Docket: CA 170713
NOVA SCOTIA COURT OF APPEAL
[Cite as: Eager v. Blackburn, 2002 NSCA 41]
Glube, C.J.N.S.; Flinn and Cromwell, JJ.A.
BETWEEN:
JOHN EAGER and WILLIAM KERVIN
Appellant
- and -
LINDA BLACKBURN
Respondent
REASONS FOR JUDGMENT
Counsel: James L. Chipman and J. Scott Barnett for the appellants
M. Shaun O’Leary and Kenneth A. MacLean for the respondent
Appeal Heard: October 9, 2001
Judgment Delivered: March 28, 2002
THE COURT: Appeal dismissed per reasons for judgment of the Court
BY THE COURT:
I. INTRODUCTION:
[1] The respondent was injured in an automobile accident on September 4, 1997. On February 17, 1999 she commenced an action for damages against the appellants. The main defence of the appellants was that the respondent had settled her claim for damages with the appellant Eager’s motor vehicle liability insurer and that in consideration of the payment of $7,000.00, the respondent had signed a full and final release of her claim.
[2] The parties agreed to have the issue of the validity of the release resolved prior to any further proceedings. Following a trial of this issue, Gruchy, J. of the Supreme Court of Nova Scotia set aside the release as an unconscionable transaction.
[3] The appellants appeal that decision.
II. FACTS:
[4] The automobile accident which gives rise to these proceedings occurred on September 4, 1997. The respondent was operating her brother-in-law’s motor vehicle on Robie Street in Halifax, Nova Scotia. She was stopped at a red light. A motor vehicle owned and driven by the defendant Stephen Jennex was stopped immediately behind the respondent. A third motor vehicle owned by the appellant Joan Eager and driven by the appellant William Kervin drove into the rear end of the Jennex motor vehicle which in turn struck the rear end of the respondent’s motor vehicle.
[5] The damage to the motor vehicle which the respondent was driving was not extensive. The rear bumper was bent and the tail light was broken. The cost of repairing the damage was approximately $500.00.
[6] With respect to the respondent’s personal injuries, she testified at the trial as to the immediate impact of the collision upon her as follows:
Q. What can you tell me about whether you were wearing a seat belt?
A. I was
Q. How did you feel physically after the accident?
A. Extremely dizzy, staggery, off balance. My neck and shoulders were very tight and tense, headache, nauseated.
Q. What, if any, medical treatment did you get for these symptoms?
A. None that day.
Q. Did you seek medical treatment for these symptoms?
A. The next morning. Yes. I went to my family doctor.
Q. Who is that now?
A. Dr. Howard Conter.
Q. And what did he do for you that you recall?
A. He put me on inflammatory pills and arranged for me to go to physiotherapy.
[7] Some background facts concerning the respondent will be helpful at this point. She is 42 years of age and married. She has a grade seven education, having dropped out of school in grade eight. Around 1975 she worked at Sears for a year or two filling orders. She then stayed at home rearing her two children. She returned to the workforce, at Sears, for a short period before Christmas 1987. In 1989, she commenced employment, taking orders, with HH Marshall a magazine and book distributor. She worked approximately 40 hours per week and was paid $8.26 per hour. In June 1997 (three months before the accident) she was off work with pneumonia. She was due to return to work on September 9, 1997 (five days after the accident).
[8] As a result of the injuries which the respondent suffered in the motor vehicle accident she was unable to return to work, as scheduled on September 9, 1997. She eventually returned to work on a part time basis in mid-November 1997. In December she had to stop working again because of ongoing dizziness problems.
[9] Shortly after the accident the respondent received a telephone call from Ms. Sandra Scott, an adjuster for the appellant Eager’s motor vehicle insurer. Subsequently, on September 12, 1997 Ms. Scott met with the respondent and took a statement from her.
[10] In the statement, in addition to describing the circumstances of the accident the respondent said:
I went to the doctor the next morning. After the accident I was dizzy and unco-ordinated. I have had a couple of headaches since. I am still light headed. My neck and shoulders are tense and tight. I saw Dr. Howard Conter at Gladstone Building North Street. He examined me and prescribed physiotherapy. I am going to physiotherapy at MacAuley Physio, Lacewood Drive Halifax.
[11] Ms. Scott obtained from the respondent a general form authorization to obtain “any and all information you may have regarding my condition while under your observation or treatment at any time, including medical history and findings; consultation, prescriptions, treatment, x-ray, special consultation reports, diagnosis and prognosis, and copies of all hospital and medical records.”
[12] In addition to the treatment which the respondent received from Dr. Conter, i.e. anti-inflammatory pills and physiotherapy treatment, the respondent was referred to an ear specialist, Dr. Dempsey. The respondent testified she went to see him “because of the ongoing dizziness and staggering and off balance and everything.”
[13] Dr. Dempsey sent the respondent for a CAT scan and inner ear test.
[14] The respondent testified, in describing her dizziness as follows:
The best way I know how to describe it is almost like somebody that was drunk. If I were in the -- whichever room in the house or whatever, the room would be just spinning. For the first few days to even maybe a week, not only was I severely dizzy but I had triple vision. Like, if I were to watch TV, I would see of three of everything and -- well, it was to the point that I couldn’t watch TV.
[15] The respondent testified that she continued to have discussions with Ms. Scott during the month of October. She testified that Ms. Scott would call her periodically asking how she was doing:
Well, she would call me periodically asking how I was doing, how soon I thought I’d be ready to go back to work and, sort of, rushing things through. So, like I say, I was starting to feel a bit better, so I thought I’d go back and try it.
[16] Around the end of October, 1997 since she was starting to feel a little better the respondent thought she would be able to go back to work. She was doing two to three shifts a week and by December she found she could not handle it any longer because:
... it was -- from the movement and motion and whatnot at work, it was just -- had my head going crazy type of thing. Dizzy and nauseated and what not. So, I had to leave work again.
[17] She testified that she saw the ear specialist, Dr. Dempsey, again in November and testified with respect to that visit as follows:
Q. And what did Dr. Dempsey do for you when you saw him - - the second time you saw him?
A. Okay. Prior to that when I saw him, he’d arranged for a cat scan and an inner ear test. So, I think when I visited in November, he had given me the reports of those. He said that, at that time, I had lost 70 percent of the use of my left inner ear. It should be a three to six month recovery period.
Q. Did he tell you anything else?
A. Not that I can recall.
[18] The respondent testified that shortly after December 3, 1997 she received a telephone call from Ms. Scott who was calling to see if the respondent was ready to settle. The respondent testified:
A. And I asked her what she meant by that. And she said that they were ready to make an offer. And the offer was thirty-five hundred dollars ($3,500.).
Q. And what did you respond to that?
A. I told her I thought that was a bit unfair for what I was going through.
Q. And?
A. The conversation basically ended at that.
[19] Approximately one week later the respondent received another telephone call from Ms. Scott and she testified as to that conversation as follows:
A. I just don’t remember the date but it was - - some time after the first phone call, she had called back and said, “Hi, it’s Sandy Scott. I’d like to know if you’re ready to settle?” And she said, “We’d like to get this claim settled.” And she said, “The utmost we can give you is seven thousand dollars ($7,000).
Q. And what was your response to that?
A. I asked her to leave it with me and I would chat it over with my husband and get back to her.
Q. In this conversation or any of the conversations you had with Sandy, what discussions did you have with regard to lost wages?
A. None.
[20] The respondent testified that she later discussed the $7,000.00 offer with her husband:
A. . . . But we, sort of, both agreed that, “Well, perhaps we’ll take it. It’s the most she can give as she had told me and maybe further down the road that offer would not be there.”
Q. What happened then?
A. Well, I’m not sure if it was that same day or perhaps the next day, if I had called Sandy to tell her that I would take it or if she had called me back. I’m not certain on that. But we did set up a time as to where and when I was to pick it up.
Q. Did you discuss this offer with anyone else besides your husband?
A. No.
Q. All right. How did you feel when you were dealing with Ms. Scott?
A. Well, when she told me that seven thousand dollars ($7,000) was the most she could give, I - - not knowing anything about insurances and whatnot, I believed her and trusted that she was telling me the truth. On the same hand, I felt rushed because she wanted to get the claim settled. So, I sort of felt rushed. Like, you know, had to do it type of thing. And like I say, I put my trust in her that she was being truthful.
[21] Arrangements were made for the respondent to go to Ms. Scott’s office to pick up her money on December 22, 1997.
[22] The respondent went to Ms. Scott’s office, on December 22, 1997 accompanied by her daughter. As to the circumstances surrounding the signing of the release, the respondent testified as follows:
Q. And what happened when you got to the office?
A. Tracey and I walked in and Sandy took us off to the left into a room. She handed me a piece of paper. She told me to read over it and sign it and she would be back with my cheque. She left the room. She was not gone very long at all. And I briefed over the paper and I signed my name. She handed me my cheque and I handed her the paper and we were basically out of there.
Q. What -- you were basically out of there. What if anything happened between the time you left that room and the time you left the building? Did anything happen in the interim?
A I believe she stopped at the photocopier to run a copy off to give me one - the paper that I had signed.
[23] The respondent testified that she knew that the $7,000.00 payment to her was “for being in the accident.” However, she further testified that the $7,000.00 payment “was never broken down to me. I just figured it was for being involved in the accident.”
[24] As to why the respondent became dissatisfied with the settlement, she testified that her symptoms with respect to her ear problems were ongoing; and that on a further visit with Dr. Dempsey she was told that her injury would be with her for the rest of her life.
[25] Finally, the respondent testified that prior to the settlement being made on December 22, 1997 she had not seen any medical reports prepared by Dr. Conter or Dr. Dempsey, she had not seen a lawyer prior to settling the claim, and she had not consulted with anyone who would have suggested a figure for settlement of her claim.
[26] Ms. Scott, the adjuster, testified for the appellant. As noted, she met with the respondent on the afternoon of September 12th, 1997 (Appeal Book, page 344) at her home. At the meeting, Ms. Scott took a statement, a questionnaire, obtained a medical release to allow her to obtain doctors’ reports, authorization for wage information and left with the respondent the IBC Medical Report Form with a request she take it to her doctor for completion. The respondent’s description of her medical condition in the statement given on September 12th is set out at paragraph 10 above.
[27] Ms. Scott indicated that from her investigation of the matter she concluded that the impact was “not a major force”.
[28] Ms. Scott received the IBC Medical Report Form on October 16th, 1997. The form had been completed by Dr. Conter. Dr. Conter described the prognosis as good after about three to four months and noted that he expected 100% recovery. He estimated total disability at one to two weeks and partial disability for two to sixteen weeks.
[29] Ms. Scott testified that the next contact with the respondent was in December. She spoke initially with the respondent’s husband and was advised that his wife had a consultation with an ear specialist, that she had suffered 50% hearing loss but that she would recover over time. Ms. Scott later spoke with the respondent who advised that she had seen Dr. Dempsey, the ear specialist. According to Ms. Scott, the respondent reported that she had been told by the doctor that the ear problem was usually caused by either a virus or an infection but that the auto accident may have aggravated it. Ms. Scott’s evidence was that the respondent also advised her that she was back to work and had completed her physiotherapy.
[30] Ms. Scott then wrote to Dr. Conter for an up-date which she received in the form of a letter dated December 16th.
[31] Dr. Conter stated that Mrs. Blackburn had suffered injuries to her cervical spine and her vestibular apparatus in a motor vehicle accident on September 4th and that she had been referred to Dr. Ian Dempsey for treatment for the latter. (At an earlier point in his letter, Dr. Conter had said that the ear problem was “... possibly from the motor vehicle accident.”) He stated that Dr. Dempsey had indicated that he felt “it takes often upwards of six months for patients to recover from peripheral vestibular injury.” But later he said that “Dr. Dempsey felt the damage to the vestibular apparatus would take up to six months to recover. ... It is our hope then that after six months Mrs. Blackburn will return back to where she was before the trauma of September 4th, 1997.”
[32] Dr. Conter’s report contained as an enclosure a letter from Dr. Dempsey dated November 17th, 1997. Dr. Dempsey noted that the respondent “had recent problems with dizziness since late August.” (emphasis added) He concluded that “[i]t usually takes upwards of six months for patients to recover from peripheral vestibular injuries. If she still continues to have problems after this point, then I would be happy to see her again and consider further testing.” (emphasis added)
[33] Ms. Scott testified that she was aware from her earlier conversation with the respondent that she had had pneumonia. Ms. Scott knew from Dr. Dempsey’s report that the dizziness had been a problem since late August, that is, prior to the September 4th accident. Ms. Scott also testified that her understanding from her conversation was that the dizziness may have been caused by a bacterial infection and that the auto accident may have aggravated that condition.
[34] Ms. Scott testified that she called the respondent on December 18th, 1997, and asked her whether she was ready to start negotiations for a settlement of the claim. The respondent indicated yes and Ms. Scott presented an offer which, at the time of trial, she believed was $5,500.00. Her evidence was that the respondent stated that she had consulted with a lawyer but that she had not retained a lawyer and that she declined to give Ms. Scott the name of the lawyer. The respondent was reported by Ms. Scott to have said that the lawyer had suggested that a fair settlement of this claim would be in the $10,000.00 range. Ms. Scott then gave what she referred to as a “counter-offer” of $6,500.00. Her evidence was that that offer was left with Mrs. Blackburn.
[35] Ms. Scott testified that she subsequently settled the claim at $7,000.00. Her claim activity log notes end on December 18th with a note of a $6,500.00 offer and she testified to having no specific recollection of how the negotiations were concluded at $7,000.00.
[36] Ms. Scott set up an appointment with the respondent for Monday, December 22nd to complete the settlement. The respondent attended. A typed release was prepared and signed by the respondent and a photocopy of it along with the cheque for $7,000.00 were provided to her by Ms. Scott.
III. DECISION OF THE TRIAL JUDGE:
[37] As this summary of the evidence demonstrates, there were significant differences between the testimony of the respondent on one hand and Ms. Scott on the other. Gruchy, J. clearly preferred the respondent’s evidence . He characterized Ms. Scott’s testimony on certain points as “most unsatisfactory” noting that her testimony at trial had the appearance of “self serving reconstruction.” He noted that it was clear on the evidence that Ms. Scott had no direct recollection of the events and had to depend entirely on her notes which were admittedly incomplete.
[38] On the question of whether the release should be set aside, the trial judge found that there was no mutual mistake and that he was not persuaded that the respondent did not understand the effect of a final release. He concluded, however, that the settlement was an unconscionable transaction and that the release should be set aside. Applying the test set out by Hallett, J. (as he then was) in Stephenson v. Hilti (Canada) Ltd. (1989), 93 N.S.R. (2d) 366 at para. 12, the trial judge reached the following conclusions:
1. Ms. Scott decided as a result of reading the medical reports that the results of the injury were far more significant than she had realized and that she would not share that information with the plaintiff;
2. The respondent did not have access to copies of these medical reports and did not know that her injury was potentially more significant than she had previously realized;
3. This resulted in the creation of an inequality of bargaining position arising out of ignorance of the weaker party. The judge said:
... The plaintiff had been left in ignorance of the full implications of the injury. She had earlier understood that her recovery would take up to six months. She had never understood that recovery would take upwards of six months; that is, in excess of six months. Ms. Scott upon reading the reports, must have recognized the difference and that the effects of this injury were more serious than the plaintiff had realized.”
4. Ms. Scott unconscientiously used the ignorance of the plaintiff to achieve the advantage of an early and unconscionable settlement.
5. The agreement reached was substantially unfair to the plaintiff. Ms. Scott, despite the obvious warning that the plaintiff had suffered a loss of employment and would probably continue to suffer that loss upwards of six months, did not make any attempt to calculate that loss.
6. The departure from the community standards consisted of Ms. Scott’s failure to tell the plaintiff of the content of the reports, not with respect to the quantum of damages.
IV. ANALYSIS:
[39] The appellants accept that the transaction may be set aside as unconscionable if it is shown that: (a) there is an inequality of bargaining position arising out of ignorance, need or distress of the weaker party; (b) the stronger party has unconscientiously used a position of power to achieve an advantage; and (c) the agreement reached is substantially unfair to the weaker party in that it is sufficiently divergent from community standards of commercial morality that it should be set aside. The appellants’ position is that the trial judge erred in finding that any of these indicia of unconscionability were present in this case.
[40] The appellants first say that the trial judge misapprehended the meaning of the word “ignorance” as that term is used in the first element of the test for an unconscionable transaction. They submit, based on Westminister Savings Credit Union v. 442391 B.C. Ltd., [2000] B.C.J. No. 795 (S.C.), that ignorance within the meaning of the first element of an unconscionable transaction is “a general ignorance flowing from the effect of a document or of commercial matters generally ... not ... specific ignorance about a particular matter.”
[41] The appellants submit that the sole basis upon which the trial judge found there to be an inequality of bargaining position was that the plaintiff was ignorant of the full implications of her injury. This conclusion was based on the trial judge’s finding that Ms. Scott knew, from a careful reading of the letters from Dr. Conter and Dr. Dempsey, that the plaintiff’s injuries resulting from the accident were much more serious than she had envisaged but that the plaintiff was left in ignorance on this point. Specifically, the judge found that the plaintiff had earlier understood that her recovery would take “up to six months” and that Ms. Scott, upon reading the reports, must have recognized the difference between that and Dr. Dempsey’s statement that recovery would take “upwards of six months”, that is, in excess of six months. This, say the appellants, is ignorance of a “particular matter” which does not support a finding of inequality of bargaining position.
[42] The respondent submits that the appellants’ definition of the sort of “ignorance” required under the first element of unconscionability is too narrowly defined for a case such as this one which does not involve a commercial contract between two sophisticated parties. The respondent notes that this Court in Atlas Supply Co. of Canada v. Yarmouth Equipment Ltd. (1991), 103 N.S.R. (2d) 1, cited with approval statements of Lambert, J.A. in the British Columbia Court of Appeal in Harry v. Kreutziger (1978), 95 D.L.R. (3d) 231 at 241 as follows:
In my opinion, questions as to whether use of power was unconscionable, an advantage was unfair or very unfair, a consideration was grossly inadequate, or bargaining power was grievously impaired, to select words from both statements of principle, the Morrison case and the Bundy case, are really aspects of one single question. That single question is whether the transaction, seen as a whole, is sufficiently divergent from community standards of commercial morality that it should be rescinded. To my mind, the framing of the question in that way prevents the real issue from being obscured by an isolated consideration of a number of separate questions; as, for example, a consideration of whether the consideration was grossly inadequate, rather than merely inadequate, separate from consideration of whether bargaining power was grievously impaired, or merely badly impaired. Such separate consideration of separate questions produced by the application of a synthetic rule tends to obscure rather than aid the process of decision.
(emphasis added)
Hallett, J. (as he then was) cited this same passage with approval in Stephenson v. Hilti, supra.
[43] The term “ignorance”, as an element supporting a finding of an unequal bargaining position, cannot be defined as narrowly in all cases as it was in the Westminister Savings Credit Union, supra, case relied on by the appellants. The transaction in that case was negotiated between a financial institution and an experienced real estate and business person. The judge found that the alleged ignorance of the actual value of the property in that case could not be said to have left the party alleging unconscionability in the power of the allegedly stronger party. In a case like the present one, involving an unsophisticated and inexperienced lay person and an experienced insurance adjuster, ignorance may refer to the unsophisticated party’s lack of relevant experience. This was made clear by the British Columbia Court of Appeal in Smyth v. Szep, [1992] B.C.J. No. 37 (Q.L.)(C.A.) at p. 8. Taylor, J.A., for the majority, said this:
I think it clear from the decision in [Cougle v. Maricevic, B.C.C.A. 81 08060, Feb. 16, 1983] that a settlement such as the present may be set aside as unconscionable where it is shown that the parties were not on an equal footing – which will necessarily be so where a young person such as the present plaintiff, without relevant advice, knowledge or experience, settles a personal injury claim with an experienced Insurance Corporation adjuster – and where the settlement is made at the instigation of the adjuster for a sum which cannot be said to be “fair” on the basis of what was then known to the adjuster, or within the adjuster’s means of knowledge, unless there are special circumstances justifying the transaction.
[44] In our view, the “ignorance” of a party, like the question of unconscionability itself, must be examined in the particular factual context of each case including the relative degrees of sophistication and experience of the parties, their respective resources and whether independent advice was received. In Norberg v. Wynrib, [1992] 2 S.C.R. 226 at 249-50, LaForest, J. said this with respect to inequality of bargaining power:
An inequality of bargaining power may arise in a number of ways. As Boyle and Percy, Contracts: Cases and Commentaries (4th ed. 1989), note, at pp. 637-38:
[A person] may be intellectually weaker by reason of a disease of the mind, economically weaker or simply situationally weaker because of temporary circumstances. Alternatively, the “weakness” may arise out of a special relationship in which trust and confidence has been reposed in the other party. The comparative weakness or special relationship is, in every case, a fact to be proven.
As the last sentence of this passage suggests, the circumstances of each case must be examined to determine if there is an overwhelming imbalance of power in the relationship between the parties.
[45] In the present case, the trial judge found as a fact that the adjuster knew but the plaintiff did not know that her recovery would take in excess of six months and that the adjuster used this knowledge in conjunction with the plaintiff’s ignorance of this fact, which was central to the value of the plaintiff’s claim, to achieve the advantage of an early and substantially unfair settlement. This finding must be viewed in the context of the particular transaction and the particular parties. The transaction was the settlement of a personal injury claim; the parties were an insurance adjuster experienced in handling such claims and the respondent who was a person with little formal education, limited means and, so far as we know, no relevant experience. The judge did not err in finding that the respondent’s ignorance of her true prognosis is the sort of ignorance on which a finding of inequality of bargaining position may be based in a case like this one involving the settlement of a personal injury claim between an unsophisticated plaintiff and an experienced insurance adjuster.
[46] The appellants further submit that there is no evidentiary support for the trial judge’s findings that Ms. Scott knew the full implications of the respondent’s injury and that the respondent did not know those full implications. The submission is that the trial judge made a palpable and overriding error by assuming that the reports by Drs. Conter and Dempsey, which Ms. Scott read, unequivocally state that the respondent’s injury would take more than six months to resolve. As a result of this error, it is submitted, the trial judge made a further error in holding that the respondent could be ignorant of something which was not even known with reasonable certainty.
[47] We turn first to the judge’s findings concerning what Ms. Scott knew about Mrs. Blackburn’s prognosis. His specific findings on this point are as follows. At para. 33 of his reasons, the trial judge finds that Ms. Scott “knew or ought to have known from a careful reading of [Dr. Conter’s letter of December 16th and Dr. Dempsey’s enclosed opinion] that the results of the apparently slight injury suffered in the accident were much more serious than either she or the plaintiff had earlier envisaged.” (emphasis added) However, at para. 37 he found that Ms. Scott “decided that the results of the injury were far more significant than she or the plaintiff had realized and that she ...”. (emphasis added) Finally, he commented “Ms. Scott, upon reading the reports, must have recognized the difference and that the effects of this injury were more serious than the plaintiff had realized.” (emphasis added)
[48] The tenor of the trial judge’s reasons, read as a whole, is that Ms. Scott understood upon reading the medical reports which she obtained in mid December that this was no longer a fairly minor cervical spine case and that the plaintiff’s injuries were at least potentially much more serious than Ms. Scott had previously realized. At the very least, she recognized that the case had gone from being one in which the injury had largely resolved to one with many unanswered questions and uncertainties. This inference is supported in the record by the text of the medical reports themselves and by Ms. Scott’s haste to effect settlement upon receiving these reports in the few days before Christmas even though her file was incomplete and she had apparently made no attempt to calculate the value of the claim. While the trial judge uses the words that Ms. Scott “must have recognized” or “ought to have known” the import of the medical letters, he uses these expressions to show that he is drawing an inference about what she knew from all of the evidence.
[49] The appellants raise a number of issues about this finding. They note that Dr. Conter’s December 16th letter speaks of dizziness related to inner ear pathology possibly from the motor vehicle accident. It follows, they submit, that it is far from clear that the respondent’s dizziness was caused by the motor vehicle accident, particularly given that the respondent had been off work prior to the accident because of dizziness. The appellants also point to some ambiguity in the two medical letters. At one point Dr. Dempsey uses the phrase that recovery will take “upwards of six months”, which, it is agreed, means “in excess of six months”. However, Dr. Conter’s report seems to equate the expression “upwards of six months” with the expression “up to six months” to recover. The appellants note that Dr. Dempsey makes no connection between the accident and the respondent’s dizziness and in fact states in his letter that the dizziness pre-dated the accident.
[50] Ms. Scott’s testimony was that she did not interpret Dr. Dempsey’s report as indicating that recovery would extend beyond six months although she conceded in cross-examination that the report could be interpreted that way.
[51] The trial judge obviously had significant difficulties with Ms. Scott’s testimony. While the appellants complain about the judge’s adverse credibility findings respecting this testimony, the trial judge’s concerns in our respectful view, are adequately supported by the record. Other evidence before the trial judge included the following. Ms. Scott testified under cross-examination that she did not make any calculations as to the value of the claim. She appears to have made no calculations with regards to the value of lost wages, appears (erroneously) to have thought that CPP was a deductible item from the value of the claim for lost wages and does not appear to have turned her mind in any respect to lost wages or the potential future lost wages as a result of the uncertain prognosis. Although she had performed no calculations and there were other gaps in her file material, Ms. Scott moved to try to settle the claim almost immediately upon reviewing Dr. Conter and Dr. Dempsey’s reports. This all occurred in the days leading up to Christmas with the cheque and release being exchanged on December 22nd. Ms. Scott’s file notes end before settlement was reached.
[52] A trial judge’s findings of fact, particularly those based on findings of credibility, should not be interfered with on appeal unless there is some palpable and overriding error. The conclusions reached by the trial judge on this point are reasonably supported by the record before him and this Court would not be justified in setting them aside.
[53] We turn next to the finding that the plaintiff was ignorant about the full implications of her injury. The appellants’ main line of attack on this finding is that it is based on the incorrect finding that the full implications of the injury were known and described by Drs. Dempsey and Conter.
[54] This submission misses the mark. With respect, the issue is not how definite Drs. Conter and Dempsey were in their prognosis but whether it was clear to Ms. Scott, but unknown to the respondent, that the prognosis was uncertain and that recovery might well extend beyond six months. The respondent’s evidence at trial was that her understanding was that “it should be a 3 to 6 month recovery period”. While Ms. Scott testified that she told the plaintiff she had the reports of Dr. Conter and Dr. Dempsey, the trial judge found as a fact that Ms. Scott did not do so and as well found that she did not tell the respondent of the contents of the reports.
[55] In my respectful view these findings of fact are reasonably supported on the record and are, therefore, not open to appellate intervention.
[56] The appellants’ next point is that the trial judge erred in finding that the settlement was substantially unfair to the respondent. The submission is that the trial judge, in order to make a finding that the transaction was substantially unfair, had to be satisfied that the amount of the settlement was considerably less than the damages to which the plaintiff was entitled. The appellants note that the judge was careful to make no comment on the question of the quantum of damages, observing that he did not have enough evidence before him to make such an assessment and that in any event such an assessment would be beyond the scope of counsels’ agreement. The appellants submit, however, that although the judge was not called upon to make a final assessment of the respondent’s damages, he was required to “proceed some way down that road in order to determine whether or not the consideration given for the release was substantially unfair.”
[57] The appellants stress that the question is not what the trial judge or this Court would award to the respondent today but, rather, whether or not the settlement sum of $7,000.00 was substantially unfair based on the respondent’s condition on December 22nd, 1997. They submit that nothing in the evidence available at the date of settlement and the signing of the release by the respondent pointed to any permanent injury extending indefinitely into the future.
[58] The premise of this argument is that, in deciding whether a transaction is unconscionable, there must be a comparison between the consideration given and the value of what was surrendered. In my respectful view, this is not the law. As Professor S.M. Waddams points out in his text The Law of Contracts, (1999), at §545, not every case of alleged unconscionability lends itself to analysis in terms of adequacy of consideration. In a case like this one, the basic point is that the settlement was improvident because the prognosis and even the question of causation were too uncertain. It is hardly sensible to require some provisional assessment of damages where the complaint is that such an assessment could not realistically have been made at the time of settlement.
[59] In Woods v. Hubley (1995), 146 N.S.R. (2d) 97 (C.A.), this Court unanimously upheld the decision of a trial judge to set aside a release in a personal injury action. On the question of what constitutes a substantially unfair transaction, the Court stated as follows:
[30] While I agree with counsel for the appellants that the relevant time to evaluate the bargain is the time of the settlement, I do not agree that it is a useful exercise here to look at cases dealing with injuries similar to those described in the medical reports in the adjuster's file. To anybody with the slightest experience in dealing with claims, it would be clear that on November 15, 1989, the respondent was facing an uncertain prognosis. While an early and complete recovery was a possibility, chances of long‑term problems were so high that the only sound advice to the respondent would be to not settle the claim at an early stage. Only when the true extent of the disability was finally measured by expert medical persons after the effect of the operation and the progress of convalescence became known could one seriously entertain the possibility of settlement. It is really for this reason that the bargain was improvident, substantially unfair and divergent from community standards of commercial morality. No informed person would countenance settlement at such an uncertain stage.
(emphasis added)
[60] This is the reasoning which underpins the trial judge’s conclusion in the present case. The trial judge did not err in law in concluding that, in the circumstances of this case, he could find the transaction to be substantially unfair to the respondent without undertaking a comparison of what damages would have been payable to her at the date of the settlement.
[61] In the result, we see no error of law nor any reviewable error of fact in the decision of the trial judge to set aside the release as unconscionable. In light of that conclusion, it is not necessary to address the issue of unilateral mistake raised by the respondent’s notice of contention.
[62] The appeal is dismissed. As the parties have agreed there should be no costs, we order none.
Glube, C.J.N.S.
Flinn, J.A.
Cromwell, J.A.