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TYPES OF DAMAGES - For personal injuries - Investment management fees

Tuesday, June 04, 2019 @ 8:46 AM  

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Appeal by the defendants from a trial judgment awarding investment management fees and tax gross-up awards. Three days after his birth, the plaintiff suffered a brain injury secondary to a hypoglycemic episode that resulted in his need for lifelong care. The parties resolved most of the issues in his consequent medical malpractice action by way of settlement for $5,850,000. The settlement included $4 million for cost of future care and $1.2 million for future income loss. The trial judge concluded Level 4 investment management assistance was reasonable throughout the entire period of the plaintiff’s life expectancy, which was 62-years-old, and accepted the method of the plaintiff’s expert used to calculate gross-up awards. He awarded $1,738,400 for management fees and $190,600 for tax gross-up.

HELD: Appeal allowed in part. The award of Level 4 investment management assistance was based on a misunderstanding of the expert evidence, findings unsupported by evidence and erroneous conclusions. There was no evidence any trustee required active investment management to achieve a rate of return equal to the statutory discount rate. The award for investment management fees was reduced to $50,000, representing Level 2 investment management services. The trial judge made no error in accepting the expert’s method of calculation of gross-up awards, which was well supported on the evidence. Concurring reasons were provided.

Pestano (Litigation guardian of) v. Wong, [2019] B.C.J. No. 718, British Columbia Court of Appeal, M.E. Saunders, L.A. Fenlon and G. Dickson JJ.A., April 25, 2019. Digest No. TLD-June32019006