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Court Testimony From Experts @ BEC

Excerpt from Millott v. Reinhard

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] Bruce, 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):

[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.