Court File and Parties

CITATION: Nuria Abdosh v. American Airlines Inc., 2016 ONSC 2121

COURT FILE NO.: CV-10-397204

DIVISIONAL COURT FILE NO.: 623/15

DATE: 2016-04-20

ONTARIO SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

RE: NURIA ABDOSH, Plaintiff/Appellant AND AMERICAN AIRLINES INC, Defendants/Respondents

BEFORE: Regional Senior Justice Morawetz

COUNSEL: P. Michael Rotondo, for the Plaintiff Clay S. Hunter, for the Defendants

HEARD at Toronto: March 21, 2016

REASONS: April 20, 2016

Endorsement

[1] The Plaintiff seeks leave to appeal the Order of Wright J., given orally, on November 13, 2015, fixing costs of the Plaintiff’s action in the amount of $10,000.

[2] The action arises out of a slip and fall incident which occurred on an American Airlines aircraft on July 8, 2008. The action was commenced on February 16, 2010. The Plaintiff sought $750,770 in damages, plus interest and costs.

[3] On November 28, 2012, the Defendant served a formal Offer to Settle in the amount of $15,000 all inclusive.

[4] On December 3, 2014, the Plaintiff served a formal Offer to Settle in the amount of $15,000 in damages, inclusive of interest, plus costs and disbursements to be agreed or determined by a court or by an assessment officer. The action was settled on this basis.

[5] The parties could not agree on costs. The Plaintiff sought an assessment of costs and disbursements in the amount of $18,900.24. On November 9, 2015, the Plaintiff served an Amended Notice of Motion seeking an assessment of costs and disbursements in the amount of $45,730.95. The fee component, including tax, amounted to $24,968.48. The disbursement component, including tax, amounted $20,762.47.

[6] On November 13, 2005, Wright J. heard the motion to determine costs of the action. Extensive materials were filed.

[7] The Defendants took the position that the Plaintiffs were entitled to nothing on account of costs. Wright J. disagreed. Wright J. referenced that she had no criticism of how the plaintiffs conducted themselves in the matter. She noted that the Plaintiff was ultimately successful and was entitled to some costs. The question became how much.

[8] Justice Wright awarded to the Plaintiff costs in the amount of $10,000. In her reasons Wright J. stated:

“After taking into account the material, the relevant law, the submissions of counsel and the unique circumstances that attach to this matter, I find costs in the amount of $10,000 inclusive to be both fair and reasonable.”

[9] Counsel for the Appellant stated the issues to be decided as follows:

1. Did Justice Wright proceed on the correct principles in awarding the costs of the action?
2. Did Justice Wright provide full and proper reasons for the quantum of the costs of the action awarded?
3. Is the quantum awarded for the costs of the action correct?

[10] Counsel for the defendant stated the issues as follows:

Should leave to appeal be granted? a) Did Justice Wright err in principle in exercising her discretion to award costs? b) Are the reasons of Wright J. insufficient to support her award of costs? c) Is the amount of Justice Wright’s award of costs reasonable and proportionate to the amount recovered by the Plaintiff?

[11] The order of Wright J. is a final order and the amount involved is $10,000. The reference to “exclusive of costs” in s.19(1.2)(a) is not applicable as Wright J. did not award costs on the motion.

[12] Section 131 of the CJA provides that the costs of a proceeding are in the discretion of the court.

[13] Section 133(b) of the CJA provides:

133. Leave to appeal required – No appeal lies without leave of the court to which the appeal is to be taken, (b) where the appeal is only as to costs that are in the discretion of the court that made the order for costs.

Standard of Review of an Order for Costs:

[14] Recently, in Men at Work General Contractors Ltd. v. Macdonald 2015 ONSC 383, the Divisional Court (Lederer J.) canvassed the law with respect to what is required in order to obtain leave to appeal an order as to costs.

14 - Costs are, generally, considered to be a matter of discretion. Appeals of costs orders are unusual:

Leave to appeal costs orders will be granted only in the most obvious cases and very sparingly. (Culligan Springs Ltd. v. Dunlop Lift Truck (1994) Inc., 2005 32571 (ONSC)).

15 - For leave to be granted, the judge must be shown to have acted on a wrong principle, to have misapprehended significant facts or to have made the determination in a non-judicial manner (The Children’s Aid Society of the Niagara Region v. R. De G., 2005 11187(ONSC) DC).

“In order to succeed on an application for leave to appeal, the court must be persuaded that the trial judge exercised his discretion on wrong principles. The applicant must show that there are strong grounds upon which the appellate court could find that the judge erred in the exercise of her/his discretion. (Culligan Springs, supra)

16 – A the test of reasonableness applies:

In recent cases, the Ontario Court of Appeal emphasized that there is an “overriding principle of reasonableness” that must govern the judicial exercise of fixing costs.” See Culligan Springs Ltd., supra.

[15] The Court of Appeal for Ontario has stated that the overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant (emphasis added). Boucher v. Public Accountants Council (Ontario), 2004 14579.

[16] The general rule is that the court will not disturb the costs award if the record discloses a proper basis for the judge’s exercise of discretion. (See Men at Work, supra and AE Hospitality Ltd. v. George, 2015 ONSC 7370(Ont. Div. Court)

[17] The Plaintiff commenced this action seeking damages of $750,000 plus interest and costs. The matter was settled for $15,000. As noted above, disbursements alone exceed the amount of the settlement. Therein lies the problem.

[18] Although Wright J. does not specifically reference the factors set out in Rule 57.01(1), there is no requirement that the specific factors have to be accounted for in any decision respecting an award of costs. (See Men at Work, supra and AE Hospitality Ltd., supra). In addition, it is clear that Wright J. was aware of Rule 57, as Rule 57.05(1) is referenced in her reasons.

[19] Further, as noted at paragraph 24 of the respondent’s factum, Wright J. had before her all of the material set out at Tabs 5 - 13 of the plaintiff’s motion record, including the defendant’s factum setting out counsel’s position with respect to proportionality, and the factors to consider under Rule 57.01. Further, as set out in her reasons, Wright J. stated that she had taken “into account the material, the relevant law, the submissions of counsel and the unique circumstances that attach to this matter”.

[20] In my view, the record established a proper basis for the exercise of discretion by Wright J. in awarding costs in the amount of $10,000. Further, the award of costs in the amount of $10,000 is not an unreasonable amount for costs. It is proportionate to the amount recovered and within the range of expectations of the plaintiff.

[21] This is not the obvious case requiring the court to grant leave to appeal and disturb the discretionary decision arrived at by Justice Wright.

[22] In argument, counsel to the Plaintiff submitted that s. 19(1)(b) of the CJA may have application, together with R. 62.02(4). I disagree (see [11] above). However, even if R. 62.02(4) applies, I would not grant leave. Decisions in respect of costs are discretionary and the controlling authorities are not in conflict. Further, I have not been persuaded that there is a good reason to doubt the correctness of the order in question. I am also of the opinion that the matter is not of such importance that leave to appeal should be granted.

[23] In the result, leave to appeal the order of the Honorable Justice K. P. Wright dated November 13, 2015, is denied, with costs of this motion fixed in the amount of $3,811.60, being the full amount requested by the defendant, on a partial indemnity basis.

Regional Senior Justice G.B. Morawetz

Date: April 20, 2016