IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20140526

Docket: M114304

Registry:
New Westminster

Between:

Peter Rhys Morgan

Plaintiff

And

Kelly Galbraith

Defendant

Before:
The Honourable Mr. Justice McKinnon

Supplementary
Reasons: as per direction from the Court of Appeal, Morgan v. Galbraith,
2013 BCCA 305, from the Supreme Court decision Morgan v. Galbraith, 2012
BCSC 576

Reasons for Judgment

[1]            
On April 20, 2012 I filed reasons for judgment (indexed at Morgan v.
Galbraith, 2012 BCSC 576) after a nine day trial to assess damages
flowing from a motor vehicle collision. I awarded the plaintiff $700,000 for
future loss of earning capacity less 30% for his failure to mitigate for a
total of $490,000. For past income losses I awarded the sum of $61,483 less 30%
for a total of $43,038.10.

[2]            
The defendant appealed and the plaintiff cross appealed. The British
Columbia Court of Appeal heard the appeal (reasons are indexed at 2013 BCCA
305) and determined that the matter should be returned to me to:

1.       Determine
whether the future loss of earning capacity should be assessed on an earnings
approach or capital asset approach;

2.       Assess
the loss on whatever approach is used with sufficient detail to permit
appellate review; and,

3.       Explain
the rationale for awarding past income loss so as to permit appellate review.

[3]            
Both parties made further submissions before me on this matter.

[4]            
The parties agree that the assessment method for future loss of earning
capacity should be the capital asset approach, which was the approach used at
trial. The plaintiff submits that the award of $700,000 was appropriate; the
defendant submits that my findings of fact made at trial support an award for
significantly less than $700,000.

[5]            
With respect to the past income loss, the plaintiff contends that given
the evidence established at trial, there ought not to have been any deduction
for failure to mitigate. He does not dispute the deduction on the future
earning capacity loss. The defendant submits that, as the Court of Appeal made
no comment on this issue, I am foreclosed from re-visiting it.

[6]            
I accept that one of my tasks is to “explain” the rationale for awarding
$61,483 for past income loss. However, in my respectful view I am not required
to re-visit the finding that a 30% reduction is appropriate under this heading.
At para. 80, the Court of Appeal said:

[80]      Although
the judge did not explicitly find the extent to which lacrosse aggravated Mr. Morgan’s
long term condition, in my view the judge’s findings support his conclusion
that 30% was a reasonable reduction for Mr. Morgan’s continued pursuit of
lacrosse in the face of both expert and his family’s advice that he should not
play. It is also consistent with his similar reduction of the award for future
loss of earning capacity which is also a prospective award.

[7]            
I will first address the award for past income loss and then turn to the
future loss of earning capacity.

Past Income Loss

[8]            
As to my findings of fact, I determined that the plaintiff would most
probably not have remained with the Royal Bank of Canada (“RBC”) for the rest
of his working life. I also found that he failed to take reasonable steps to
mitigate his losses by not returning to RBC, notwithstanding their willingness
to accommodate his special needs. Further, I found that his insistence upon
continuing to play professional lacrosse aggravated his motor vehicle related
injuries.

[9]            
The Court of Appeal may have interpreted my reasons as meaning that I
found the plaintiff would not have returned to RBC or banking generally. However,
what I said in my reasons was that I was not satisfied he would have stayed
there “for the rest of his working life”. Although I did conclude that he lost
interest in the RBC job after the collision and pursued his passion playing
lacrosse, I did not find that he would have left on December 7, 2006 were it
not for the collision. My conclusion was that given the pain he was in, he
could not work at both the bank and play lacrosse, so he opted for his
preferred choice, lacrosse.

[10]        
The defendant complains that while she accepts the plaintiff suffered a
loss to his income between September and December of 2006, he actually made
quite a bit more playing lacrosse, thus he should not have received the $61,483
at all.

[11]        
I note that in assessing an amount for past income loss, it is not just the
actual income lost but rather the capacity to earn income that should be
compensated. In Rowe v. Bobell Express Ltd., 2005 BCCA 141, the Court of
Appeal said at para. 30:

[30]      Thus,
in my view, a claim for what is often described as “past loss of income” is
actually a claim for loss of earning capacity; that is, a claim for the loss of
the value of the work that the injured plaintiff would have performed but was
unable to perform because of the injury.

[12]        
I accept that I could have been more explicit in determining the
methodology when assessing the past loss of income. I ought to have emphasized
the need to consider “loss of capacity”. At bar, the plaintiff lost the
capacity to work both at RBC in banking and play professional lacrosse. Thus,
even though the plaintiff earned more money in the immediate years following
the collision, he still lost the capacity to work at RBC and play lacrosse at
the same time. I find he should be compensated for that.

[13]        
I note that even when a loss is easily (or more easily) quantifiable, it
remains the case that the lost capacity is being compensated. The Court of
Appeal in Perren v. Lalari, 2010 BCCA 140, reaffirmed this point at
para. 12:

…however, even where the loss is assessable in a measurable
way (as it was in Steenblok), it remains a loss of capacity that is
being compensated.

[14]        
The Court of Appeal in Rowe adopted the comments of the
Australian High Court that address the conceptual difficulty of quantifying a
loss of capacity:

[35]      Earning
capacity is an intangible asset. Its value depends on what it is capable of
producing. Earnings are evidence of the value of earning capacity but they are
not synonymous with its value.

[15]        
These authorities identify the difficulty of evaluating an intangible
asset but I find support for the notion that in some cases, earnings are the
best evidence of the value of a person’s earning capacity. The plaintiff lost
his capacity to work both at RBC and play lacrosse at the same time for the
duration of the six years leading up to trial. The best way, in my respectful
view, to measure that loss is by examining what he would have earned working at
RBC during that time. I relied upon the expert Mr. Benning when arriving at a
figure of $61,483. He assumed that the plaintiff would have continued to work
at RBC past December to the time of trial. The fact that he went on to earn
more for a few years does not mean his “capacity” to do what he was doing
before was not lost. It was.

[16]        
Although I did not accept that Mr. Morgan would have remained with RBC
to the date of trial, I remain convinced that the figure provided by Mr.
Benning remains the most satisfactory way of measuring the loss of capacity
that Mr. Morgan suffered. I considered the figure to be reasonable.

[17]        
I decline to reduce the award of $43,038.10 ($61,483 – 30%).

Future Loss of Earning Capacity

[18]        
As indicated earlier in this judgment, both parties preferred the
capital asset approach when assessing future loss of earning capacity. I
accepted that approach at trial (see para. 60 of my trial judgment) and have
not changed my mind on that score.

[19]        
In their reasons, the Court of Appeal said this at para 56:

[56]      If the
assessment is still to be based on the capital asset approach the judge must
consider the four questions in Brown in the context of the facts of this case
and make findings of fact as to the nature and extent of the plaintiff’s loss
of capacity and how that loss may impact the plaintiff’s ability to earn income.
Adopting the capital asset approach does not mean that the assessment is
entirely at large without the necessity to explain the factual basis of the
award: Morris. V. Rose Estate (1996), 23 B.C.L.R. (3d) 256 at para. 24,
75 B.C.A.C. 263; Mulholland (Guardian ad litem of) v. Riley Estate
(1995), 12 B.C.L.R. (3d) 248 at para. 43, 63 B.C.A.C. 145.

[20]        
I agree with the submissions made by the plaintiff that at trial I found
only that the plaintiff preferred a career playing lacrosse over banking.
At para. 9 of my reasons for judgment, I noted that in light of the collision,
coaching may be the plaintiff’s best option but I made no finding that he
probably would have chosen to coach lacrosse as his ultimate career were
it not for the collision.

[21]        
Although I did not say so in my trial judgment, it is my view that
absent the collision, Mr. Morgan most probably would have remained at RBC and
played lacrosse for some time. I find that he would have eventual left RBC to
pursue a career playing lacrosse professionally until such time as it was no
longer feasible and then he would have returned to banking or some other
equally viable option.

[22]        
Banking offered the plaintiff an opportunity to realize his potential
given his educational qualifications and in particular his degree in business
from Simon Fraser University. It also offered significantly greater income than
that afforded to a high school lacrosse coach. In my view, it is likely that
absent the collision, Mr. Morgan would have returned to the banking industry or
some similarly remunerative business/financial position at some later point in
his life.

[23]        
I find that Mr. Morgan has met the four part test in Brown v. Golaiy
(1985), 26 B.C.L.R. (3d) 353 (S.C.). He has demonstrated that the collision
has rendered him less capable overall of earning income from all types of
employment. His injuries have limited his ability to sit for long hours and
advance in the positions he might otherwise have obtained. I find he is less
marketable or attractive as an employee to potential employers. He will require
special accommodation for many of the positions his education has prepared him
for. I also find he has lost the ability to take advantage of all job
opportunities that might have been open to him. The collision forced him to alter
his previous lifestyle as he could not both work at the bank and play lacrosse
at the same time; his hiatus from banking came earlier than it may otherwise
have and he lost opportunities to advance in the banking industry. Finally, I
find he is less valuable to himself as a person capable of earning income in a
competitive labour market. He has resiled himself to coaching lacrosse because
it is related to his ultimate passion of playing lacrosse but he is unable to
fulfill his potential of combining his passion with his career potential.

[24]        
I agree with the plaintiff that the best way to quantify the loss of
capacity is to look at the average lifetime earnings he might have earned based
on various viable career options. The expert report supports an average figure
of $1,402,543 which is his quantified “asset”.

[25]        
In my view, Mr. Morgan did not lose his entire (future) asset, and he
still has the educational background and skill to pursue some careers; however,
I find that he will not be able to advance as far in these careers in light of
the damages resulting from the collision. He has lost some of his asset, his
capacity to earn, and it is this that is being compensated. The plaintiff
suggests he lost 50% of his asset. That seems reasonable to me. Given my
finding that he has lost 50% of this asset, the quantified loss for Mr. Morgan
would be approximately $700,000.

[26]        
In making this finding I acknowledge that my trial judgment concluded
that the projected lifetime earnings of 1. 5 million dollars was “very speculative”.
However that was based upon my finding that it was unlikely he would have
remained with RBC for his lifetime. To be clear, I find he would have taken a
break from banking at some point in his career to pursue playing lacrosse professionally
and when that ended, he would have returned to banking or some other
business/financial position full time and played lacrosse on the side as he did
before. This finding coincides with the award because the experts opined that
based upon all viable careers, not just a banking career with RBC, he had the potential
(i.e. the capacity) to earn $1,402,543 based on his education and experience.

[27]        
In the result I find that based upon the capital asset approach, and
factoring in both the 50% loss and the 30% deducted for failure to mitigate,
the figure of $490,000 is the appropriate amount to compensate the plaintiff’s loss
of future earning capacity.

[28]        
Judgment accordingly.

“The
Honourable Mr. Justice McKinnon”