IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20100429

Docket:
09 1139

Registry: Victoria

Between:

Lois
Keith McIsaac

Plaintiff

And:

Charles
Sylvester McIsaac

Defendant

Before: The Honourable Mr. Justice Wong

Oral Reasons for Judgment

In Chambers

[1]            
THE COURT: Judgment.

Introduction

[2]            
Before the court are cross-applications.  The
defendant under Rule 18A seeks to dismiss the plaintiff’s motor vehicle
personal injury claim on the basis of a prior settlement and release between
the plaintiff and ICBC.  The plaintiff seeks to rescind the settlement on the
basis that the bargain struck was unconscionable.

[3]            
I have concluded the settlement must be enforced. 
These are my reasons.

The Background

[4]            
On July 26, 2007, the plaintiff was a passenger
in a motor vehicle being driven by her husband, the defendant.  The defendant
lost control of the motor vehicle and a single vehicle motor vehicle accident
occurred.  The plaintiff was injured in the accident.

[5]            
There is evidence that the plaintiff was not
wearing her seat belt when the accident occurred.  The plaintiff’s evidence is
that she does not remember whether she was wearing her seat belt.

[6]            
The plaintiff, now 76 years of age, is a retired
person who sustained no wage loss as a consequence of the accident. 

[7]            
The plaintiff was hospitalized for a period of
time following the accident, and on July 31, 2007, notice of the accident was
given to the defendant’s insurer, ICBC.

[8]            
Craig Reimer, an ICBC adjuster, was assigned to
adjust the plaintiff’s claim, and upon being notified of the claim, immediately
set about making arrangements for the care, treatment, and rehabilitation of
the plaintiff’s injuries.  The plaintiff was attended to by a rehabilitation
specialist, as well as an orthopaedic surgeon, and her own family doctor. 

[9]            
In November 2007, following the plaintiff’s
period of convalescence and rehabilitation, and with reference to the reports
of the medical professionals involved with the plaintiff’s care, Mr. Reimer
raised with the plaintiff the prospect of settling her injury claim arising out
of the accident.  At that time the plaintiff indicated to Mr. Reimer that she
was not yet ready to settle her claim.

[10]        
Approximately one month later Mr. Reimer spoke
to the plaintiff again, and she agreed to a meeting with him to discuss the
settlement of her claim.  Prior to the meeting, Mr. Reimer had collected
medical evidence pertaining to the plaintiff, including consideration of the possibility
that the plaintiff’s injuries were permanent in nature, and had undertaken legal
research regarding quantum of damages relevant to the claim, and received
authority from his manager regarding settlement.

[11]        
On December 27, 2007, the plaintiff, accompanied
by her brother-in-law, attended at Mr. Reimer’s office, and after discussing
the claim, agreed to settle her tort claim for $21,500, and her future medical
rehabilitation benefits claim for $500, in exchange for a full and final
release in respect of both claims.

[12]        
There is no evidence that the plaintiff was under
any sort of legal or medical incapacity with respect to her ability to manage
her affairs.  The plaintiff has two years of post-secondary education, has no
difficulty with the English language, and reads as a hobby.  The plaintiff’s
evidence is that it is her general practice to read documents before signing
them.

[13]        
The plaintiff was aware that Mr. Reimer was
monitoring her medical progress, and that her medical caregivers were providing
information about her condition to Mr. Reimer.  The plaintiff had been involved
in previous personal injury litigation, which resulted in her receiving
financial compensation for her injury.  The plaintiff knew when she attended
Mr. Reimer’s office that the purpose of her meeting was to discuss the
settlement of her claim arising out of the accident. 

[14]        
The plaintiff attended the meeting with Mr.
Reimer, accompanied by her brother-in-law, who was permitted to participate in
the meeting, and with whom the plaintiff consulted regarding the
appropriateness of the settlement.

[15]        
In December 2007, the plaintiff knew that her
medical condition might be permanent, and in settling her claim she would have
no further claim for compensation against the defendant.

[16]        
The plaintiff’s medical condition arising out of
the accident has remained the same since December 2007, through to September
2009.

The Law and Analysis

[17]        
I agree with defendant’s counsel’s submission
that there are two alternative tests to assess the validity of the settlement. 
Also, to have a settlement set aside or voided, the insured must have been
unfairly induced to accept the settlement or release, and that the settlement
or release must also be grossly unfair or grossly inadequate.  Settlement and
release of a claim may not be set aside where the parties are not on equal footing
if the insurer can demonstrate that the settlement is fair and reasonable.

[18]        
There are two alternative tests to determine the
validity of a settlement.  Whether, when the settlement is looked at in the
light of the knowledge of the adjuster at the time the settlement was entered
into, the bargain was fair, just and reasonable, and whether the transaction
seen as a whole is not sufficiently divergent from community standards of
commercial morality that it should be rescinded.  See McCullogh v. Hilton
(1998) 63 B.C.L.R. (3d) 272 (b.c.c.a.)
and see also Gindis v. Brisbourne (2000) 72 B.C.L.R. (3d) 19 (B.C.C.A.),
particularly at paragraphs 42 to 44.

[19]        
A settlement with an unrepresented claimant will
not necessarily be invalid simply because all of the symptoms stemming from any
injuries have not been fully resolved.  Again, see McCullogh.

[20]        
There is no evidence that the injuries sustained
by the plaintiff were, at the time of settlement, any worse than what was
understood by the plaintiff and the adjuster, nor is there any evidence that
the plaintiff’s injuries have become any worse since the settlement was entered
into.

[21]        
Quite apart from any alleged inequality of
bargaining power, the plaintiff and the adjuster had a complete picture of the
plaintiff’s medical condition at the time of the settlement directly from the
plaintiff’s medical caregivers.

[22]        
Clearly on the evidence, the plaintiff relied on
and trusted the ICBC adjuster and their bargaining power were unequal, but the
ultimate question is whether viewed objectively, the agreement was
unconscionable and offended applicable standards of commercial morality.

[23]        
I am satisfied on the evidence that it cannot be
said that the plaintiff was taken advantage of by ICBC.  The plaintiff, upon
receiving the offer to settle at $22,000, could have consulted with a lawyer
before accepting the offer, but for reasons of her own chose not to.

[24]        
Counsel for the plaintiff now submits the
adjuster relied on outdated 12 to 18 year case law authorities as guidance on
damage quantum range, and did not make any adjustment for interim inflation. 
Be that as it may, the amount offered likely also factored in some discount for
contributory negligence by the plaintiff in not being seat belted at the time
of the accident.

[25]        
I might consider the amount settled by the
parties in this case to be somewhat low, but taking into account all of the
outlined factors related earlier, I cannot say the bargain struck was grossly
unfair and unconscionable.  In order to maintain consistency and predictability
in commercial transactions, public policy requires court enforcement of
contracts not found to be unconscionable. 

Conclusion

[26]        
Accordingly the defendant’s application to
dismiss the plaintiff’s claim against the defendant and ICBC is granted. 

[27]        
The plaintiff’s cross-application to rescind the
settlement is dismissed.

[28]        
I will hear from counsel on the matter of costs.

[submissions]

[29]        
THE COURT:  Costs will follow the event.

“Wong J.”