IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20110617

Docket: S096549

Registry:
Vancouver

Between:

Kirpal
Singh Sandhu

Plaintiff

And

Insurance
Corporation of British Columbia
F. Andrew Schroeder and Company

Defendants

Before:
The Honourable Mr. Justice Myers

Reasons for Judgment

I.                
Introduction

[1]      In December 2001, the plaintiff, Mr. Sandhu,
retained Mr. Schroeder to settle his personal injury claim against Mr. Moore
and his claim against ICBC for Part VII benefits.  (Previous to that, another
lawyer handled these claims, and before seeing Mr. Schroeder, Mr. Sandhu
filed a notice of intention to act in person.)  In January 2002, Mr. Schroeder
reached a settlement with defence counsel over the telephone. Mr. Sandhu
signed a release and consent dismissal order.  In this action – commenced in
September 2009 – Mr. Sandhu claims that he did not understand the agreement
and did not consent to a settlement of his claims.  This was so, he says,
because he was depressed and because he did not understand English well enough.
He claims damages against Mr. Schroeder.  His claim against ICBC can only
be construed as one to set aside the settlement agreement.  Both defendants
plead a limitation defence.

[2]      Mr. Sandhu represented himself.  He advised
that he unsuccessfully applied for legal aid.

[3]      Mr. Sandhu filed three different endorsed
writs and amended statements of claim, none of which met the rules of pleading.
Nevertheless, with the agreement of defence counsel, I have given the
pleadings the broadest interpretation possible and considered any possible
claim that could be construed from them or could arise from the facts as they
were adduced.

II.              
Facts

[4]      Mr. Sandhu is approximately 66 years old.  He
was born in India and obtained a grade 10 education.  He immigrated to Canada
in 1972 and worked in a sawmill.  In 1974 he bought and operated a dump truck.

 [5]     There is no dispute that on May 18, 1997 Mr. Sandhu
was, while on foot, struck by a car operated by Mr. Moore when Mr. Moore
was reversing from a parking space.  On March 23, 1999 Mr. Sandhu, on his
own behalf, filed a writ against ICBC claiming $1,000,000.  On April 22, 1999 Mr. Sandhu’s
counsel, Mr. Mohamedali, filed a writ against Mr. Moore.  ICBC
appointed Mr. Sandy Kovacs to act for it in both actions.  On April 27,
1999 Mr. Sandhu filed a notice of discontinuance in the action against
ICBC.  This was unexplained and both defendants acted throughout the course of
the litigation as if the action had not been discontinued.

[6]      There was both document production and examinations
for discovery in the Moore action, all when Mr. Sandhu was represented by Mr. Mohamedali.
The medical records indicate that prior to the accident Mr. Sandhu was
being treated for chronic pain, neck and back pain and clinical depression.  A
trial by jury was scheduled for June 3, 2002.

[7]      On March 26, 2001 Mr. Kovacs made an offer to Mr. Mohamedali
to settle the claim for $8,300 less $5,300 already paid to Mr. Sandhu for
Part VII benefits.  The offer was not accepted.  On October 23, 2001 Mr. Sandhu
filed a notice of intention to act in person.  On November 7, 2001 Mr. Mohamedali
telephoned Mr. Kovacs and explained that he was acting as a go-between for
the purpose of settlement.  He offered to settle Mr. Sandhu’s claims for
$25,000 plus disbursements.  Mr. Sandhu denied authorising Mr. Mohamedali
to make the offer and said that he wanted to settle his claim for $25,000,000.  However,
in his discovery, Mr. Sandhu admitted that he did not remember what
happened in this period.

[8]      On November 13, 2001 Mr. Kovacs wrote to Mr. Sandhu
declining Mr. Sandhu’s offer to settle.  In the letter, Mr. Kovacs
brought the defendants’ prior offer to settle to Mr. Sandhu’s attention and
urged Mr. Sandhu to retain legal counsel.  Mr. Sandhu denied
receiving the letter.

[9]      In mid to late December 2001, Mr. Sandhu
retained Mr. Schroeder to negotiate a settlement of his motor vehicle
claims, namely the action against ICBC and the action against Mr. Moore.  (As
I mentioned above, the action against ICBC was discontinued, but the parties
treated it as being extant.)  Because this was a limited retainer, Mr. Schroeder
did not file a notice of change of solicitor.  The fee arrangement was for Mr. Schroeder
to charge 35% on the difference between the offer ICBC had already made and
what he would be able to settle the case for.

[10]    Mr. Schroeder said he was provided the
documents pertaining to the claim, including the clinical records.  Mr. Schroeder
testified that Mr. Sandhu wanted to settle for $25,000, but that Mr. Schroeder
concluded it would be a difficult case in which to obtain any substantial
recovery, in part because of Mr. Sandhu’s pre-existing condition.

[11]    After his meeting with Mr. Sandhu, Mr. Schroeder
telephoned Mr. Kovacs to discuss settling the case.  During the
conversation Mr. Schroeder learned for the first time that Mr. Sandhu
had received advances.  He told Mr. Kovacs that he had instructions to
offer $25,000 “new money”.  Mr. Kovacs said that that settlement would
“not happen”.  Mr. Schroeder asked Mr. Kovacs to get back to him with
his client’s best offer.

[12]    Mr. Kovacs had concluded and reported to his
client that they had very little exposure on the case and that the likely
result of a trial would be that Mr. Sandhu would not be awarded any
damages.  This was based on Mr. Sandhu’s prior condition, his credibility
and an assessment that Mr. Sandhu was contributorily negligent.

[13]    In a subsequent December telephone conversation (the
exact date is uncertain) Mr. Kovacs offered Mr. Schroeder $12,500 in
addition to the $5,300 already paid to Mr. Sandhu.  Mr. Schroeder
said he discussed it with Mr. Sandhu and recommended he accept it.  He
explained to Mr. Sandhu that if he proceeded to trial and lost, he would
be liable for costs and told him to think about the offer over the Christmas
break.

[14]    On January 4, 2002 Mr. Sandhu went to see Mr. Schroeder.
Mr. Schroeder says he repeated the same advice he had previously given to
Mr. Sandhu and that Mr. Sandhu – although he was not happy with the
offer – gave him instructions to accept it.  While Mr. Sandhu was in his
office, Mr. Schroeder telephoned Mr. Kovacs and asked him to forward
a release and a consent dismissal order, which was faxed to his office while Mr. Sandhu
waited.  When Mr. Schroeder received the documents, he said he went over them
with Mr. Sandhu and explained to him that signing them would end his
claim.  Mr. Sandhu signed both documents.  Later, a cheque was sent to Mr. Schroeder.
He did not charge any fees for his services.

[15]    On January 25, 2002 Mr. Kovacs wrote Mr. Sandhu
stating:

Further to our telephone
conversation of today’s date we confirm that our client will not entertain any
further claims for expenses. The settlement which has been reached was
all-inclusive and all claims have been released by you.

Mr. Kovacs cannot recall the conversation to which
the letter refers, but his time records indicate that Mr. Sandhu came by
his office on January 7 and left further receipts for reimbursement.

[16]    Thus far I have taken the facts from the evidence of
Mr. Schroeder, Mr. Kovacs and the documentary exhibits.  I will now
turn to Mr. Sandhu’s version.

[17]    Mr. Sandhu says he understood that he was
settling only his claim for Part VII benefits.  He says he would not have
settled the Moore action for anything less than $25 million.

[18]    Mr. Sandhu blames his misunderstanding of the settlement
on his poor English and mental state.  With respect to the former he notes that
he had an interpreter for the discoveries and says that Mr. Schroeder
should have insured he had an interpreter at his meetings.  With respect to his
mental state, he points out that he was depressed at the time, and had recently
been hospitalised for depression for one week in 2003.

[19]    A number of letters were sent to Mr. Sandhu
through the course of the litigation from both Mr. Kovacs and Mr. Schroeder.
Mr. Sandhu denies receiving them, although they were sent to his home
address.  (Mr. Schroeder and Mr. Kovacs said that if any document had
been returned to them undelivered, they would have taken steps to make sure the
documents were delivered.)

III.            
Analysis

A.             
The Limitations Issue – Mr. Sandhu’s Mental State

[20]    Barring postponement, the limitation period for the
cause of action for negligence against Mr. Schroeder would have begun to
run when Mr. Schroeder last provided advice to Mr. Sandhu, namely
January 4, 2002.  That is also the date for which a cause of action to set aside
the settlement agreement with ICBC would have accrued.  The limitation period
for these claims is six years and therefore, but for the postponement argument,
expired on January 4, 2008.  This action was commenced on September 9, 2009.

[21]    Postponement of the limitation period was not pled
by Mr. Sandhu, nevertheless – with the concurrence of the parties – I will
treat it as if it has been pled, since Mr. Sandhu has put his mental state
in issue in a general way.  The relevant sub-sections of s. 7 of the Limitation
Act, R.S.B.C. 1996, c. 266, provide:

If a person is a minor or incapable

7 (1) For the purposes of this
section,

(a)        a person is under a disability
while the person

(i)         is a minor, or

(ii)        is
in fact incapable of or substantially impeded in managing his or her affairs,
and

(2)        If,
at the time the right to bring an action arises, a person is under a
disability, the running of time with respect to a limitation period set by this
Act is postponed so long as that person is under a disability.

(3)        If
the running of time against a person with respect to a cause of action has been
postponed by subsection (2) and that person ceases to be under a
disability, the limitation period governing that cause of action is the longer
of the following:

(a)        the
period that the person would have had to bring the action had that person not
been under a disability, running from the time the cause of action arose;

(b)        the
period running from the time the disability ceased, but in no case does that
period extend more than 6 years beyond the cessation of disability.

(4)        If,
after time has begun to run with respect to a limitation period set by this
Act, but before the expiration of the limitation period, a person who has a cause
of action comes under a disability, the running of time against that person is
suspended so long as that person is under a disability.

(5)        If
the running of time against a person with respect to a cause of action has been
suspended by subsection (4) and that person ceases to be under a
disability, the limitation period governing that cause of action is the longer
of the following:

(a)        the
length of time remaining to bring an action at the time the person came under
the disability;

(b)        one year from the time that the
disability ceased.

(9)        The
onus of proving that the running of time has been postponed or suspended under
this section is on the person claiming the benefit of the postponement or
suspension.

[22] Factors which the Court may consider in determining
whether a party is disabled in connection with s. 7 of the Limitation
Act include whether the plaintiff:

(a)           
is cognizant of the facts giving rise to
the cause of action;

(b)           
understands the nature and purpose of
proceedings including the role of judge, jury and counsel;

(c)           
comprehends the personal import of the
proceedings; that is, whether he is able to form a rational judgment about the
effect of the action on his interests; and

(d)           
is able to comprehend legal advice being
given to him and able to instruct counsel and make critical decisions.

Wirtanen
v. British Columbia
(1994), 98 B.C.L.R.
(2d) 335, [1994] B.C.J. No. 2439 at para. 20 (S.C.); Van Etten v.
Provincial Health Officer, 2007 BCSC 931 at para. 8.

[23]    Mental capacity is presumed.  Mr. Sandhu
provided no expert evidence as to his mental state or capacity.  In this regard,
the comments of Drost J. in Cowen v. Gray, 2001 BCSC 487 at para. 22,
are appropriate:

While there is no legal
requirement that the plaintiff provide medical opinion evidence, as noted
above, s. 7(9) places the onus of proof on Ms. Cowen to establish
that she was under a disability which rendered her incapable of, or
substantially impeded in, the   management of her affairs. In fact, I find it
difficult to imagine how a plaintiff could successfully establish that he or
she is "in fact incapable of or substantially impeded in managing his or
her own affairs" absent medical evidence to support such a finding.

[24]    A report was filed by Mr. Sandhu’s family
physician, Dr. Ngui.  The thrust of the report with respect to Mr. Sandhu’s
mental state was that he had suffered depression for an extended time.
Dr. Ngui did not say that Mr. Sandhu could not handle his own
affairs, was incompetent or did not have the capability to understand the
nature of the settlement.  Dr. Ngui noted that Mr. Sandhu had been
hospitalised for depression for about seven days, however the discharge report
in his file recorded that Mr. Sandhu’s symptoms were in remission when he
was discharged.

[25]    I do not rely on this for the purposes of reaching
my conclusion but I note that Dr. Ngui’s clinical records contained psychiatric
reports that pre-dated the settlement by several years.  In 1996, Dr. Ngui
referred Mr. Sandhu for his depression to Dr. Roy, a psychiatrist.  Dr. Roy
noted that Mr. Sandhu’s thought content was not abnormal, his thought form
was lucid and his judgment was “not impaired for legal purposes”.

[26]    Mr. Schroeder testified that he had no cause to
be concerned about Mr. Sandhu’s mental capacity.  Mr. Kovacs says he
found Mr. Sandhu to have been a difficult witness in discovery because he
was argumentative and evasive.  He also says he thought Mr. Sandhu was
“different” or a “little nutty”.  However, he had no concerns with respect to
his competence or capacity.

[27]    Mr. Sandhu has not met any of the criteria
addressed in Wirtanen.  With the possible exception of the one-week
period when he was hospitalised for depression in December 2003, I conclude
that Mr. Sandhu was not under a disability so as to postpone the running
of the limitation period.  His claim is therefore statute barred.

[28]    That finding is sufficient to dispose of the action
against both defendants, however I will briefly state my conclusions with
respect to the other issues, some factual and some legal.

B.             
Contractual Capacity

[29]    A contract with a mentally incapable person is
voidable.  To prove that a person is mentally incapable to contract, it must be
shown (amongst other things) that, at the time of the contract, he was not
capable of appreciating his own interest; in other words, the party must be so
insane as to be incapable of understanding what he was agreeing to at the time
of the contract: Re Rogers, Rogers v. Rogers, [1963] B.C.J.
No. 133 (C.A.) at paras. 12 and 27.

[30]    As will be apparent from my reasons with respect
to the limitation issue, I do not find that Mr. Sandhu lacked contractual
capacity.  Having reached that conclusion it is not necessary for me to
consider any other requirements to void the contract.

C.             
Mr. Sandhu’s Language Ability

[31]    Mr. Sandhu submits that one of the reasons he
did not understand the settlement was because of his lack of knowledge of
English.  He says his native language is Punjabi and that he has never had any
formal English education.  He argues that Mr. Schroeder should have ensured
that he had an interpreter.

[32]    I do not accept that Mr. Sandhu’s knowledge of
English prevented him from knowing what he was agreeing to.  Mr. Schroeder
and Mr. Kovacs both testified that they were able to communicate with Mr. Sandhu.
In fact Mr. Kovacs testified that during the trial Mr. Sandhu
approached him and told him that Mr. Sandhu’s son, a lawyer, was working
at his firm.  In response to that evidence, Mr. Sandhu replied that his
English improved after the accident from talking to his family who were born in
Canada.  I do not accept that: it contradicts Mr. Sandhu’s submission that
there was no one in his family he could speak to about the settlement.

[33]    During the trial Mr. Sandhu had the services of
an interpreter.  However, there were many instances where Mr. Sandhu began
to answer a question before the translation was finished.

[34]    Dr. Ngui testified that he communicated with Mr. Sandhu
mostly in English.  (Dr. Ngui also speaks some Punjabi.)  Mr. Sandhu
also attended numerous other medical appointments without the need for an
interpreter.

[35]    I conclude that Mr. Sandhu had the necessary
English skills to understand the settlement he signed.  That disposes of the
claim against Mr. Schroeder for failing to obtain an interpreter for Mr. Sandhu.

D.             
Non est Factum

[36]    Assuming this claim is advanced by Mr. Sandhu,
I conclude it fails for the simple reason that I find that he understood what
he was signing.  I would also note that Mr. Sandhu
was not, at the time of the settlement, a legal novice:  in June 1999 he
represented himself in a small claims trial in Provincial Court and in December
2001 he represented himself in a Supreme Court trial in front of Harvey J.

E.              
Damages

[37]    Mr. Sandhu has not established either that a
reasonably competent solicitor in Mr. Schroeder’s position would have
recommended a different settlement or that he would have obtained more than the
settlement if the case went to trial.

[38]    A brief review of the medical evidence that was
submitted to me, primarily as part of Dr. Ngui’s clinical records (I am
assuming without concluding that this evidence is admissible), leads me to
conclude that Mr. Schroeder’s assessment and the settlement were perfectly
reasonable.  I note the following highlights from the evidence pointed out by Mr. Schroeder:

a.       prior
to the accident of May 18, 1997 Mr. Sandhu suffered from long-standing
neck and back pain (described as chronic pain) and depression.  On a number of
occasions and for a considerable time he missed work due to these pre-accident
complaints;

b.       the
findings in the medical reports of Dr. McNeil, the Third Party Assessment
Clinic and the Canadian Back Institute paint a picture of a man who exaggerated
his injuries and denied any pre-accident problems;

c.       the
assessments of Dr. Roy indicated no change in mental status from
pre-accident to post-accident.

IV.           
Credibility

[39]    It is apparent that I do not find Mr. Sandhu to
have been a credible witness.  He misrepresented is knowledge of English and
his understanding of the agreement.  I do not believe him when he said he did
not receive the multiple documents which were emailed to his home.

V.             
Conclusion

[40]    I conclude that Mr. Sandhu was not incapable or
under a disability for the purposes of s. 7 of the Limitations Act
and that the action was commenced well after the limitation period expired.  Apart
from the limitation issue, which is sufficient to dispose of this action, I
also conclude that he had sufficient mastery of English to understand the legal
advice he received and the details of the settlement which he authorised.  Not
only did he have the capability, but he did, in fact, understand the
advice and the settlement.  No advantage was taken of him.  Therefore,
construing his pleadings as liberally as possible, he has not made out any
cause of action against the defendants or any reason to void the settlement.  Finally,
even if he were able to establish liability against Mr. Schroeder, he has
shown no damages.

[41]    The action is
dismissed against both defendants with costs.

“E.M. MYERS, J.”