prior to the accident and the temporal link to the accident, that it is more
probable than not that the motor vehicle accident is responsible for the
dizziness Mr. Zen is experiencing.
vii.
Cognitive Dysfunction
[38]
The plaintiff reports problems with memory and concentration since the collision.
He says he has trouble reading blueprints for work. Sonja Zen said he used to
be a voracious reader but has not finished a book since April 2005.
[39]
Diagnostic brain scans (a CT in January 2006 and an MRI in
September 2006), recorded normal findings. Neuropsychological testing was
undertaken but no medical/legal report was tendered documenting cognitive deficits.
During psychological testing in November 2006, the plaintiff said that he
can concentrate as well as ever. The plaintiff also reported that his memory was
good for things he feels are important although he now writes appointments in
his day timer. Dr. Salvino, Mr. Zens family doctor, first recorded
complaints relating to memory in August 2008, more than two years after
the accident, although he did record concentration problems on
November 21, 2005, with the next complaint in April of 2007. Mr. Zen
could not say with certainty when his alleged memory difficulties first arose.
[40]
I find that these symptoms are minor and are the side effect of poor
sleep and medication use attributable to the accident.
viii.
Elbow
[41]
Mr. Zen hurt his elbow in the collision. The pain in his arm
gradually diminished. He said it is 90% recovered and that he only experiences
some stiffness and soreness occasionally on exertion which does not affect his
physical activity level. I accept the opinion of Dr. Adrian, a medical and
physical rehabilitation specialist, that Mr. Zen suffered a minor soft tissue
injury to his left elbow as a result of the collision.
ix.
Plantar Fasciitis
[42]
Mr. Zen has had bouts of plantar fasciitis over the years. The
defendant argues that this condition has continued to plague Mr. Zen, has
prevented him from exercising, and is responsible for much of Mr. Zens
functional limitation and pain.
[43]
The defendant relied on a body diagram completed by Mr. Zen in 2009
on which he circled his left heel. Dr. Hamm, a specialist in occupational
medicine, was called to explain his records. He said nothing in the history,
physical exam, and review of records relating to that diagram disclosed any
functional limitations due to the foot.
[44]
I find that Mr. Zens plantar fasciitis has not been a problem
since the summer of 2004, when he underwent five physiotherapy treatments for
plantar fasciitis and obtained night splints and orthotics.
x.
Knees
[45]
Mr. Zen was a high level athlete, playing soccer for a year with a
professional club in Rome. He routinely ran 40 kms a week over two or three runs
at a pace of four-and-a-half minutes a kilometre. He did the Grouse Grind every
weekend in 42 minutes and played soccer two to three times a week. Sports injuries
to his knees necessitated four surgeries prior to the accident: his left knee
in 1988, right knee in 1995, left knee staple removal in July 2000, and a
partial meniscectomy in May 2001. Following all of these surgeries, Mr. Zen
successfully rehabilitated his knees, returning to his former level of
athletics and to long hours at work without difficulty.
[46]
Post-accident, Mr. Zen also had surgery to his left knee unrelated
to injuries from the accident. Sometime in 2008, Mr. Zen began
experiencing increasing pain in his left knee. The pain was significant enough
that he opted for private surgery in March 2010. An arthroscopy with some debridement
was done and was a complete success. Mr. Zen was back at work the
next day and testified at trial that the knee felt great.
[47]
I find that the plaintiff suffered significant pain in his knee during
2008, 2009 and until his surgery on March 25, 2010. The knee problem thus accounted
for some of his pain and functional limitations during this period. The
defendant is not liable for that part of Mr. Zens pain and suffering
experienced because of his left knee problem. I will return to this in the
assessment of non-pecuniary damages.
(c)
Summary
[48]
The issue of causation is to be determined by applying the principles
articulated by the Supreme Court of Canada in Athey v. Leonati and Resurfice
Corp. v. Hanke, 2007 SCC 7, [2007] 1 S.C.R. 333. In Athey, the court
held at 467:
It is not now necessary, nor has
it ever been, for the plaintiff to establish that the defendants negligence
was the sole cause of the injury. There will frequently be a myriad of
other background events which were necessary preconditions to the injury occurring.
… As long as a defendant is part of the cause of an injury, the
defendant is liable, even though his act alone was not enough to create the injury.
There is no basis for a reduction of liability because of the existence of
other preconditions: defendants remain liable for all injuries caused or contributed
to by their negligence. [Underlining in original.]
Applying the but for test, I find that all of Mr. Zens
ongoing injuries are due to the car accident other than the hearing loss,
tinnitus, and left knee complaint.
[49]
It follows that I do not accept the defendants position that the
plaintiffs injuries all resolved within nine months of the accident. This is
not a case of a plaintiffs baseline physical and psychological conditioning
being interrupted by a nine month flare-up of symptoms and then returning to normal
as the defendant submits. The plaintiff suffered significant and debilitating
injuries in this accident, most of which have become chronic. There is no other
reasonable explanation; they were not present prior to the accident and there
is a marked temporal proximity between the motor vehicle collision and the
onset of the injuries. The temporal connection and the evidence of the
plaintiffs experts, which was largely un-contradicted, lead me to conclude
that the plaintiff has proved that the defendants negligence caused the
injuries complained of with the exceptions I have noted.
2.
What damages should be awarded to Mr. Zen?
(a)
Non-Pecuniary Damages
[50]
An award of non-pecuniary damages compensates a plaintiff for loss of amenities,
pain, suffering, and loss of enjoyment of life.
[51]
In Stapley v. Hejslet, 2006 BCCA 34, 263 D.L.R. (4th) 19 (at para. 46),
the Court of Appeal outlined the factors a trial judge should consider when
assessing such damages:
The inexhaustive list of common factors cited in Boyd
[Boyd v. Harris, 2004 BCCA 146] that influence an award of non-pecuniary
damages includes:
(a) age of the plaintiff;
(b) nature of the injury;
(c) severity and duration of pain;
(d) disability;
(e) emotional suffering; and
(f) loss or impairment of life;
I would add the following factors, although they may arguably
be subsumed in the above list:
(g) impairment of family, marital and social
relationships;
(h) impairment of physical and mental abilities;
(i) loss of lifestyle; and
(j) the plaintiff’s
stoicism (as a factor that should not, generally speaking, penalize the
plaintiff: Giang v. Clayton, [2005] B.C.J. No. 163 (QL), 2005 BCCA
54).
[52]
Based on a nine-month mild soft tissue injury, the defendant submits
that an appropriate award of damages under this head is $30,000. Having found
that Mr. Zen has chronic injuries caused by the negligence of the
defendant, I do not accept this range of damages as appropriate.
[53]
The plaintiff relies on similar cases in which damages for pain and
suffering and loss of enjoyment of life of $100,000 to $130,000 were awarded,
and submits that an award of $120,000 should be made.
[54]
Awards of damages in other cases provide a guideline only. I must apply
the factors listed in Stapley to Mr. Zens particular case. Mr. Zen
is now 45-years-old. He used to be an outgoing, charismatic athlete who weekly ran
40 kms, did the Grouse Grind, and took an active role in the lives of his
daughters, all while working long days in the family business including most
Saturdays. Today he is a different man. He is sleep-deprived and in chronic
pain, which makes him irritable and prone to frustration and anger. He can no
longer push himself athletically, which was a central part of his life and the
way he managed stress. He has a diminished role in the lives of his
daughters, and in particular his youngest daughter, Olivia. Mr. Zens
relationship with his wife has been significantly affected and he has, in his
words, missed out on the best years of [his] life.
[55]
Taking all of this into account and excluding from this analysis the
pain and inconvenience caused by his left knee before the March 2010
surgery, I find that Mr. Zen is entitled to non-pecuniary damages of $110,000.
(b)
Special Damages
[56]
The plaintiff has proven that he spent significant sums on
rehabilitation. I find Mr. Zen was highly motivated, trying every therapy
recommended to him by his general practitioner and other specialists. The only
question before me is whether all of the expenses were reasonable ones. If so,
the defendant must compensate the plaintiff for these out-of-pocket expenses.
i.
Personal Training Sessions
[57]
Initially Mr. Zen participated in a KARP rehabilitation program
recommended and paid for by ICBC. The kinesiologist who worked with him was Mr. DiTomaso.
When that program ended, Mr. Zen continued to attend sessions with Mr. DiTomaso,
paying for them himself initially at KARP in 2006, and then resuming sessions
in 2010, when Mr. DiTomaso moved to Sport Synergy.
[58]
The defendant argues that personal training fees should not be allowed
for two reasons: first, because Mr. DiTomaso no longer keeps clinical
records so this cannot be characterized as treatment; and second, because the
plaintiff spent 10 to 15 hours per week before the accident on exercise that he
has now replaced with personal training.
[59]
I accept Mr. Zens evidence that the workouts with Mr. DiTomaso
are not a replacement for his previous exercise regime which focused on outdoor
running, soccer, and the Grouse Grind. The sessions are qualitatively different
and focus squarely on maintaining the health of his back and hips. Accordingly,
I find Mr. Zen is entitled to $10,640 under this category of special
damages covering expenses over the past five-and-a-half years.
ii.
Physiotherapy and Chiropractic Treatment
[60]
Physiotherapy and chiropractic treatments are recoverable at $640, and
$1,120 respectively.
iii.
Integrative Therapy and Prolotherapy
[61]
The plaintiff seeks to recover out-of-pocket expenses for less
traditional therapies such as prolotherapy and structural integration.
Prolotherapy involves injections of sucrose and lidocaine into ligaments for
pain relief. Mr. Zen received injections to his hip, back and head which
he described as really painful and unpleasant. On the recommendation of his
family doctor, he tried six treatments, but abandoned this modality because it
did not give him either temporary or sustained relief.
[62]
Structural integration involves painful deep tissue massage which often
leaves bruises on Mr. Zens hip flexor area. He has nonetheless continued
with this treatment because it has helped him with sitting and moving from
sitting to standing. He combines this with sessions with Mr. DiTomaso
because he has optimal flexibility then to do the exercises for his back and
hips. Of all the therapies he has received, Mr. Zen describes the
structural integration and personal training as the most helpful for managing
his lower back and hip problems.
[63]
The defendant objects to the payment of these unorthodox treatments on
the basis that the plaintiff incurred the expenses approximately four years
after the accident, which makes it unlikely they were related to any ongoing
injuries caused by the collision. That gap, however, is explained by the
plaintiffs effort to make use of more traditional modalities which failed to
give him relief. He undertook the integrated therapy and prolotherapy on the advice
of his family physician. I find these to be reasonable expenses. Mr. Zen
is awarded $10,411 for the cost of these therapies.
iv.
Psychological Counselling
[64]
Mr. Zen had been seeing Dr. Suzanne LaCombe in relation to
stress and anger management before the accident. He continued to see her until
May 10, 2007. Mr. Zen seeks compensation for all of the post-accident sessions
with Dr. LaCombe. The defendant opposes payment for any of them on the
basis that they were simply the continuation of counselling that had nothing to
do with the accident.
[65]
I find that most of the therapy after April 1, 2005, related to
management of ongoing pain and functional limitations. However, I also find it
probable that some of the sessions continued to address the problems which had
been on the table immediately prior to the accident. Accordingly, I allow
two-thirds of these expenses and award Mr. Zen $4,285.
v.
Mileage and GP Fees
[66]
Mr. Zen paid his family doctor $70 for completion of a short term
disability form and provision of clinical records to his disability insurer. He
is entitled to recover that sum from the defendant.
[67]
Mr. Zen gave evidence that he has incurred travel expense,
attending therapy over the past five-and-a-half years. He estimates those expenses
to be $1,260. I accept that he has incurred some expense under this heading and
award $500 in damages.
3.
Cost of Future Care
[68]
In order to recover damages under this head, the plaintiff must prove
that there is a real and substantial possibility that he will incur future care
costs as a result of the injuries sustained in the accident. Those future
expenses do not have to be a medical necessity, but they must be medically
justified and reasonable: Milina v. Bartsch (1985), 49 B.C.L.R. (2d) 33
(S.C.) at 78. The defendant made no submission on future care costs, other than
to say that the plaintiff has no ongoing injuries to warrant such care.
[69]
The plaintiff seeks damages to cover the cost of a private,
multidisciplinary residential pain management program of $17,500 recommended by
Dr. Hamm. However, in light of Dr. OShaughnessys and Dr. Adrians
recommendation for treatment by way of further psychological counselling in the
form of cognitive behavioural therapy for pain and/or adjustment disorder
management, I do not find private residential treatment justified or reasonable.
I therefore award $5,000 to compensate Mr. Zen for the cost of the future counselling
and pain management recommended by Drs. OShaughnessy and Adrian.
[70]
Mr. Zen seeks an allowance for non-MSP funded Botox injections for
his post-traumatic headaches four times a year. At a cost of between $520 and
$720 per session, the yearly cost would be $2,000 to $2,800. Mr. Zen has
not tried this treatment for his post-traumatic headaches. Dr. Hamm said
that Botox therapy could be considered. There is no certainty that it will be
effective. I find that the plaintiff has not proved that this is a reasonable
expense.
[71]
The final cost of future care sought by Mr. Zen is an allowance for
continued personal training, structural integration and physiotherapy. Dr. Salvino
and Dr. Adrian agree that the plaintiff should continue with these
programs. Dr. Adrian has recommended a physiotherapy allowance for acute flare-ups
of Mr. Zens low back injuries. Averaged over the five-and-a-half years
since the collision, Mr. Zen has incurred expenses for these three
treatments in the range of $6,000 per year.
[72]
I find it likely that Mr. Zen should be able to manage with fewer
personal training sessions as he learns how to exercise safely on his own. I
allow this expense at $4,000 per year to age 70. Using a multiplier value of
16,217, the present day value of that sum is $64,868 for Mr. Zens
lifetime.
4.
Loss of Income Earning Capacity
[73]
The plaintiffs ability to earn income is a capital asset. If that
capacity has been diminished, he is entitled to compensation for that loss.
[74]
This head of damage is both the most significant and most difficult
aspect of Mr. Zens claim. It is common ground that Mr. Zens salary
has not decreased because of his injuries. Rather, Mr. Zen claims that his
injuries have affected his ability to work and as a result, the three Zen
family companies have underperformed since his accident. He says this has led
to a decrease in corporate profits and a corresponding decrease in the
dividends available to him.
[75]
I begin by noting that a personal plaintiff is entitled to recover a
business loss suffered by a company which he controls if the loss is proven and
is directly linked to the injuries sustained: Everett v. King (1982),
34 B.C.L.R. 27 at p. 30, affd (1983) 53 B.C.L.R. 144.
(a)
Has the plaintiffs capacity to earn income been diminished?
[76]
The first question to be addressed is whether the plaintiffs earning
capacity has been impaired to any degree by the injuries caused by the accident.
The plaintiff must prove on a balance of probabilities the causal connection
between the accident-related injuries and impairment of his ability to work: Smith
v. Knudsen, 2004 BCCA 613 at para. 36. In order to assess this claim,
it is necessary to consider in some detail the corporate structure of the
companies and Mr. Zens role in the family business.
[77]
There are three companies selling two basic categories of aluminum rail.
East & West is the largest company. It is based in Vancouver and sells
primarily custom aluminum rail for large commercial projects. STAR Systems Inc.
(SSI) is located in Minnesota and STAR Calgary is located in Alberta. Both
sell primarily a pre-fabricated, snap tight aluminum rail system patented by
the Zen family. East & West has supplied the aluminum rail on 80 to 90% of
the high-rise buildings in the Lower Mainland, including the Shangri-La Hotel
and the Olympic Athletes Village.
[78]
Paul Zen and his brother Sergio Zen are the only shareholders in SSI and
STAR Calgary. Their mother holds the shares in East & West, having
inherited them from their father, but Sergio and Paul Zen are the beneficial
owners of those shares. Under the current structure, I find that the plaintiff
is entitled to half of the Zen companies profits.
[79]
Bidding and production of custom rail in particular requires careful
reading of architectural blueprints, called take-offs to determine where rail
is required (for example, balconies and stairwells) and how it needs to be
designed. Doing a take-off also involves identifying upsides for the contractor
— potential savings which could be achieved with a slightly different design
or approach. Even a small error in reading blueprints can be significant: missing
a few feet of rail, repeated over many floors and units, can be the difference
between turning a profit and losing money on a job.
[80]
As a child, Mr. Zen learned the business from his father. He took
over as CEO of the companies when his father retired in 2000 and has been the
driving force behind the companies success and growth since then.
[81]
New business development is critical to ensure a continuous flow of
future work, referred to as the pipeline. Bringing work in has been the most
important part of Mr. Zens contribution to the companies. Mr. Zens
strengths are his ability to deal with people and problem-solve with customers.
Mr. Zens enthusiasm was palpable as he described loving his work before
the accident, and especially the negotiation, the art of the deal. His
aptitude for closing deals and his drive were confirmed by the witnesses who work
with him. They also confirmed Mr. Zens evidence that he is not performing
at the same level now.
[82]
Before April 1, 2005, Mr. Zen worked six days a week putting
in 60 to 80 hours. Since the accident, he has not worked Saturdays and does not
work as many hours a day. I find he works about 30% less than he did previously
and that he is less effective and productive in many aspects of his job.
[83]
In summary on this issue, Mr. Zen has proved that his injuries
limit his capacity to perform work-related activities.
(b)
Has the plaintiffs loss of earning capacity caused income loss?
[84]
The next issue is whether the impairment has caused pecuniary loss to
the plaintiff in the past and whether it will continue to cause pecuniary loss
into the future.
[85]
The plaintiff says the Zen companies would have made more sales and
enjoyed greater profits if he had been functioning at his pre-accident work
capacity. He says that his loss of capacity to work will continue to affect
profitability and his dividends. An assessment of loss of both past and future
earning capacity thus involves consideration of hypothetical events. The
plaintiff is not required to prove these hypothetical events on a balance of
probabilities: the hypothetical event is to be given weight according to its
relative likelihood: Athey v. Leonati at para. 27. Accordingly,
the plaintiff must prove that there is a real and substantial possibility that
but for his injuries the company would have earned increased profits in the
past and would earn increased profits in the future.
[86]
I accept the evidence of Ted Caine, chief financial officer for the
companies, that the loss of Mr. Zens drive in marketing has negatively
affected the companies profitability:
Sales are generated by an
individual who is going out and seeking business. A company has a flow of
business from its customers … What I have observed about Paul, before and
after, him being the driver of the pipeline and the backlog of sales, is that he
was creating ongoing flow of business; there was no one who could replace
him; him being who he is being there so many years, and his drive comes from
him being the owner of the business; you don’t get that from any employee
normally. [Emphasis added.]
[87]
Determining the loss of sales is not straightforward. The companies
sales continued to grow after Mr. Zens accident from $17.5 million in
2005 to $22.7 million in 2009, with the pipeline peaking in 2008 at $27 million
before falling to its current level of $5 million. Because jobs are bid on and awarded
three to five years in advance of the company manufacturing and selling product
to a customer, the impact of a loss in marketing effectiveness takes three to
five years to appear in the financial statements.
[88]
The plaintiff initially tendered an experts report to prove lost sales
in two of the three Zen companies: SSI and STAR Calgary. The expert, a
chartered accountant, purported to measure the incremental loss of sales
flowing from Paul Zens injuries based on a correlation between building starts
and sales. The defendant objected to admissibility of the report. The
accountant was on the stand in direct and cross-examination for about two days.
He testified that he had not prepared an analysis of East & Wests lost
profits because the plaintiff was not a shareholder of that company. His
cross-examination was adjourned when it was discovered that he had not produced
all of his working files, in particular electronic documents. Those documents
demonstrated that a much fuller analysis of East & West had originally been
undertaken and then abandoned. The plaintiff took the position that it no
longer wished to tender the accountants report on the basis that it
understated the losses.
[89]
Plaintiffs counsel now proffers an entirely different basis for
determining losses to the companies attributable to Mr. Zens reduced
capacity to work. He says that at its peak in 2008 the pipeline had $27 million
worth of work, while today it has $5 million, a $22 million difference. Mr. Zen
testified that he thought about half of the lost incremental sales were due to
his poor performance and the other half to the economic downturn which occurred
in the fall of 2008. The plaintiff therefore submits that $11 million in decreased
sales are attributable to his injuries. Applying a conservative profit margin
of 15%, the lost profit to the company would be $1.65 million, $825,000 of
which would go to Paul Zen pre-tax. Post-tax, assuming a 50% income tax rate, Mr. Zen
says his loss is about $415,000. Given that there will be some savings on taxes
through payment out of dividends, the plaintiff estimates his loss from
decreased sales over the past five years at $500,000.
[90]
As for future income loss, the plaintiff has now hired effective
managers to market the companies products. Nonetheless, the plaintiff argues
that people hired to replace him will not be able to generate the same kind of enthusiasm
and sales. The plaintiff submits that the past can be used as a measure of the
future and argues that damages of $1 million gross ($500,000 grossed back up to
include taxes) would compensate Mr. Zen adequately for the next five
years loss of earning capacity due to decreased sales.
[91]
Quantifying loss of earning capacity using an earnings approach is one
of the two approaches that may be used. Garson J.A. observed in Perren v.
Lalari, 2010 BCCA 140 at para. 32:
[T]he plaintiff may prove the
quantification of that loss of earning capacity, either on an earnings
approach, as in Steenblok, or a capital asset approach, as in Brown.
The former approach will be more useful when the loss is more easily
measurable, as it was in Steenblok. The latter approach will be more
useful when the loss is not as easily measurable, as in Pallos and Romanchych.
[92]
While I accept that the loss of earnings approach is an appropriate way
to quantify damages in this case, I do not accept the particular calculation
used by the plaintiff. There is no evidence supporting an allocation of 50% of
lost pending pipeline sales to the economy and 50% to Mr. Zens
decreased work performance. Furthermore, sales made or lost in a given year do
not affect the bottom line of the companies for three to five years. The
accident occurred on April 1, 2005. The first losses attributable to the
accident could not have occurred until 2008 at the earliest, or 2010 at the
outside. Taking the middle ground and assuming decreased sales would have been
reflected in the companies 2009 calendar year, I find that Mr. Zen has
proved pecuniary loss from his reduced work capacity commencing in 2009.
[93]
Despite rejecting the plaintiffs calculation of lost earnings, I accept
that there is a real and substantial possibility that Mr. Zens injuries
have caused and will continue to cause a loss of sales to the companies and
potential dividends to the plaintiff. I must assess those losses.
[94]
Finch J.A. in Pallos v. Insurance Corp. of British Columbia
(1995), 100 B.C.L.R. (2d) 260 (C.A.) at 271 described the various approaches to
a loss of capacity claim as equally arbitrary. At the end of the day, in the
words of Huddart J.A., [t]he assessment of damages is a matter of
judgment, not calculation: Rosvold v. Dunlop, 2001 BCCA 1 at para. 18.
[95]
In the circumstances of this case, I conclude that it is appropriate to
assume that, but for his injuries, Mr. Zen would have generated 20% higher
sales in the years between the accident and trial. Using actual sales from 2000
to 2009, the average sales per year are $15,873,000. Twenty percent of that
figure is $3,174,600. Based on a 15% profit margin, lost sales of that
magnitude translate into lost pre-tax corporate income of $476,190. Mr. Zens
50% share of that corporate income would be $238,095. Using a rough estimate of
50% to reflect both the likelihood of corporate income tax and Mr. Zens
personal tax, I find that he has lost income of $120,000 for each of the years
2009 and 2010. This loss occurred despite Mr. Zens hiring of two
employees to cover the work he could not do.
[96]
In assessing the quantum of damages for loss of future earning capacity,
I note that there are both positive and negative contingencies that affect the
assessment. These include the economy, the potential for Mr. Zen to hire a
particularly driven and effective marketer, and the possibility that the system
sold by the Zen companies may be outperformed by a competitor.
[97]
There is evidence that new and effective sales people have been hired recently
for Star Calgary and SSI as well as for East & West. I accept it has not
been easy to find the right people and that the plaintiff has made adequate
efforts to do so prior to trial. I also find that it is likely that, while the
people hired will improve sales, they will not entirely replace the
sales-generating capacity of the plaintiff who, as an owner/operator, brought a
particular commitment and skill set to marketing the companies products.
[98]
I therefore assess loss of future earning capacity based on the loss of
half of the dividends flowing from a loss of sales of 10% per year to age 65. Using
average sales over the past ten years of $15.873 million, and assuming a 15%
profit margin, the company will lose pre-tax income of $238,095. Taking into
account corporate tax and the contingencies discussed above, I estimate Mr. Zens
gross loss of income per year at $100,000.
[99]
Based on a four-year lag in sales impact, the new sales people hired
would not affect sales volume for four years, which could justify continuing to
assume a 20% reduction in sales until 2014. I am nonetheless satisfied that a
10% reduction is an appropriate basis to assess damages, in light of the fact
that the multiplier does not take into account any negative contingencies other
than premature death. Using a future income loss multiplier of 14,850 (as
provided in the actuarial report), and assuming a loss of $100,000 per year,
damages for future loss of income due to decreased sales are $1,485,000.
[100] The
plaintiff also claims that he has lost and will continue to lose dividends
because the companies incurred additional expenses by hiring two employees to
cover work the plaintiff could do before he was injured. I turn now to that
issue.
[101] Claudius
Leica, a quantity surveyor, was hired in 2005 to help with reading blueprints. Mr. Leica
does not perform at the same level as Paul Zen, however, and has not entirely replaced
the plaintiffs diminished blueprint reading and bidding capacity. Sergio Zen
checks all of Mr. Leicas work; on one job Mr. Leica missed 300 feet
of railing on drawings — a mistake that cost the company $33,000 on a project
in Los Angeles. Mr. Leica is paid $50,000 a year. I find that Mr. Leicas
salary to trial would not have been incurred but for the accident. I also find
that he will not be required in future because of the decreased sales volume
and Sergio Zens efforts to cover this work.
[102] Tony Dente
was hired in 2006 as office manager. I find that Mr. Dente has effectively
replaced the management/administration role Paul Zen can no longer fill within
the office and has improved operations. Mr. Dente receives $106,000 per
year plus bonuses.
[103] While I
accept that the companies would not have hired Mr. Leica but for the
plaintiffs injuries, I do not find that to be so in relation to Mr. Dente.
The plaintiff was under considerable stress managing all of his work
responsibilities before the accident as the annual sales steadily grew from
about $9 million in 2000 to $22 million in 2009. Ted Caine said the number of
employees grew from 40 in 2000 to closer to 100 when the business was at its
peak in 2007/08 with a pipeline of $27 million. Despite Paul and Sergio Zens
evidence that they would not have hired Tony Dente if Paul had not been
injured, I find it likely that they would have needed some help with
administration based on the increased sales volume alone. However, I also find
it likely that they hired Mr. Dente about one year before they otherwise
would have. Taking into account the efficiencies brought to bear by Mr. Dente,
I find one year of the cost of his salary should be attributed to the accident.
[104] In
summary, I find that Mr. Leica and Mr. Dente have added a cost to the
company due to Paul Zens injuries of $250,000 and $110,000 respectively from
the date of their hiring to trial. It is probable that Mr. Zen would have
received half of those sums. Based on $180,000 in pre-tax earnings, and taking
taxes into account I set that loss at roughly $100,000.
[105] The
plaintiff claims he has also lost income because Sergio Zen received a raise
from East & West of $28,000 a year to compensate him for the blueprint
take-off work he was doing that had been done by Paul Zen. I am not satisfied,
however, given the non-arms length nature of that decision, that the increase
in Sergios salary should be treated as a loss to the plaintiff.
[106] In summary
on this issue, I set past loss of earning capacity at $340,000. I set future
loss of earning capacity at $1,485,000.
III.
Conclusion
[107] In
summary, damages are awarded as follows:
| Non-pecuniary damages | 110,000 |
|
| Special Damages: |
|
|
| Personal | 10,640 |
|
| Physiotherapy | 1,760 |
|
| Integrative | 10,411 |
|
| Psychological | 4,285 |
|
| Mileage and | 570 |
|
| Cost of |
|
|
| Counselling | 5,000 |
|
| Training and | 64,868 |
|
| Loss of | 340,000 |
|
| Future Loss | 1,485,000 |
|
| TOTAL: | $2,026,534 |
|
|
|
|
|
|
|
|
|
IV.
Costs
[108] If the
parties are unable to agree on costs, they may speak to the issue.
The
Honourable Madam Justice L.A. Fenlon