Products & Services
Court Testimony from Experts @ BEC
Excerpt from Millott v. Reinhard
Complete text of reasons for judgment available from Quicklaw.
DAMAGES
Facts Relevant to DamagesFuture income scenarios - Defendants' economic expert
Conclusion on James Millott's projected future income
Employment History and Future - Lauretta Millott
Financial Arrangements of the Millott Family Critical Assumptions & Findings
Retirement and Part-Time Employment
Negative Contingencies
Fringe Benefits
Productivity
Analysis of Issues Relevant to the Quantum of Damages
Dependency rate
Sole/Cross/Modified dependency Housekeeping
Dependency rates
Cross dependency
Replacement cost Transportation
"Duncan v. Baddeley (lost years') claim"
---------- Facts Relevant to Damages
Discussion on James Millott's projected future income (iii) Future income scenarios - Defendants' economic expert [189] The Defendants' expert, Brown, presented different statistics, with a completely different interpretation. Her figures attempt to take into account positive and negative factors in the accommodation industry, which includes the hotel industry (transcript p.2213). For example, two important negative factors in that industry are the high rate of turnover in workers and the generally low wage levels (transcript p.2214). In fact, one graph (September 27, 2000 Report, p.12) cites Statistics Canada figures, concluding that overall weekly wages in that sector have actually declined since 1998 (transcript p.2215). On the positive side, the accommodation industry was predicted to have high employment growth through 2001 (transcript p.2214). [190] Brown testified to using four sources to establish Millott's future projected income: (a) industry overview; (b) labour market statistics; (c) hotel manager occupation overview; and (d) salary survey. She also took his past income into consideration in several ways. First, between 1990 and 1994 (the year of his injury), his earnings were roughly between $29,000 and $41,000, with a plateau just before the injury at $40,000 to $41,000. This indicated to her that Millott did not have a pattern of steadily increasing wage growth. Second, she testified that his lengthy employment at Linkfast indicated Millott was steady, reliable and committed. However, she also noted that the warehouse industry is dominated by lower-educated employees and, consequently, by lower-paying positions (transcript pp.2227-28). In cross-examination, she noted that she relied heavily on average statistics because Millott was in "transition" - that is, she had insufficient information on his performance in his new career to determine if he would have been above or below the Census average (transcript pp.2294, 2295, and 2297-98). And what information she did have was not all favourable, such as the statistic that he was actually earning approximately $2,000 less than his former S.A.I.T. classmates (transcript pp.2296-97). She admitted that she did not have certain information, such as Millott's career investigative report, which indicated his stated level of desire and motivation (transcript p.2300-01). [191] Brown began with Millott's wage at the time of his death, which she had as $22,921. (The Plaintiffs contend this was a slightly higher figure, but I find the difference negligible in the circumstances.) This was, of course, supplemented by the WCB to approximately $33,000 per year, but I find it logical that the actual wage earned at the time of death must be used for the future wage predictions, not the supplemented total. She increased his predicted wage over time to account for three factors (transcript pp.2231-34). First, the usual wage inflation which benefits all workers. Second, the productivity factor (discussed later), which is non-inflation growth linked to a particular industry. Third, the growth specific to Millott in this industry and in this job, which is a combination, in her opinion, of merit increases and promotions (transcript p.2232). Here, she assumed he would become a "department manager" in five years at a salary of $30,000, which would be an increase of 5.53 per cent per year (transcript p.2232). Following that (after age 48), she assumed his income would grow approximately 2.6 per cent a year for ten years, to a salary of $38,735. She criticized Berendt for relying almost exclusively, in her view, on his conversation with Jaques from the Palliser Hotel in Calgary. She also noted that he had outdated Alberta wage information (from 1993), not the more recent 1996/97 and 1999 sources (transcript p.2234). Because of these differences and the different conclusions drawn by [the plaintiff's expert], his numbers showed an approximately 11 per cent increase per year over at least five years, then annual increases of roughly eight or 12 per cent, depending on the scenario (eight per cent for an ultimate $60,000 per year income scenario, and 12 per cent for an ultimate $100,000 per year income scenario). Brown criticized these numbers as too aggressive (Brown's transcript p.2239). [192] Brown also commented in cross-examination that she has never seen somebody jump $7,000 from one job (night auditor) to another (banquet manager, which Millott apparently wanted to apply for). That is the reason she did not perform calculations based on him getting that promotion (transcript p.2324). While this is a reasonable observation for her to make, I note that [the plaintiff's expert]'s calculations are not based on Millott successfully obtaining the banquet manager position at an immediate increase of approximately $7,000 per year. Rather, Berendt assumed that Millott would reach an approximate salary level of $40,000 within three to five years. [The plaintiff's expert] then assumed the timing would be four years and two months from the date of the accident, which translates into approximately 11.2 per cent per year (or, for example, approximately $26,160 after one year, which is not the equivalent to Millott being in a banquet manager position). Therefore, [the plaintiff's experts] were not making the assumption that Millott would have received an immediate promotion to banquet manager, with an immediate salary increase of $7,000. [193] Brown's numbers are, of course, in current dollars. Therefore, inflation and productivity factors would increase them (transcript pp.2235-36). Finally, she based her final, revised numbers on the WCB supplement. That means that where Millott's employment income would have been less than $33,000 (until 2007 by her calculations), she used $33,000 as the figure because that is what he actually would have been receiving with the supplement (transcript p.2236 and December 4, 2000 letter). [194] In her view, the census data on "Occupational Service Managers" (includes hotel managers and assistant managers) and "Restaurant and Food Service Managers" (includes banquet managers) shows that the maximum salary for hotel managers is $38,735, which is reached only after 15 years of experience (taking the age data in the census as a substitute for experience - an assumption which I find questionable in the circumstances, as Millott was starting at a mature age, with relevant experience from a past career). Moreover, Brown's chart states that the $38,735 is an "average". Obviously, there are salaries much higher (and lower) than that average maximum. And, again, I stress that Millott was not an "average" employee, in light of his education, experience and motivation. [195] Brown had further data, showing average incomes for department managers ($28,000 per year in 1998); and banquet managers ($29,500 per year in 1998). Again, I find that these numbers are more general, not geared specifically to a hotel of the Airport Hotel's size and class. For example, the person who ultimately obtained the banquet manager position was earning approximately $34,000 in 2000. However, I do agree with Brown's conclusion that few workers in the hotel industry will work their way to the top. As mentioned above, there are few positions and little evidence which would allow me to reach the conclusion that Millott would have one day been the manager of a hotel comparable to, or larger than, the Airport Hotel. Brown's report does note that a combination of experience and education is considered the best background for hotel managers. [196] I find two of Brown's charts helpful (September 27, 2000 Report, Appendix C, pp.77-78). One details managerial salaries by hotel size, indicating that a salary in the general range of $60,000 could be reached in several different ways. First, the average general manager's salary for a hotel of 100 to 299 rooms was $60,000 (all these figures are in 1996 dollars). Second, the average salary for an assistant general manager of a 300+ room hotel was $71,500. Third, the average salary for a director of food and beverage was $56,700 for a 300+ room hotel. [197] Also interesting was the chart detailing managerial salaries by hotel class. Again, a salary approaching $60,000 is attainable in several ways. First, the average salary for a general manager of a mid-market hotel was $54,000. Second, an assistant general manager of a first-class hotel had an average salary of $53,900. Third, a director of food and beverage at a first-class or luxury hotel had an average salary of over $52,000. Conclusion on James Millott's projected future income [198] Considering the opinion evidence, which I have described, the Plaintiffs' second income scenario is, on a balance of probabilities, the most convincing, although I reach that by slightly different reasoning than used by the Plaintiffs. I cannot, given the early stage of Millott's career, the number of people at his level in the industry, and the low availability of such advanced positions, find on a balance of probabilities that Millott would have become the general manager of a five star hotel, earning $100,000 per year. Even the Plaintiffs' economic expert, [the plaintiff's expert], stated that he made calculations on that basis at the request of Plaintiffs' counsel, while he based the $40,000 and $60,000 income scenarios on the information provided by the Plaintiffs' vocational expert, Berendt. Employment History and Future - Lauretta Millotta [205] In my view, the evidence presented by the Plaintiffs is insufficient to establish a medical foundation for Lauretta not having returned to work by the date of trial. No medical witnesses or documentation were presented. While I sympathize with the terrible, tragic loss she suffered, I cannot find it reasonable that she will never return to work. Without independent evidence as to the necessity of her remaining away from work, I must conclude it would have been reasonable for Lauretta to return to work one year from the date of Millott's death. Financial Arrangements of the Millott Family [208] Both Millott and Lauretta deposited their income into a joint bank account, from which the bills were paid (mortgage, car payments, groceries, utilities, etc.). Money was then spent on the children's needs, and "whatever [was] left over was for everybody else's use". Lauretta testified that Millott spent very little on himself. Brown (the Defendants' economic expert) prepared "actual expenditure" figures for the Millott family, based primarily on credit card and bank statements. She concluded that Millott actually spent more on himself than the average man in his position would do (September 27, 2000 Report, p.28). However, she cautioned that actual expenditure figures are not reliable, particularly in these circumstances where the family's recent financial situation was unusual (because of the loss of income while Millott retrained and restarted his career), and because the many cash withdrawals in the bank statements could not accurately be accounted for - e.g., transcript p.2245). She performed the calculations for informational and comparative purposes, at the request of Defendants' counsel. [The plaintiff's expert] gave similar cautions against using expenditure calculations (transcript p.1277). [209] I agree with those concerns as to actual expenditure rates. I mention them because they are the only evidence presented as to Millott's spending patterns on himself. Notwithstanding Lauretta's assertion that Millott spent very little on himself, I would, because of Brown's evidence, decline to treat him differently than the average statistical married father of two.---------- Critical Assumptions & Findings
Retirement and Part-Time Employment [213] Both parties and their respective expert witnesses agreed that the statistically applicable retirement age for Millott is 62 years. The Defendants' expert, Brown, testified that the statistically determined age of 62 was appropriate for Millott because it matched Millott's profile, based on his education level, industry, marital status and access to pension. For example, only 13 per cent of people work to age 65, and the 13 per cent is largely a self-employed group. She acknowledged that some of that 13 per cent are in the professional/managerial category, which is where Millott may have ended up had he lived (transcript p.2241). The Plaintiffs' expert, agreed with 62 as the statistically appropriate age, stating that he "normally" uses that age (transcript p.1274). [214] However, the Plaintiffs presented evidence that Millott planned to work full-time until 65 and would have attempted to continue to work part-time after that. This evidence consisted mainly of Lauretta's testimony to that effect. Based on this, and on Plaintiffs' counsel's request, [the plaintiff's expert] based his calculations on a retirement age of 65. [The plaintiff's expert] bolstered this assumption by noting that retirement age could be delayed where, as here, Millott embarked on his new career at a relatively late age (transcript p.1275). In addition, he testified that it is "more expensive" to retire if one is earning more income, so those in a high income bracket (as Millott is predicted to be in some of the scenarios) are more likely to retire later (transcript p.1366). [215] In these circumstances, I am of the view that the appropriate approach is to rely on the statistics compiled by both experts - which indicate 62 as the retirement age. There is insufficient evidence to cause me to vary from the statistical norm. There is also insufficient evidence to ground a prediction as to the likelihood and extent of Millott continuing to work part-time after his retirement from full-time employment. Accordingly, I assume that Millott would have retired fully at age 62. Negative Contingencies [216] The parties' experts agreed on the discounts for unemployment (3 per cent) and disability (2 per cent). I accept those figures. The remaining significant negative contingencies are mortality, divorce and remarriage. The experts agreed on the amount of the discounts for those contingencies, but not their application. [217] While the Plaintiffs spent some effort trying to prove that the Millotts' marriage had virtually no chance of ending in divorce and that Lauretta was unlikely to remarry, such contingencies must, in my view, be considered in the damages claim. While I do find that Millott and Lauretta were happily married, I cannot find there is a zero per cent chance they would have divorced. Statistics for such possibilities as divorce and remarriage are, unfortunately, the fairest and most reasonable way to make the necessary analysis. In addition, a mortality contingency should logically be included. Accordingly, deductions are to be made for divorce, remarriage and mortality. I accept the rates provided by the parties' experts. Fringe Benefits [218] The experts disagreed on the appropriate percentage to add to their income predictions for fringe benefits, which are the non-wage compensation from employment. They can range from employee merchandise discounts to medical benefits and pension plans. [The plaintiff's expert], for the Plaintiffs, initially added four per cent to Millott's base annual income to account for fringe benefits. He later increased this to eight per cent, based largely on the generous company funded pension plan at the CP Hotel chain, which he valued at three to five per cent of Millott's income. He testified that his initial four per cent figure had only about a one per cent component for pension, which is very low. His view is that as four per cent is probably reasonable for an average service person in the hotel industry, four per cent is quite conservative for management. And he felt it was unrealistically low for a $100,000 per year position (transcript p.1260). (I note that I am not concerned with the calculations based on a $100,000 per year salary, as I have found that scenario unlikely on a balance of probabilities.) [219] Brown's fringe benefit amount is 2.8 per cent - based on the "weighted probability of receiving benefits in the service sector" (September 27, 2000 Report, p.29). She testified that she relied on general industry statistics for two reasons. First, she did not know how long Millott would have remained in the CP Hotels chain, which made it inappropriate, in her opinion, to base calculations on its figures (e.g., see transcript p.2331). Second, she did not have access to CP Hotels' figures, so could not have used them as a benchmark in any event. Her report stated that (September 27, 2000 Report, "Fringe Benefits Supplement", p.25):Generally speaking, surveys of non-wage compensation across sectors of the economy and amongst industries confirm that higher-paid jobs are generally associated with higher non-wage benefits, and larger firms offer greater benefits. [footnotes omitted][220] As Brown's background material on fringe benefits concluded that "fringe benefits for full-time, full-year workers will range from approximately 4.0 to 14.0 percent, depending on the existence of a company pension plan" ("Fringe Benefit Supplement", p.26), she has apparently discounted this amount based on the service sector itself, and on the theory that Millott would not have progressed far in the hotel management world. Brown testified that she did not factor in a pension plan at all for Millott, because she did not have the dollar figure for the CP Hotels plan, and because she was unable to say if he would stay with that employer and advance to a position where he would participate in its pension plan. [221] As discussed elsewhere in these Reasons, I find it reasonable that Millott would have advanced to a management position with CP Hotels or another organization, ultimately reaching a position with compensation in the range of $60,000 per year. In that type of position, whether with CP Hotels or elsewhere, he would likely have been entitled to significant fringe benefits, including a pension plan. Accordingly, it is reasonable to assume an average fringe benefit rate of six per cent throughout his projected remaining working life. This takes into account that his fringe benefit rate would be lower than six per cent now, but would have increased significantly over time as his wage compensation increased. Productivity [222] Productivity is the amount by which wages historically grow at a higher rate than inflation. Both parties' experts agree that a productivity rate must be accounted for. The Plaintiffs use 1 per cent, but give no specific reasons. The Defendants use 0.75 per cent, which would result in slightly lower final figures. The Defendants' calculation is specifically based on the accommodation and food sector, and is derived after outlining historical productivity growth in Canada and Alberta, factors linked to productivity growth, and forecasts for future productivity figures. Brown, for the Defendants, testified in cross-examination that it is impossible to determine a productivity figure specific to the CP Hotels chain, because it is difficult, if not impossible, to determine productivity for an individual establishment. In her view, the accommodation and food sector was about as narrow a determination as could be made. She testified that [the plaintiff's expert]'s 1 per cent was based on a prediction for the "entire economy", which is less precise (transcript pp.2335-36). [223] As the Plaintiffs' reasoning is unclear, I prefer the Defendants' reasoning, which is based on related statistical evidence. Therefore, the productivity factor to be used is .75 per cent.
---------- Analysis of Issues Relevant to the Quantum of Damages
Dependency rate [234] The dependency rate is the family's rate of dependency on Millott before his death - that is, the percentage of Millott's income that the family consumed, as opposed to the percentage Millott spent on himself. This is necessary to determine how much the family will need in the future to maintain the same standard of living as it would have had if Millott had not been killed. For example, at the approximately $33,000 annual income Millott was earning at the time of his death (including the WCB supplement), a dependency rate of 70 per cent would mean that $23,100 (70 per cent of $33,000) was consumed by his family, with 30 per cent, or $9,900, consumed by Millott personally. Further, with an income of $23,100, his family could maintain its current standard of living. [235] A dependency rate can be calculated from statistics or from actual expenditure patterns. Both experts agree that the former are preferable, particularly in these circumstances in which the family's income and spending patterns were atypical for a lengthy period of injury and retraining. As mentioned, the Defendants' expert, Brown, did perform some calculations based on actual expenditure patterns. However, the Defendants did not rely on those figures at trial, preferring the statistical approach. [236] The Plaintiffs' expert, used dependency rates of 78, 74 and 70 per cent. He based this on his own textbook (C.J. Bruce, Assessment of Personal Injury Damages, 3rd ed. (Toronto: Butterworths, 1999) at 210). There, he notes that the "standard" dependency rate for a couple is 70 per cent, with 4 per cent added for each child. This reflects the assumption that personal consumption decreases as more family members are added. For example, using this theory in the present case, if Millott and Lauretta had no children, 70 per cent of Millott's income would be considered to be used by the "family" (Millott and Lauretta), while his personal expenditures would be at 30 per cent. With two children, 78 per cent of Millott's income would be considered to be used by the family, with his personal consumption decreasing to 22 per cent. When Steven moves out, leaving Samantha as the only child at home, the family dependency rate would be 74 per cent. [237] There are also numerous cases in Alberta and other jurisdictions that have followed, or at least noted, this rule of thumb. For example, see Schiewe Estate v. Skogan et al. (1996), 185 A.R. 321 (Q.B.) at 328, varied (1998), 228 A.R. 68 (C.A.), app'n for leave to appeal denied [1999] S.C.C.A. No.19, online: (SCCA); and Murray Estate v. Advocate Contracting Ltd., [2001] N.S.J. No. 290 (S.C.) at para.46, online: (NSJ) (although the court in Murray Estate ultimately followed the "modified sole" dependency approach, described below, because of the circumstances there - at para.59). However, as noted in Nielsen v. Kaufmann (1986), 54 O.R. (2d) 188 (C.A.) at 198, the "standard" dependency rate rule of thumb is based on a single income family. This issue is discussed in more detail below. [238] In contrast to the Plaintiffs' submission of 78/74/70, the Defendants' expert, Brown, concluded that 79, 75 and 69 per cent would be more appropriate. In the "Wrongful Death" Supplement to her September 27, 2000 Report in this action, Brown stated (at 4):Thus common practice for economists who quantify damages in wrongful death cases has been to rely on consumption factors calculated from large expenditure studies, such as the consumer diary data published by the Bureau of Labour in the U.S., or Statistics Canada's Family Expenditure Survey (FAMEX).[239] As Brown herself testified, the rates used by the two experts in this area are "very similar". In these circumstances, I prefer to use the "rule of thumb" approach which has been accepted in other cases as well. Therefore, I set the dependency rates for the Dependency Claim at 78 per cent during the period both Steven and Samantha would still be at home with Lauretta (until 2003), 74 per cent after Steven leaves but when Samantha is still at home (until 2007), and 70 per cent from then on, as only Lauretta is assumed to be remaining in the home. Sole/Cross/Modified dependency [240] One of the most contentious issues between the parties was the issue of sole or cross dependency. This refers to the extent, if any, to which a spouse's income should be included in the dependency calculations. The Plaintiffs initially submitted that sole dependency, which would ignore the portion of Lauretta's income that she spent on Millott, was appropriate. This approach has been commonly used in the past, as many families have had only one income earner. The Defendants argued that the cross dependency approach is more appropriate in a two-income family. This would effectively deduct from the damages award the amount that Lauretta used to spend on Millott. The Plaintiffs later suggested that perhaps a "modified" approach could be used instead of the sole dependency approach. The modified approach lowers the sole dependency rate, which would ignore Lauretta's income (as in the sole approach), but lower the portion of Millott's income which the family is assumed to consume. Under the modified approach, the final figure remains higher than it would be under a full cross dependency approach. A modified rate of 60 per cent was used in Hechavarria v. Reale (2000), 51 O.R. (3d) 364 (Ont.S.C.J.); Nielsen, supra; and Murray Estate, supra. [241] Numbers are helpful in clarifying these theories. I refer to the numerical example given by [the plaintiff's expert] in Assessment of Personal Injury Damages at 55-56. For discussion purposes, I assume the following: a family income of $50,000, of which $30,000 was earned by the deceased husband and $20,000 is earned by the surviving wife. Using a dependency rate of 70 per cent, the wife in a sole dependency scenario would receive a damages award based on .70 (dependency rate) x $30,000 (husband's income), which equals $21,000. Under a cross dependency approach, the wife would receive an award based on 70 per cent of the family income net of her own earnings ((.70 x $50,000) - $20,000 = $15,000). This is alternatively calculated as (.70 x $30,000) - (.30 x $20,000) = $15,000. This is equivalent to saying that she would receive 70 per cent of her husband's income, but have 30 per cent of her own income deducted, as it is assumed that is the portion of her income which she was spending on him. On the other hand, using Hechavarria's 60 per cent "modified" dependency rate, the 70 per cent of the husband's income consumed by the family would be reduced to 60 per cent, so the wife in this example would receive .60 x $30,000 = $18,000. [242] The Defendants' expert, Brown, testified that she had two main reasons for preferring cross dependency. First, Millott and Lauretta pooled their incomes, and Millott consumed 20 to 30 per cent of that total family income. In Brown's view, it is, therefore, fair that the rest of the family would still have access to the 70 to 80 per cent they did while Millott was alive. Second, she understood from Brooks, supra, that it is necessary to consider both the financial loss and the financial gain of the survivors (transcript pp.2251-52; also see September 27, 2000 Report, "Wrongful Death" Supplement). [243] [The plaintiff's expert] made a strong "economic theory" argument for the sole dependency approach, arguing that Lauretta has "saved" nothing, but has actually been prevented from spending that portion of her income as she wished to spend it. He testified that, under economic theory, this means she is worse off because she cannot use the money for its first and best use. He used coffee as an example, setting a scenario where he went into a coffee shop with money for a cup of coffee, but the coffee pot broke and all the coffee spilled. A new pot would not be ready for some time, and he did not have time to wait. Therefore, he left the shop still in possession of his money, but having been deprived of the opportunity to spend it on what he wanted to spend it on. Similarly, in the present case, Lauretta wants to spend certain money on Millott, but is unable to. While she still has the use of the money for another purpose, she cannot use it for what she considers to be its optimal use. [244] First, I must determine which approach is correct at law. If more than one approach is correct, I must decide which is appropriate to apply in these circumstances [245] There is little direct discussion in the cases on this point. Rather, there are implied assumptions. Often, a court will neither discuss the rationale in detail nor use the labels. The difference is that some cases apply a dependency rate to family income (cross), while some apply a dependency rate to the deceased's income (sole). Occasionally, a court will find the dependency rate to be a certain number, then apply a lower rate (modified). [246] A most useful discussion of this area is found in K. Cooper-Stephenson and I. Saunders, Personal Injury Damages in Canada, 2nd ed. (Scarborough: Carswell, 1996) at 671-72. The authors there suggest that a second source of family income should be taken into account, but that the courts are still grappling with how to do this. The authors conclude (at 672):
What has to be kept in mind is that cross-dependency is simply a mechanism for resolving a financial claim in light of the financial facts. From an emotional standpoint of course most survivors are substantially worse off.[247] In Labbee v. Peters, [1997] A.J. No. 176 (Q.B.), online: (AJ), aff'd (2000), 261 A.R. 141 (C.A.), McIntyre, J. directly commented on the sole dependency versus cross dependency controversy, but in the context of household services (although he noted at para.64 that the issue is more often seen in the income context). The Defendant there argued against any award for loss of household services because the survivor had done more for the deceased than he did for her; therefore, she had suffered no actual loss. Justice McIntyre noted it was unnecessary for him to reconcile the approaches, as the deceased in Labbee had made very significant "jack-of-all trades" contributions to the household. He also expressed his discomfort with the idea of the court assessing the value of the emotional loss of services provided out of love and affection (at para.66). [248] In Riches v. Miller, [1984] A.J. No. 815 (C.A.), online: (AJ), the Alberta Court of Appeal upheld the trial judge's finding that a "working widow" was entitled to damages based on 50 per cent of her deceased husband's net income (i.e., modified dependency). The court refused to change the award to 50 per cent of the family income less the survivor's income (explicit cross dependency). However, the court clearly stated (at para.25) that the trial judge's finding was made in light of all the evidence, including the evidence as to the survivor's income:
In my view, this definite finding by the trial judge makes it unnecessary to consider whether the amount to be used in computing a working widow's dependency under the Fatal Accidents Act should be the figure resulting from deducting the amount that the deceased would normally spend for his personal use and support from his net income without regard to the income of the widow. This amount has been referred to as 'available as disposable income for dependants'; (per Spence, J., in Keizer v. Hanna, [1978] 2 S.C.R. 342; 19 N.R. 209, at page 343) and has been used to compute a widow's dependency in the absence of any evidence that she had in fact used or intended to use all of it for her personal use. Availability and not use, it is argued, is the test. Keizer v. Hanna, supra; Farmers National Bank et al. v. Colles & Whebby Ltd. (1981), 33 N.B.R. (2d) 248; 80 A.P.R. 248.[249] In Rose v. Belanger (1985), 17 D.L.R. (4th) 212 (Man.C.A.), the Court of Appeal upheld the trial judge's cross dependency calculation (based on family income, not only on the deceased's income). The court stressed that each case depends on its own facts, but that it is certain "that the income of the surviving spouse must be taken into account" (at 222). I also note that in Braun Estate v. Vaughan, [2000] 3 W.W.R. 465 (Man.C.A.), the Court of Appeal declined to disturb the trial judge's use of sole dependency (failing to take into account a portion of the surviving husband's income), as there was a negligible difference between the two methods in the circumstances (at 488). [250] The courts in Nielsen, supra and Murray Estate, supra both followed a "modified" dependency approach. As stated by the Ontario Court of Appeal in Nielsen at 198-99:
The fact that there are two 'breadwinners' in the family skews the applicability of the 'conventional' principle and figures somewhat [the 70 per cent rule of thumb]. Those figures are based on a male breadwinner as the sole support of the family. The trial judge does not appear to have considered how the 'conventional' figures might be affected when there is a two-wage-earner family. It must be assumed that in such families some portion of the husband's income goes to the wife or vice versa. That portion remains with the survivor. The appellant's expert, Dr. Segal, was of the view that in a two-wage-earner family the deceased would consume 30% of the total family income of husband and wife. The deceased would be partially dependent on the income that the surviving spouse is receiving and, therefore, there is an offset of that amount which the surviving spouse is no longer paying and for which 'credit' should be given. Counsel for the appellant submits that in such families the appropriate dependency percentage should be 50% rather than 70%. [original emphasis][251] The court went on to conclude that the deceased was thrifty and willing to sacrifice her own interests to those of her husband and children (as was also found in Hechavarria some years later). The court recognized the need for offsetting the amount which the surviving spouse would no longer pay to support the deceased against the loss of the deceased's income (using the conventional 70 per cent of the deceased's income). The modified approach reflected both the fact that the deceased used his or her income almost exclusively for the family's benefit, and the reality that there must be some savings of the survivor's income due to losing a member of the family unit. [252] In Nielsen, therefore, the court used rates of 60 per cent for the surviving husband, with 4 per cent for each child. This reasoning and the 60 per cent conclusion were followed in Robb v. Canadian Red Cross Society, [2000] O.J. No. 2396 (S.C.J.), online: (OJ) at para.215, where the issue of cross dependency instead of modified sole dependency was not explicitly addressed. [253] Returning to the parties' submissions, I conclude that [the plaintiff's expert]'s argument in favour of sole dependency is illogical in circumstances in which both spouses have incomes. In addition, his underlying assumption is still that the survivor loved the deceased and wanted to spend money on the deceased; therefore, the fact of that spending should be overlooked in assessing damages. However, the court cannot, in my view, fall into the trap of deciding which marriages were "for love", thus qualifying for sole dependency, and which were "for money", thus qualifying for cross dependency. It would be inappropriate to make the court a forum for parties to call evidence as to the type of marriage a given case involved, or for the court to base an award on the presence or absence of love and affection. As difficult as it may be, the Court must attempt to recognize actual net economic loss. [254] [The plaintiff's expert], in Assessment of Personal Injury Damages, supra, at 58, also outlines the inherent absurdity in the cross dependency approach when the survivor's income is higher than the deceased's income. For example, if Lauretta had been earning $60,000 per year and Millott $20,000, then a cross dependency approach (assuming just the two of them and a 70 per cent dependency rate), would mean Lauretta had lost a $14,000 contribution from Millott (.70 x $20,000), but "gained" $18,000 she would no longer have to spend on him (.30 x $60,000). She would, therefore, not be entitled to damages for the loss of his income, because in theory there would have been no loss. While this is certainly a consequence of using cross dependency (and would arguably be a reason for rejecting cross dependency in some circumstances), this rationale is irrelevant in the present case as it does not accord with the income patterns here. [255] Therefore, I would reserve sole dependency for cases where the sole income-earner is deceased. In my view, sole dependency is inappropriate for a dual income household. Some adjustment must be made for the survivor's income, because the loss incurred by the survivor must take into account the value of the financial gain to the survivor from no longer spending a portion of the survivor's income on the deceased. [256] The proper method of adjustment (cross or modified) depends on the circumstances. Generally, the modified approach is applicable where there is evidence that the survivor's income is much greater than the deceased's (which would lead to an absurd result using cross dependency), or where there is evidence that the deceased was extraordinarily frugal or self-sacrificing (as in Hechavarria). [257] In the present case, the cross dependency approach is appropriate. The two wage earners in the Millott family pooled their income into a joint account from which they paid the bills (e.g., mortgage, car, groceries and utilities). Whatever was left over was for everybody's use. Accordingly, some of Millott's salary would be used for Lauretta's personal expenses; some of Lauretta's would be used for Millott. There was no evidence indicating that Lauretta was extraordinarily frugal or self-sacrificing (apart from the obvious thriftiness required in the Millott family's recent financial circumstances and apart from a mother's normal sacrifices for her family). The evidence is also clear that Millott was earning (including the WCB supplement) and would have continued to earn significantly more than Lauretta. Therefore, the other rationale for applying the modified approach is also inapplicable (where the survivor's income is higher). [258] The Plaintiffs presented two further arguments to counter the effect of the cross dependency approach. First, they submitted that a precondition to using the cross dependency approach is that the survivor must be working. However, Lauretta testified that she has not worked since Millott's death, despite attempts to return, and is still under a doctor's care. Second, the Plaintiffs argue that there is no evidence as to how much of Lauretta's income, if any, was actually spent on her husband. [259] Regarding the first argument, I recognize the trauma suffered by Lauretta in all the events surrounding Millott's death. In my view, however, the Plaintiffs did not prove on a balance of probabilities that Lauretta will never work again. Nor am I satisfied on a balance of probabilities that her absence from work to this date has been proven to have been medically justified. There was limited evidence as to the exact reasons for not working, the medical support for such reasons, and the estimated time of her return to work. Perhaps this was because Lauretta made no claim against the Defendants for loss of past or future income on her own behalf. [260] The Defendants submit that the Plaintiffs' position is inconsistent, as they claim that Lauretta cannot work because of the accident, but are grounding the damages claim in a "but for" scenario - that is, but for the accident, Millott would still be alive, earning an income and contributing household services to his family. To be consistent, the Defendants argue that Lauretta also must be subject to a "but for" scenario - that is, that she would also still be earning an income. I agree, to a degree, which accounts for the one year limit from the accident that I have put on Lauretta's absence from work. Therefore, sole dependency will be used to calculate income dependency from the date of the accident for a period of one year. Cross dependency will be used from that point, on the assumption that Lauretta would, notwithstanding the accident, have worked full-time at her previous salary (subject to productivity and inflationary increases). [261] Regarding the lack of evidence on the amount, if any, that Lauretta spent on Millott, the Plaintiffs claim that without those figures it is impossible to determine what an appropriate cross dependency rate would be. In my view, the Plaintiffs are attempting to have it both ways with this submission. One of their strong arguments against a portion of the Defendants' calculations was that the Defendants used actual expenditures to set out a series of dependency rates. But the Defendants did not attempt to rely on those dependency rates at trial, stating that they were for informational and comparative purposes only. Taking that factor into account, it is unreasonable, in my view, to oppose the use of actual expenditure rates for Millott's expenditures on one hand, but argue on the other hand that the lack of actual expenditure rates should be used as a reason not to apply any cross dependency rates to Lauretta's income. I conclude that it would be reasonable to use the statistical averages for the cross dependency rate, as for the sole dependency rate. Unlike Hechavarria, there was no convincing evidence to counter the statistical norm (as noted, the deceased in Hechavarria spent virtually all of her income on her family). It is, therefore, reasonable to use 22 per cent as the cross dependency rate (raised to 26 per cent after Steven leaves the home and 30 per cent after Samantha also leaves), and I direct that this should be done. Housekeeping [264] The calculation or estimation of housekeeping damages requires the Court to ascertain the value of the housekeeping services Millott used to perform. This is done by quantifying the number of hours spent annually by the deceased on housekeeping matters, and then assigning a dollar value to those activities. The resulting annual figures are then converted to a lump sum, present value figure, using the same rationale and methodology as discussed earlier in relation to income. The Plaintiffs presented Karen Kirker as an expert in evaluating the loss of household services. Her report was entered as evidence, and she testified at trial. [265] Before addressing the Millott family's particular factual situation, I must first address some preliminary legal issues surrounding the assessment of housekeeping damages. Dependency rates [266] The expert's disagree on the dependency rate to apply to household services. This rate determines what percentage of the household services performed by Millott needs to be replaced for the family to maintain its former standard of living (i.e., the approach is equivalent to that discussed earlier for income dependency rates). Brown, for the Defendants, assumed a large deduction, while [the plaintiff's expert], for the Plaintiffs, initially made no deduction, later acknowledging that a slight deduction might be appropriate. [267] Brown assumed that Millott's household services benefited all family members equally. For example, in a four member household, 25 per cent of the benefit of Millott's household services would have been allocated to him, so that, after his death, only the 75 per cent allocated to the rest of the family needed to be replaced (at a split of one-third each among the three remaining family members). In the future, after Steven leaves home, one-third of the benefit of Millott's household services will be allocated to him, so that only two-thirds will need to be replaced (half benefiting Lauretta and half benefiting Samantha). Finally, by the time only Lauretta is left at home, 50 per cent of Millott's household services should be deducted, on the assumption that Millott would have had half the benefit had he lived. [268] On the other hand, [the plaintiff's expert] made no deduction for dependency in his initial report (Exhibit 45, p.9). That is, he implicitly assumed that all of Millott's household services would need to be replaced. This is qualified in his October 31, 2000 rebuttal report (at p.11), where he stated:
The services to which Ms. Brown applies a reduction include (as described on pages 6 and 7 of Ms. Kirker's report): regular cleaning, seasonal cleaning, outdoor maintenance, and maintenance and repair. Based on our reading of Ms. Kirker's report, we expect that very few of these chores would be dependent on the number of people living in the Millott household. In particular, for Ms. Kirker's 'outdoor maintenance' and 'maintenance and repair' categories, it seems unlikely that any of the work required for these tasks has been reduced due to Mr. Millott's death. Similarly for 'seasonal cleaning' - it seems unlikely that the carpets need to be shampooed less and housed [sic] exterior washed less, simply because Mr. Millott has died. For the 'regular cleaning' activities, it may be that a slight adjustment might be appropriate since, due to Mr. Millott's death, cleaning up after meals should take slightly less time, the house will take slightly longer to get dirty and need cleaning, and so forth. However, Ms. Brown's assumption that only 75 percent of these tasks needs to be replaced (declining to 50 percent once both children are independent) seems extreme. Presumably the Court will seek evidence from a household services expert in resolving this matter. Without further evidence from a household services expert, we believe that our calculations more closely estimate the true household loss than Ms. Brown's. [original emphasis][269] Further, in Assessment of Personal Injury Damages at 59, [the plaintiff's expert] states:
It is generally assumed that the survivors will require between 80 and 100 per cent of the value of the deceased's household services. The reason for this is that the consumption of most household services by one member of the family do [sic] not diminish the consumption by other members. All members benefit equally from each such service. Thus, when one member of the family is removed, the amount of services required by the remaining members is not diminished. For example, the amount of benefit which any member of the family derives from having the lawn mowed or the living room painted is not affected by the number of other family members living in the house. When one family member is removed from the household, therefore, the number of household services which are required in order to maintain the standard of living of the remaining family members is not reduced. If the deceased had mowed the lawn once a week, the survivors' standard of living will only be maintained if the lawn continues to be mowed once a week.[270] I agree with Brown that some deduction must be made to account for those household services provided by Millott which were for his sole benefit. For example, his time to clean up his own dishes after meals does not need to be replaced and should not be compensated for. However, I cannot accept Brown's contention that 25 per cent of the household services should be deducted off the top as benefiting only Millott (and later one-third and one-half). I prefer the logic in [the plaintiff's expert]'s reasoning that there is only a slight decrease in the amount of household work that must still be done, despite the absence of one person. [271] As [the plaintiff's expert] noted, Kirker divided her report into regular cleaning, seasonal cleaning, outdoor maintenance, and maintenance and repair. Given the nature of household services provided by Millott, I estimate that ten per cent of these activities were for Millott's sole benefit, and need not be replaced. For example, his absence from the house will result in fewer dishes to wash, slightly less dirt accumulating in the house, and less wear and tear on appliances decreasing the maintenance and repair requirements. (Other activities, such as laundry, are specifically not considered, as Millott did not perform a significant amount of such tasks.) However, the work Millott did outside the house was all for the family's benefit as a whole, such as his portion of the lawn mowing and snow shovelling, other yard work, and outside cleaning. [272] Therefore, once the annual value of Millott's household services is determined below, ten per cent must be deducted as representing the amount of his services that do not need to be replaced. I have reached this figure because virtually everything Millott did was for the family as a whole. For example, he did not have a hobby car that he spent time working on. In my view, it is inappropriate to make a significant deduction here. Cross dependency [273] A related issue is cross dependency. As with the issue of income, the Plaintiffs' expert, contended that it is inappropriate to use the cross dependency methodology when calculating housekeeping damages. The Defendants' expert, Brown, would apply cross dependency. That is, the Plaintiffs would only look at how much Millott used to do that now must be replaced, while the Defendants would subtract a portion for the time that no longer needs to be spent on looking after Millott's needs. [274] [The plaintiff's expert] testified that Kirker's report had already factored in cross dependency by looking at the additional hours Lauretta would be required to perform housekeeping tasks, rather than looking at the hours Millott is no longer performing those tasks. As an example, he stated (p.1362, lines 5-18):
...say, she was before spending 20 hours a week doing housework, of which we decide 3 were specific to her husband. I mean, usually most housework is actually not specific to individuals, so it's not the same 70/30 split [as for income dependency]. So let's say 3 of those hours were specific to her husband. So now there's 17 hours that she's spending, but because her husband is not there and doing some of his share, she's now spending 27 hours on housework. So if she was spending 20, without him there, she would only need 17, but because of the time he was spending, she's now spending 27. Miss Kirker is saying let's go from 20 - it's the 20 to 27, which is really the 17 to 27 is what she's compensating for.[275] To clarify this example, [the plaintiff's expert] was assuming that Lauretta was doing 20 hours of housework weekly before Millott's death (three hours of which were specific to Millott and no longer needed), while Millott was doing 10 hours of housework. Because Lauretta no longer has to spend the three hours on Millott, her load would decrease to 17 hours. However, Lauretta also has to replace the 10 hours' worth of tasks that Millott can no longer perform, which brings her total housework to 27 hours. According to [the plaintiff's expert], therefore, Kirker had already incorporated this cross dependency reasoning into her report. [276] The Defendants argued that Kirker's report does not perform such incremental calculations for the other areas of housekeeping services. [277] Brown balanced off the lower amount of work Lauretta needs to do because Millott is not there with the loss of economies of scale she suffers by having to do the work by herself (September, 27, 2000 Report, p.53):
[W]e assume that Mr. and Mrs. Millott experienced economies of scale when they used to do housework (i.e., when two people live together and share household duties, their combined hours of housework is [sic] less than the sum of the number of hours two individuals would spend doing housework if they lived separately). For example, although Mrs. Millott will still need to do regular cleaning, it will take her more than half the time it used to take her and her husband to do the same chores combined. This implies that more than 75 percent (67% once Steven leaves home and 50% once Samantha leaves home) of Mr. Millott's housekeeping capacity would need to be replaced, since Mrs. Millott will no longer benefit from these economies of scale. On the other hand, we assume that as a result of the accident, Mrs. Millott will now have to do less housework due to Mr. Millott's absence. This implies that Mrs. Millott's housework load has decreased. [original emphasis][278] In my view, this is logical, and I accept Brown's contention that the economies of scale offset the fact that Lauretta is "saving" time on housework because Millott is no longer alive. Therefore, there is no significant cross dependency issue in these circumstances. Of course, as mentioned, I have found that the amount of Millott's housekeeping services that need to be replaced is 90 per cent (a deduction of 10 per cent), not the 75, 67 and 50 per cent figures used by Brown in the above excerpt. Replacement cost [284] I conclude that it is appropriate to use the best estimate available in the circumstances, as long as it has been adequately proven. In this case, the Defendants' counsel did not cross-examine Kirker on her assumptions and sources underlying the replacement cost figures. Accordingly, I am faced with Kirker's estimates on one hand and the Defendants' numbers (contained in a summary of precedents generated by Brown) on the other hand. [285] Regarding which of those figures are the best estimates in these circumstances, I turn to the Defendants' second argument on replacement cost. They submit that Kirker's specific hourly estimate of $26.50 was too high for the maintenance and repair work that would have been performed by Millott. The Defendants argue, based on Brown's summary of precedents, that Alberta courts typically use an average hourly wage of $11.00 to $13.00 for such activities. Kirker testified that the $26.50 figure was "the average hourly rate in the Calgary area for the handyman service". [286] The basis for the Defendants' challenge is what other courts have awarded under different circumstances. For example, in Taguchi v. Stuparyk (1994), 16 Alta.L.R. (3d) 72 (Q.B.), varied (1995), 29 Alta.L.R. (3d) 175 (C.A.), application for leave to appeal dismissed [1995] S.C.C.A. No.258, online: (SCCA), Matheson, J. accepted a rate of $8.50 before trial and $12 after trial. I note that this was for house cleaning and cooking, rather than such things as electrical and plumbing work, and appliance repair. In that decision, Matheson, J. makes some persuasive comments (at 85 and 86):
We assume that the above noted factors have an offsetting effect on the 75% benefit we initially discussed (67% once Steven leaves home and 50% once Samantha leaves home). Therefore, we maintain these dependency rates when calculating the family's loss of housekeeping capacity.
Surely the rate of valuation must depend in each case upon the evidence adduced in that case. I have not been referred by either side to any 'conventional' rate. ...[287] The court there chose $12 as a middle ground between the plaintiffs' commercial rates and the defendant's $7 per hour. Although the majority of the Court of Appeal varied the trial decision, making the post-trial award equal to the pre-trial award, I still find Matheson, J.'s comments on the use of commercial rates helpful. [288] In the circumstances here, I am not satisfied with Kirker's evidence in this area. Her evidence consists of a bald statement regarding handyman costs. While Millott undoubtedly had skills and experience in a number of "handyman" areas, and his family has suffered a financial loss by being deprived of those skills, $26.50 per hour is not supported. On the other hand, the Defendants' $11 to $13 per hour is clearly based on general housekeeping, not on the specific skills possessed by Millott. [289] I find $18 per hour to be an appropriate rate for maintenance and repair in the handyman area. I also note that I find Kirker's other rates ($14.25 per hour for regular and seasonal cleaning, and $110 per month for outdoor maintenance) reasonable in the circumstances, and the best estimates available. Transportation [322] Millott did all the necessary driving for members of the Millott family, as he was the only licensed driver. He took them to work, shopping, out on weekends, etc. While he would always drive his wife to work, there were occasions, particularly after he began working at the Airport Hotel, when he could not pick her up. One reason for his consistency in driving her to work is that her work as a baker sometimes required her to start very early in the morning, when public transit was sparse or not running. When Millott could not pick Lauretta up from work, she would take the city bus home. Millott would occasionally take the children to school, but they used the bus for the most part. Steven now has a driver's licence and does drive his mother when their schedules permit. Lauretta does not have a driver's licence and testified that she will never get one, particularly in light of the way Millott died. I am prepared to accept that statement for purposes of this discussion. [323] Only Lauretta and Samantha are making a claim for transportation damages, the entirety of which is based on taxi fare. The Defendants argue that basing the transportation claim on reasonable taxi fare is "overly generous", and that Lauretta, in particular, has a duty to mitigate. The Defendants propose a 25 to 30 per cent negative contingency deduction for the chance that Millott would not have been able to provide such extensive transportation services to his family if he were successful in pursuing a management career at the Airport Hotel. [324] In light of the Defendants' persuasive argument that Millott's increasing work demands would have limited his ability to drive Lauretta or Samantha as much as before, I find that Lauretta would have had to rely increasingly on public transit in any event. Therefore, it is inappropriate to award her, and Samantha, full replacement transportation costs by taxi. However, some taxi component in the award is appropriate, as Millott would certainly have continued to do a great deal of driving for the family. In addition, if Lauretta returns to work as a baker, as I have assumed she will, she may sometimes be required to be at work very early in the morning. Had Millott been alive, I am confident the family would have made alternative arrangements to get Lauretta to work without resorting to public transit, even if it were available. Also, it is reasonable to conclude that Lauretta would not have continued to work until age 74, which is the approximate age she would have been at the end of Millott's life expectancy at 79 years old. Therefore, she is not entitled to compensation for transportation to work until the end of Millott's life expectancy. Apart from work, there will other times where it is difficult for Lauretta or Samantha to use public transit (e.g., after making large grocery purchases). I also conclude that, as Samantha grows older, she would have naturally increased her use of public transit and relied less on her father. [325] Accordingly, I award Samantha 50 per cent of the taxi costs assessed by Karen Kirker, as I find that only some of her transportation would have still been provided for by her father. I award Lauretta 65 per cent of the taxi costs assessed by Karen Kirker, as Lauretta would have increasingly relied on public transit, but would still have relied on her husband to a great extent. In using those percentages, I am factoring in an amount for public transit. That is, there were no numbers given for public transit costs, so the 50 and 65 per cent figures take into account an appropriate combination of taxis and public transit. The approximations also include a built-in amount for pre-judgment interest. [326] Both experts based their calculations on Kirker's report, but derived slightly different results. Both assumed Lauretta would receive transportation damages until Millott would have been 80 years old; Samantha's would end at age 18, when her father would have been 50. As noted elsewhere, Millott's life expectancy is 79, so the calculations are inaccurate for that reason. However, assessing damages is not a precise science, and I am comfortable with including the extra year's deduction as part of the global deduction taken here. [327] For the reasons stated earlier, I prefer the calculations that incorporate mortality and disability contingencies (and divorce and remarriage contingencies for Lauretta). I am using Brown's calculations as the base amount, because she explicitly broke down the transportation calculations, and because she used the 3.85 per cent discount rate. Brown calculated Lauretta's transportation damages as $122,500, inclusive of pre-trial loss, post-trial loss, and pre-judgment interest calculated as of November 13, 2000. Brown calculated Samantha's transportation damages as $14,000, again inclusive of pre-trial loss, post-trial loss, and pre-judgment interest calculated as of November 13, 2000. "Duncan v. Baddeley (lost years') claim" [331] Under current Alberta law, a deceased's estate has a claim for a "lost years' award", which is the future income Millott would have earned had his life not been cut short (Duncan Estate v. Baddeley (2000), 266 A.R. 323 (C.A.) (Duncan No.2) at 325). This is based on the earlier decision Duncan Estate v. Baddeley (1997), 196 A.R. 161 (C.A.), leave to appeal refused [1997] S.C.C.A. No. 315, online: (SCCA) (Duncan No.1). While there is academic and political debate about the justification for such claims, I am bound to follow the law. Accordingly, I must assess the amount of the Estate Claim in light of the legal principles which now apply in Alberta. I must also address any overlap between the Estate Claim and the Dependency Claim to prevent double recovery. [332] In Duncan No.2, Fruman, J.A., for the court, explained the proper method of calculation of a lost years' claim. The companion case of Brooks v. Stefura (2000), 266 A.R. 239 (C.A.) elaborates on the relationship between estate claims and dependency claims, as discussed later in these Reasons. [335] There are several steps involved in assessing an estate claim (Duncan No.2 (C.A.) at 326-29). First, the court must determine the future earnings the deceased would have earned. Second, the expenses the deceased would have incurred to earn that income must be deducted. Third, personal living expenses are calculated using the "available surplus" approach, and are then deducted (Duncan No.2 (C.A.) at 327). This is the most difficult calculation, but again the Court of Appeal has set out some guidelines by adopting three basic principles from Harris v. Empress Motors Ltd., [1983] 3 All E.R. 561 (C.A.) at 575. These principles, and additional factors drawn from the cases by our Court of Appeal, are summarized in Brooks (C.A.), supra, at 246:
[T]he aim of damages is to compensate the plaintiff as closely as possible for the actual loss suffered. While commercial rates are clearly not determinative of the issue, they are important and relevant in any attempts to value the lost services in that they represent really the only means available to the plaintiffs to attempt to replace in some fashion the lost services.
- the ingredients that make up the living expenses are the same regardless of the personal characteristics of the deceased;
- the sum to be deducted as living expenses is the amount spent by the deceased to maintain himself at the standard of living appropriate to his income level;
- living expenses should not include projected expenditures based on personal character traits, lifestyle decisions or spending habits, unless the expenses would have been necessary to maintain the deceased person in order to earn the anticipated income;
- sums expended to maintain or benefit others do not form part of the deceased's personal living expenses;
- personal living expenses include the deceased's personal living expenses plus his pro-rated share of joint family expenses; and
- joint family expenses are limited to such things as rent or mortgage payments, utilities and the cost of operating a car.
In practice, family size normally varies over the life cycle, and given that deductions for personal living expenses are based on personal consumption rates (which vary by family size) and the deceased's proportionate share of fixed and variable family expenditures (which would affect the deceased's proportionate share), the deduction for personal living expenses in a single case may be fluid over the course of the deceased's projected life cycle.[339] In my view, the Plaintiffs' contention for a flat rate is unacceptable. That rate was accepted by Sulyma, J. at the Queen's Bench level in Duncan No.2 (1999), 231 A.R. 330 at 341, because it was the only rate presented to her that was calculated on the appropriate basis. I share Hutchinson, J.'s concerns with the flat rate, namely that it does not have a breakdown of expenses, nor does it reflect changing family circumstances at different points in the deceased's projected future life (Rewcastle, supra, at para.170). In that case, Hutchinson, J. settled on a single weighted average deduction rate (para.172). In doing so, I note that he was accepting and expanding upon the approach taken by one of the experts in that case. In the present case, I do not have sufficient information to calculate a weighted average deduction rate. [340] I also agree with Hutchinson, J. that the deceased's presumed family status is important (Rewcastle at para.170). Here, Millott's personal living expenses would have varied depending on how many of his children were in the home at the time. Accordingly, the best guide I have is the life cycle approach set out by Brown for the Defendants. I find myself in the position of Sulyma, J., where there is only one appropriately-based calculation before me. I agree with the life cycle approach. It is logical that the personal expenditure rate will vary depending on the number of persons that are assumed to be living in the household at any given time. I accept Brown's numbers as fairly representing that approach in these circumstances. [341] Therefore, the appropriate personal living expense rates are 35 per cent (with both Steven and Samantha at home); 44 per cent (with only Samantha at home); and 50 per cent (with no children remaining in the home).