Szendroi v. Vogler, 2011 NSCA 37

NOVA SCOTIA COURT OF APPEAL Citation: Szendroi v. Vogler, 2011 NSCA 37 Date: 20110503 Docket: CA 343734 Registry: Halifax Between: Christopher Szendroi and Carole Sheehan Appellants v. Richard Vogler Respondent Judge: The Honourable Justice Peter M. S. Bryson Motion Heard: April 14, 2011, in Chambers Held: Motion for a partial stay of the January 27, 2011 order of the Honourable Justice Gerald R. P. Moir is granted. Costs of the Motion shall be for the panel hearing the appeal.

Counsel: Jean McKenna, for the appellants Jason Gavras, for the respondent Decision : [ 1 ] On Thursday, April 14, 2011 the appellants applied for a partial stay of the January 27, 2011 order of the Honourable Justice Gerald Moir in which His Lordship ordered damages payable to Mr. Vogler by the appellants. I advised the parties that I would grant the partial stay, subject to terms, including quantum, which I would address in a written decision. This is that decision. [ 2 ] In August 2000 Mr. Vogler was 20 years old and had just finished a summer program of religious studies in Colorado.

He was returning home with the appellants when they were all involved in a motor vehicle accident. Mr. Vogler sustained serious injuries, including traumatic brain injury.

[3] Following a five-day trial in March 2010, Justice Moir issued a decision (2010 NSSC 390) and supplementary decisions inwhich he awarded Mr. Vogler a total of $464,245. Included in this amount was the sum of $150,000 for non pecuniary damages and$180,000 for diminished earning capacity. Increased costs were awarded on the basis of a pre-trial settlement offer. [4] The appellants have appealed both the award of $150,000 for non pecuniary damages and the diminished earning capacityaward of $180,000. Mr. Vogler has cross-appealed the $150,000 award.

Depending on the outcome of appeal and owing to a pre-trialoffer, there may also be an impact on the amount of costs awarded at trial. [5] It is common ground that Mr. Vogler has no assets either in Nova Scotia or in California where he currently lives and works. He presently earns approximately $50,000 a year. [6] The appellants seek a partial stay of judgment pursuant to Civil Procedure Rule 90.41. They propose to pay $275,000 to Mr.Vogler forthwith. Mr. Vogler counters that a partial payment of $325,000 should be made with the balance to be held in trust. [7]

Section 41(

e) of the Judicature Act, R.S.N.S. 1989, c. 240 gives the Court authority to grant a stay of proceedings. A stay ofexecution of judgment is a type of stay of proceedings. [8] The filing of a notice of appeal does not effect a stay in Nova Scotia, (Rule 90.41(1)). The Court begins with the assumptionthat a successful litigant is entitled to the fruit of his judgment unless a stay is “required in the interest of justice” (Coughlan et al. v.Westminer Canada Ltd. et al. (1993), (NS CA), 125 N.S.R. (2d) 171 (N.S.C.A.), at p. 174. [9] The parties agree on the law.

The test set out for a stay in Fulton Insurance Agencies Ltd. v. Purdy (1990), (NS CA), 100 N.S.R. (2d) 341 (N.S.C.A.) remains the test under the new Civil Procedure Rules: La Ferme D’Acadie v. ACOA,2009 NSCA 5, at para. 9. It is similar to the test for an interlocutory injunction: Manitoba (A.G.) v. Metropolitan Stores Ltd., (SCC), [1987] 1 S.C.R. 110, at 127. According to the Fulton test, a successful applicant must demonstrate that: 1. (

a) there is an arguable issue raised on appeal; (

b) if the stay is not granted and the appeal is successful, the applicants will have suffered irreparable harm; (

c) the applicant will suffer greater harm if the stay is not granted than any harm the respondent may suffer if the stay is granted(balance of convenience); or 2. there are “exceptional circumstances” that make it “fit and just” that a stay be granted. Arguable Issue: [10] The parties agree that this is not a case of exceptional circumstances and they appear to agree that an arguable issue is raised onappeal. It is not for the court at this stage to make any definite ruling on the merits of the appeal (Coltsfoot Publishing Co. Ltd. v. Earle,2000 NSCA 39, at para. 11).

The Court must be satisfied that there are grounds which, if the appellants are successful, could result inallowing the appeal (Brown v. Brown, [1999] N.S.J. No. 20 (C.A.), at para. 6). [11] In my view, the Notice of Appeal raises arguable issues. By way of example only, para. 160 from the trial judge’s decision

says: [160] Principles. The principles for assessing pecuniary damages are well settled but their application in a case like this is difficult,indeed doubly difficult. The first complication is that Mr. Vogler was young, without any work record and without defined career plans. The second is that he made a substantial recovery and earns a good income. [12] The trial judge himself recognized the challenges of assessing diminished earning capacity. This does not mean that hisdecision would be successfully challenged on appeal. But it shows that there is at least an arguable issue.

Irreparable Harm [13] In RJR – MacDonald Inc. v. Canada (A.G.), (SCC), [1994] 1 S.C.R. 311, the Supreme Court describedirreparable harm (p. 341): “Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetaryterms or which cannot be cured, usually because one party cannot collect damages from the other.

Examples of the former includeinstances where one party will be put out of business by the court’s decision; where one party will suffer permanent market loss orirrevocable damage to its business reputation; or where a permanent loss of natural resources will be the result when a challenged activityis not enjoined. The fact that one party may be impecunious does not automatically determine the application in favour of the other partywho will not ultimately be able to collect damages, although it may be a relevant consideration. [References omitted.] [14] There is no invariable definition of irreparable harm.

It usually takes on a contextual character. But it usually includes theinability to collect money from the unsuccessful party. As Justice Cromwell said in MacPhail et al. v.

Desrosiers et al. (1998), 1998NSCA 5 , 165 N.S.R. (2d) 32, at para. 20: ...Relevant considerations include the extent of the risk of non-repayment in the event that the appeal succeeds, whether the appeal putsthe full amount of the trial judgment at risk or whether it relates only to a portion of the award and whether the respondent has receivedor has been offered a significant payment pending the appeal. [15] Justice Cromwell also cautioned that irreparable harm was not simply a matter of the relative wealth of the parties. He notedthat a successful plaintiff is entitled to its trial award.

The appellant bears the burden of showing irreparable harm on a balance ofprobabilities. The discretionary authority to be exercised by courts considering stay applications requires that these factors be taken intoaccount (MacPhail, para. 21). [16] The appellants argue that the award for diminished earning capacity recognizes a future loss which, according to the trial judge,Mr. Vogler has not yet sustained. The trial judge found that absent the accident, Mr. Vogler would have earned substantially less in histwenties than he actually earned, (decision para. 202).

Thus, the appellants argue that any delay in payment for diminished earningcapacity could not result in harm to Mr. Vogler because that loss is calculated on projected losses that will not occur for another tenyears. On the other hand, the reality is that an award of diminished earning capacity is a present valuation of future loss and denyingpayment of it now is a present loss. [17] It is argued on behalf of Mr. Vogler that there is nothing to suggest that he is financially irresponsible or unable to managemoney.

That may well be but it is clear that unless he preserved his damage award intact, he could not readily repay it if the appellantswere substantially successful on appeal. He does not live in this jurisdiction. He does not have a large income and he does not have anyassets. Where a substantial payment is offered, all the appellants need do at this stage is satisfy the Court that there is a probability ofdifficulty of repayment if the appeal is successful (MacCulloch v. McInnes, Cooper and Robertson, 2000 NSCA 92, at para. 12 andDillon v. Kelly (1995), 1995 NSCA 7 , 145 N.S.R. (2d) 194).

I am satisfied that there is such probability. Balance of Convenience: [18] In this case, the appellants propose that Mr. Vogler receive a substantial portion of the award by Justice Moir. His appeal will

be heard in the fall of this year. The accident in question occurred 11 years ago. I am satisfied that the potential irreparable harm to the appellants easily outweighs any inconvenience to Mr. Vogler by a relatively brief delay in obtaining the balance of the trial judge’s award if he succeeds on appeal. [ 19 ] As is apparent, the basic test to be applied for a partial stay is well established and frequently applied. There is less certainty and guidance with respect to the terms on which a stay may be granted.

Necessarily, these terms are discretionary and need to be tailored to the particular circumstances of the matter before the court. However, when a partial stay is granted, the amount paid or not paid or paid into trust can appear somewhat arbitrary; or at least the rationale for the particular allocation of non payment is usually not articulated. This presents some difficulty in this case where the parties agree that some payment is warranted and some withholding of payment is justified but quantum is an issue.

On the one hand, it would not be appropriate to base the quantum of a partial stay on the Chambers judge’s guesstimate of the prospects of success of the appeal. A Chambers judge is in no position to make any such assessment. On the other hand, the parties themselves, in their notices of appeal and cross-appeal, set certain quantitative parameters for the appeal. There is some authority for taking this into account. In MacPhail , Cromwell J.A. (as he then was) ordered the appellants to make monthly payments of $5,000 to the respondent.

He said in part at para. 22: ...I have in mind the fact that this appeal, which is conceded by the respondent to be arguable, places the whole amount of the trial judge's award at risk. This is not a case in which only some portion of that award is realistically at risk on appeal. [ 20 ] In MacPhail , the total judgment was approximately $800,000 and the successful plaintiff (respondent) was not able to afford appropriate medication and treatment. Justice Cromwell was satisfied that this constituted irreparable harm.

Equally, he was satisfied that if the appeal were successful, the respondent would be unable to repay the appellant. By making the award he did, Justice Cromwell mitigated the irreparable harm to the successful plaintiff (respondent), while protecting the appellants from irreparable harm of not recovering the judgment, if they succeeded on appeal. [ 21 ] In White v. Slawter , (unreported July 28, 1995, C.A. No. 118453) the plaintiff had been awarded almost $900,000 as a result of a motor vehicle accident. Approximately $600,000 of that amount related to loss of future earnings and cost of future care.

In granting a partial stay and requiring the appellant to pay $150,000 immediately, Flinn J.A. said this: Since the major portion of the respondent’s damage award relate to loss of future care[sic], if the respondent received $150,000, now, and interest on the balance pending disposition of the appeal, my concerns with respect to the competing equities here would be alleviated. [ 22 ] In effect, Justice Flinn ordered immediate payment of half the uncontested judgment. [ 23 ] In this case, both parties have put the general damage award of $150,000 at issue.

However, there is no question that an award for general damages will be made, so it is not an “all or nothing” proposition. Again, the award for diminished earning capacity or future income loss is not an “all or nothing” proposition. The appellants do not ask for elimination of this award in the order requested on appeal, but rather “lesser awards” for both categories of damage. [ 24 ] Although awards for non pecuniary damages and pecuniary damages are unlikely to be eliminated altogether on appeal, their total – $325,000 – represents approximately 70 percent of the total award.

The $45,000 award of costs (excluding disbursements) could also be affected by the appeal. There is no evidence of irreparable harm or even significant inconvenience to Mr. Vogler by a short delay of payment of the entire award to him. The delay at this stage would only be a matter of six months. I consider it wiser to err on the side of caution. Accordingly, a partial stay will be granted on the following terms: 1. The appellants shall pay Mr. Vogler $275,000 forthwith; 2. The balance of the amount due to Mr.

Vogler shall be paid to the respondent’s counsel in trust, to be kept in a separate, interest- bearing account; 3. In the event that Mr. Vogler is successful on appeal in an amount greater than $275,000, he shall receive interest on the balance of

the excess at the same rate of prejudgment interest ordered by the trial judge – ie. 5 percent. [ 25 ] Costs of this motion shall be for the panel hearing the appeal. Bryson, J.A.