Court of Appeal for Ontario

Date: December 31, 2019 Docket: C66487 Judges: Lauwers, van Rensburg and Roberts JJ.A.

Between

Krystal Lynn Bondy-Rafael, Tanner Curtis Eyraud, a minor by his Litigation Guardian, Leeann Rafael, Spencer Ouellette, a minor by his Litigation Guardian, LeeAnn Rafael and LeeAnn Rafael

Plaintiffs (Respondents)

and

Soka Potrebic, Dane Potrebic, The Estate of Luigi Pipolo, by his Estate Trustee, Enza Mary Pipolo, Enza Mary Pipolo, Anthony Lino Pipolo, Anthony Pipolo Incorporated and the Corporation of the City of Windsor

Defendants (Appellants / Respondents)

Counsel

Sheldon A. Gilbert, Q.C., for the appellants

Brian A. Foster and Anne C. Davenport, for the respondents, The Estate of Luigi Pipolo, by his Estate Trustee, Enza Mary Pipolo, Enza Mary Pipolo, Anthony Lino Pipolo, and Anthony Pipolo Incorporated

Alan L. Rachlin, for the respondents, Krystal Lynn Bondy-Rafael, Tanner Curtis Eyraud, a minor by his Litigation Guardian, LeeAnn Rafael, Spencer Ouellette, a minor by his Litigation Guardian, LeeAnn Rafael, and LeeAnn Rafael

Heard: August 28, 2019

On appeal from: the order of Justice J. Paul R. Howard of the Superior Court of Justice, dated August 31, 2018.

Roberts J.A.:

A. Overview

[1] This appeal turns on the correct analytical approach to be followed in the fixing of costs when an action is settled before its adjudication on the merits.

[2] On May 4, 2004, the then infant plaintiffs, Krystal Lynn Bondy-Rafael and Tanner Curtis Eyraud, were catastrophically injured when struck by the SUV driven by Soka Potrebic while they were waiting for their mother to pick them up from the Pipolos' plaza. There was no issue that these plaintiffs' damages exceeded by several millions of dollars the Potrebics' and the Pipolos' respective third party liability policy limits.

[3] The Potrebics appeal from the order of the motion judge that required them to pay all the plaintiffs' partial indemnity costs in the amount of $927,934.08, without any contribution from the Pipolo respondents ("the Pipolos"), but net of an agreed upon contribution by the City of Windsor. While they also take issue with the quantum of the costs award, the main thrust of their appeal challenges the motion judge's apportionment of liability for damages as the basis for apportioning costs following a settlement.

[4] The background to the settlement is as follows. The plaintiffs reached a settlement with the City of Windsor in 2014. After more than ten years of litigation, the remaining parties agreed to settle the action in June 2017, about three months before the four-month trial of the action was scheduled to commence. The plaintiffs settled their claims as against the Potrebics for $1 million plus accrued interest [1], and as against the Pipolos for $1 million, plus costs to be determined by the court and allocated between the Potrebics and the Pipolos. The settlement and the fees and disbursements payable to plaintiffs' counsel were approved by the motion judge, who had also been assigned to hear the trial.

[5] The motion judge later heard argument on the issue of costs payable to the plaintiffs by the Potrebics and the Pipolos. The plaintiffs' disbursements were conceded, although their apportionment was not. The Potrebics and the Pipolos each argued that the other should be primarily responsible for the payment of the plaintiffs' costs.

[6] The motion judge assessed the Potrebics' and the Pipolos' respective liability based on his view of the merits of the action and concluded that the Potrebics were entirely responsible for the plaintiffs' damages. As a result, he found the Potrebics solely responsible to pay the plaintiffs' partial indemnity costs.

[7] For the reasons that follow, I would allow the appeal and re-allocate liability for the plaintiffs' costs equally between the Potrebics and the Pipolos consistent with their respective settlement contributions. In the circumstances of this case, the motion judge erred in his approach to fixing the plaintiffs' costs following the settlement by apportioning costs based on his assessment of what would have been the respective liability of the parties for damages at trial.

B. Issues

[8] The Potrebics raise two issues:

(i) The motion judge erred in his apportionment of costs as between the Potrebics and the Pipolos.

(ii) The motion judge erred in the amount of costs awarded to the plaintiffs.

[9] Before addressing these issues, I set out the background facts.

C. Background Facts

(1) The Accident and the Injuries

[10] For the purposes of this appeal, a brief summary of the relevant background and unchallenged facts suffices.

[11] On May 4, 2004, Ms. Bondy-Rafael, who was then 17 years old, worked part-time at the nursery school that her then 2-year-old brother, Mr. Eyraud, attended. The nursery school was located two doors south of the Pipolos' plaza. At the end of the nursery school day, Ms. Bondy-Rafael took her brother to get a snack at a convenience store located in the plaza. They sat outside the convenience store while they waited for their mother, LeeAnn Rafael, to pick them up. Other than a shallow curb, there were no barriers between the plaza's parking lot and the area where Ms. Bondy-Rafael and Mr. Eyraud were seated.

[12] Without warning, Dane Potrebic's SUV, driven by Ms. Potrebic, left the parking lot, drove over the curb, and hit Ms. Bondy-Rafael and her brother. They were both catastrophically injured. Neither of them will ever be able to live independently or to support themselves financially.

(2) The Action and Settlement

[13] In 2006, the plaintiffs, by their litigation guardian, Ms. Rafael, sued the Potrebics, the Pipolos, and the City of Windsor. They pleaded that Ms. Bondy-Rafael and Mr. Eyraud were catastrophically injured by the accident. Plaintiffs' counsel estimated the plaintiffs' damages to be: $18.8 million for Mr. Eyraud; $5.6 million for Ms. Bondy-Rafael; $300,000 for Ms. Rafael's Family Law Act, R.S.O. 1990, c. F.3 ("FLA") claims; and $225,000 for Spencer Ouellette's FLA claims.

[14] The plaintiffs sought damages against the Potrebics on the ground that Ms. Potrebic was negligent in her operation of the motor vehicle that struck and catastrophically injured Ms. Bondy-Rafael and Mr. Eyraud. Their claim against the Pipolos alleged negligence on the basis that they failed to install barriers in the parking lot that would have prevented the vehicle from jumping the curb and hitting Ms. Bondy-Rafael and Mr. Eyraud. The plaintiffs claimed damages against the City of Windsor on the ground that it had jurisdiction over the area where the Pipolos' plaza was located and was responsible for promulgating and enforcing bylaws and standards affecting the plaza, which were deficient and failed to protect the plaintiffs.

[15] In 2007, the Potrebics' counsel advised the plaintiffs that their third party liability policy limits were capped at $1 million, inclusive of interest, plus costs. The Potrebics offered to pay their policy limits to settle the action, provided that the plaintiffs agreed to limit their liability to the $1 million policy limit. In September 2007, the Potrebics's insurer paid $1 million into an interest-bearing trust account. When the investment matured on September 12, 2017, its total value was $1,117,544.77 inclusive of interest.

[16] The plaintiffs did not accept the Potrebics' offer at that time because of the obligation to limit the Potrebics' liability. Over the next ten years, they pursued the Pipolos to contribute to the settlement. To that end, they secured three experts' reports supporting their allegation of negligence against the Pipolos. The Pipolos obtained their own expert's report that disputed the opinions of the plaintiffs' experts and expressed the view that the Pipolos were not negligent. The Pipolos' third party liability policy limits were fixed at $2 million, including interest.

[17] In 2010, the plaintiffs settled their statutory accident benefits claims with their own insurer for a total of $3,007,903.97 without litigation.

[18] On June 20, 2014, the court approved the settlement of the plaintiffs' claim against the City of Windsor in the amount of $400,000, plus $100,000 towards the plaintiffs' legal fees, inclusive of HST, and $50,000 for disbursements, inclusive of HST, based on a Mary Carter Agreement.

[19] The trial of the action was estimated to take four months and scheduled to commence on September 5, 2017. In June 2017, the remaining parties achieved a settlement, subject to court approval. All issues were settled, except for the amount of costs to be paid to the plaintiffs and the apportionment of costs as between the Potrebics and the Pipolos. The minutes of settlement provided that the costs would be determined by a judge of the Superior Court of Justice.

[20] On November 24, 2017, the motion judge approved the settlement. The judgment provided that "the defendants shall pay to the plaintiffs their costs in an amount and allocated amongst the defendants in accordance with a further order to be made by a judge of this Court" and that they were collectively entitled to a credit against the plaintiffs' costs in the amounts paid by the City of Windsor - $100,000 for fees and $50,000 for disbursements, including HST.

[21] The motion judge also approved the fees payable by the plaintiffs to their counsel pursuant to their contingency fee agreement, under which the plaintiffs agreed to pay their counsel 30 percent of any amount awarded in settlement or after trial. The motion judge fixed counsel fees for the tort action and the statutory accident benefits claims in the amount of $1,222,996.68, inclusive of HST.

(3) Fixing of Costs

[22] The parties later appeared before the motion judge on a motion to have the plaintiffs' costs fixed. They filed the settlement brief prepared by plaintiffs' counsel for the approval of the settlement, including the contingency fee agreement, a brief of counsel's dockets, the voluminous medical reports and clinical records in relation to the injuries suffered by Ms. Bondy-Rafael and Mr. Eyraud, as well as the four experts' reports submitted by the parties concerning the configuration of the Pipolos' plaza. There was a conflict between the plaintiffs' and the Pipolos' experts.

(a) The Positions of the Parties

[23] The plaintiffs' three experts opined that the Pipolos' plaza was negligently configured in that it lacked any barriers, such as bollards, in front of the parking lot that they stated would have prevented the accident. The Pipolos' sole expert disagreed and was of the view that the plaza was configured in accordance with relevant standards. No cross-examinations of any of the experts occurred and there was no oral evidence called at the hearing of the costs motion.

[24] The Potrebics' position was that the Pipolos should bear most of the plaintiffs' costs. They submitted that the Pipolos' delay in admitting liability increased the plaintiffs' costs. They pointed to their 2007 offer to pay their policy limits and submitted that the Pipolos should pay "a significantly greater percentage" of the costs award. Finally, they stated that the costs of particular motions for which costs had been fixed should be excluded from the plaintiffs' costs, as well as costs of a motion for summary judgment brought by the Pipolos, in which the Potrebics did not participate, and which was under reserve at the time of the settlement.

[25] The Pipolos submitted that the motion judge should apportion costs between them and the Potrebics based on their respective liability for the plaintiffs' damages. They argued that the Potrebics were entirely responsible for the plaintiffs' injuries and that the plaintiffs' theory of the Pipolos' liability was dubious. They relied on their own expert's report to exonerate them from any negligence in the configuration of their plaza. They submitted that, as a result, they should pay no costs.

(b) The Decision Under Appeal

[26] The motion judge organized his reasons around three principal issues on the fixing of costs: the scale of the plaintiffs' costs; the amount of the plaintiffs' costs; and the apportionment of the responsibility to pay the plaintiffs' costs as between the Potrebics and the Pipolos.

[27] With respect to the first two issues, the motion judge rejected the plaintiffs' request that their costs be fixed on a full indemnity scale and ordered that they be awarded on a partial indemnity basis. He then fixed the plaintiffs' partial indemnity costs for the tort action, net of the City of Windsor's settlement contribution, in the amount of $800,000 for fees, including HST, and $127,934.08 for disbursements (the amount of the disbursements was conceded and is not challenged on appeal).

[28] In establishing the quantum of costs, the motion judge took into consideration the factors listed at r. 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. In particular, he considered the amount of the plaintiffs' recovery in terms of the settlement of the tort action combined with the settlement of the statutory accident benefits claim.

[29] On the apportionment of the costs between the Potrebics and the Pipolos, the motion judge adopted the Pipolos' suggested analysis. The motion judge followed the approach applied by the trial judge sitting without a jury in Mortimer v. Cameron (1994), 17 O.R. (3d) 1 (C.A.), and apportioned the Potrebics' and the Pipolos' liability for costs in accordance with his view of what would have been the apportionment of liability for the plaintiffs' damages after a trial. In taking this view, the motion judge relied on the opinion of plaintiffs' counsel submitted for the purposes of the settlement approval motion that there was a "significantly less than 50/50 chance" of any recovery against the Pipolos if the matter went to trial. He also relied on the expert report provided by the Pipolos to conclude that the Pipolos were not negligent in the configuration of their plaza and should not bear any responsibility for the plaintiffs' costs.

[30] The motion judge held that the Potrebics were solely responsible for the payment of costs to the plaintiffs.

[31] I now turn to address the issues of apportionment and quantum.

D. Analysis

(1) Apportionment of Liability and of Costs

[32] I begin by considering the motion judge's approach. In assessing the respective liability of the Potrebics and the Pipolos for the plaintiffs' damages, the motion judge noted that "the evidence is quite clear that the negligence of the Potrebic defendants caused the injuries in question. The liability of the Potrebic defendants is not in question."

[33] With respect to the Pipolos, however, the motion judge concluded that "there was little, if any, evidence before [him] on this hearing (or the record as a whole) to establish liability on the part of the Plaza defendants on the basis of [a very novel argument, that is, that the Plaza defendants should have installed bollards at the Lauzon Plaza]" and that "[i]n the absence of evidence before the court establishing that the Plaza [Pipolo] defendants were negligent in a manner that contributed to the injuries sustained to the plaintiffs, it is inappropriate to apportion to them any responsibility for the payment of costs of this matter."

[34] The motion judge accepted the plaintiffs' submission, supported by the Pipolos, that "the jurisprudence overwhelmingly supports the proposition that costs should be apportioned amongst defendants in the same proportion as their respective liability for damages." He cited the Mortimer case, Wright v. Wal-Mart Canada et al., 2010 ONSC 2936, and Gorman v. Falardeau, in support of that proposition.

[35] The Potrebics submit that the motion judge erred in undertaking an assessment of the respective liability of the Potrebics and the Pipolos for the plaintiffs' damages in order to apportion costs.

[36] I agree. The motion judge erred in principle by purporting to rely on the apportionment of liability as a general principle that must invariably be applied in fixing costs following a settlement of the issue of liability for damages, both as a matter of principle, and as a matter of procedure.

(a) The Motion Judge Erred in Principle

[37] The jurisprudence relied upon by the motion judge does not support the determination of the apportionment of liability for damages at a costs hearing. Mortimer does not stand for the general proposition that the apportionment of costs must always replicate the apportionment of liability for damages. In Mortimer, the question was whether the apportionment of costs between defendants should follow the apportionment of liability made following a trial. This court determined that the apportionment of costs should follow the apportionment of liability in that particular case but did not state, as a general rule, that it should be followed in all cases.

[38] Wright and Gorman also do not support the motion judge's position. In both cases, costs were apportioned between defendants following a trial on the merits. Moreover, in Wright, the court held that it would not be just in the circumstances to reduce the plaintiff's entitlement to costs by her five percent contribution to liability, meaning that costs were not strictly apportioned according to each parties' respective liability for damages: see para. 30.

[39] Indeed, the jurisprudence indicates that costs are not always apportioned in accordance with the co-defendants' respective liability with respect to damages. In Burns v. Hedge (2001), 146 O.A.C. 333 (C.A.), this court held that the motion judge who determined the relative and different obligations of three insurers funding the settlement of the plaintiffs' action, on the basis of the statutory minimum under the Insurance Act and the limits under the respective insurance policies, should have apportioned costs equally among them.

[40] More recently, in Gendron v. Thompson Fuels, 2018 ONSC 2079, 18 C.E.L.R. (4th) 178, at para. 38, the motion judge refused to apportion the plaintiff's costs on the same percentage basis as liability, observing that the apportionment of costs calls for a "more nuanced analysis." This court upheld his decision: 2019 ONCA 293, 56 C.C.L.T. (4th) 33, at para. 123, leave to appeal refused, [2019] S.C.C.A. No. 228.

(b) The Motion Judge Erred Procedurally

[41] The motion judge erred in fixing costs following the settlement of the action by carrying out an apportionment of the liability between the Potrebics and the Pipolos for the plaintiffs' damages, without a proper record and a trial on the merits.

[42] Permitting the adjudication of the parties' respective liability for damages following settlement would run contrary to the purpose of settlements and trial fairness. By their settlement, parties agree to resolve the issue of the parties' respective potential liability for the plaintiff's damages without a trial. It would therefore be inappropriate for the court to embark on "a full examination and adjudication of the merits of the parties' substantive claims and defences for the sole purpose of determining the question of costs": Waterloo North Condominium Corporation No. 161 v. Redmond, 2017 ONSC 1304, at para. 34.

[43] Still apposite after more than a century is the following passage from McLellan v. Powassan Lumber Co. (1914), 26 O.W.R. 323 (Ont. H.C.), at p. 324:

Costs are in truth incident to a determination of the rights of the parties and ought not to be made themselves the subject matter of the litigation. When the merits for any reason cannot be determined, there ought not to be a pretended investigation of the merits for the purpose of awarding costs.

[44] There are several practical reasons for this prohibition. A full paper proceeding based upon the affidavit evidence filed by the parties for the purposes of settlement will rarely allow a court to make a proper adjudication of the merits of an action. The requirement of oral evidence and cross-examination to resolve any controversies would transform a costs motion into the trial process that the parties expressly sought to avoid by their settlement. This inevitable result would undermine the principles of expediency, certainty and finality that promote settlement and the smooth operation of the administration of justice that encourages and depends on settlement.

[45] Returning to the present case, the parties agreed to resolve the issue of liability for the plaintiffs' damages by their settlement. The issue of the parties' respective liability for the plaintiffs' damages was therefore not before the motion judge on the costs motion. Moreover, the untested evidentiary record before the motion judge was inadequate, deficient and controversial for the purpose of determining liability for damages. At trial, the opinion of plaintiffs' counsel as to the merits of the plaintiffs' action would have been inadmissible evidence and the competing experts' opinions would necessarily have been subject to cross-examination and submissions by counsel.

[46] Accordingly, I would set aside the motion judge's apportionment of costs and his order that the Potrebics are solely liable for the plaintiffs' costs.

[47] In the circumstances of this case, the appropriate and fair apportionment of costs is that the Potrebics and the Pipolos contribute equally to and be held jointly and severally liable for the plaintiffs' costs. This is consistent with the fact that the Potrebics and the Pipolos contributed equally to the settlement. It was not unreasonable for the plaintiffs to pursue their claim against the Pipolos, which ultimately resulted in their contribution toward the settlement, but required extensive steps in the litigation. I would reject the Potrebics' argument that the Pipolos should be responsible for "a significantly greater percentage" of the costs because of the extensive litigation costs incurred after their 2007 settlement proposal. Although the Potrebics offered their policy limits at an early stage, their proposal was contingent on the plaintiffs' agreeing to limit their recovery to the $1 million policy limit. They did not pay the funds into court. Just as it was reasonable to continue the litigation against the Potrebics, it was also reasonable for the plaintiffs to pursue other avenues of recovery which, as the motion judge found, ultimately benefitted the Potrebics. I see nothing in the conduct of either side that would warrant diverging from the proportionate arrangement regarding damages that the parties accepted in the settlement.

[48] Consequently, the Potrebics should contribute 50 percent and the Pipolos 50 percent of the plaintiffs' costs.

(2) Amount of the Plaintiffs' Costs

[49] The Potrebics submit that the motion judge erred in awarding the plaintiffs $800,000 in fees on a partial indemnity basis. The Pipolos support and adopt the Potrebics' submissions. They raise five arguments based on: proportionality, the amount recovered, the reasonable expectations of the parties, the inclusion of the costs of the interlocutory motion, and the costs of the summary judgment motion brought by the Pipolos. I address each in turn.

(i) Proportionality

[50] First, the Potrebics argue that the amount awarded was grossly disproportionate based on the amounts assessed between the plaintiffs and their counsel and the recovery in the tort action alone. The motion judge determined that the plaintiffs' gross contingency fee payable to their counsel was $1,222,996.68, inclusive of HST. This amount included costs in relation to the tort action and the statutory accident benefits claim. With respect to the tort recovery, he assessed a 30 percent contingency fee of $853,447.68, inclusive of HST, based on the total amount of the settlement, including the amounts paid by the City of Windsor. He concluded that the plaintiffs were entitled to partial indemnity costs which he fixed at $800,000, inclusive of HST ($900,000 less the $100,000 contribution made by the City of Windsor) and net disbursements of $127,934.08 ($177,934.08 less the $50,000 contribution by the City of Windsor).

[51] The Potrebics submit that, as a result, the motion judge fixed the partial indemnity fees of the plaintiffs at an amount that effectively exceeded the full indemnity fees awarded to their counsel for the tort recovery. Moreover, when the net costs related solely to the tort action in the amount of $927,934.08 are compared to the net recovery of $2,117,544.77 from the tort action (excluding the City of Windsor's settlement contribution), the former represents approximately 44 percent of the latter. They argue that this is grossly disproportionate.

[52] I am not persuaded by these submissions.

[53] These submissions fail to recognize that the overarching consideration in fixing party and party costs is to arrive at an amount that is fair and reasonable for the losing party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at para. 26.

[54] The amount of fees that clients pay to their solicitors, while relevant, is not determinative of the reasonableness of the partial indemnity costs that a losing party is required to pay.

[55] The factors to be considered when assessing solicitor fees, including the reasonableness of a contingency fee, are not completely identical to those listed at r. 57.01(1) of the Rules of Civil Procedure. Most notably, while the risk assumed by the solicitor, including the risk of non payment, and the ability of the client to pay are relevant in assessing solicitor fees or the reasonableness of a contingency fee, these factors are not listed at r. 57.01(1): see Cohen v. Kealy (1985), 10 O.A.C. 344 (C.A.), at para. 11; Raphael Partners v. Lam (2002), 61 O.R. (3d) 417 (C.A.), at para. 50.

[56] Moreover, ss. 20 and 20.1 of the Solicitors Act, R.S.O. 1990, c. S.15, state that a contingency fee agreement should not impact a costs award. Specifically, s. 20(1) provides that a contingency fee agreement "does not affect the amount, or any right or remedy for the recovery, of any costs recoverable from the client by any other person". Section 20.1(1) specifies that "[i]n calculating the amount of costs for the purposes of making an award of costs, a court shall not reduce the amount of costs only because the client's solicitor is being compensated in accordance with a contingency fee agreement."

[57] Further, partial indemnity fees are not defined in terms of an exact percentage of full indemnity fees under the Rules of Civil Procedure. While representing a portion of full indemnity costs, that portion has never been defined with mathematical precision but generally amounts to a figure in the range of more than 50 percent but less than 100 percent. This is as it should be given the myriad factors that the court must consider in the exercise of its discretion in fixing costs.

[58] Here, the motion judge properly took into account "all of the factors under rule 57.01(1) and other relevant considerations" to arrive at the $800,000 figure, including grappling with the value of the plaintiffs' claim, to which I return below. His decision is entitled to a high degree of deference on appeal. I see no error in principle in the motion judge's decision as to the quantum of costs and this decision is not plainly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

(ii) Amount Recovered

[59] The second submission builds on the first. It is submitted that the motion judge erred in concluding that his assessment of partial indemnity costs in the tort action should be based not only on the recovery made in the tort action, but also on the sum of $3,007,903.97 recovered by the plaintiffs from their own insurer in relation to their respective statutory accident benefits claims. They reiterate that the motion judge should have restricted his analysis to the net amount recovered in the tort action and that the costs awarded were therefore grossly disproportionate to the settlement achieved.

[60] In my view, this submission depends on too narrow a reading of the motion judge's reasons. The motion judge was clearly responding to the Potrebics' submission at the costs motion that "the amount recovered as opposed to the amount claimed is 'the governing factor'" in fixing the plaintiffs' costs. He grappled with the large discrepancy between the undisputed value of the plaintiffs' claims and the restricted policy limits available for settlement. The motion judge properly determined that the amount recovered by the plaintiffs was only one of many factors that he was required to consider and that "a more nuanced approach" was necessary in order to properly apply the principle of proportionality in the circumstances of this case to arrive at an amount that "is fair and reasonable for the unsuccessful party to pay in the particular proceeding."

[61] In determining a fair and reasonable amount of costs, the motion judge considered the total amount recovered to be $5,525,448.74, being $2,517,544.77 recovered on the tort claim (including the City of Windsor's contribution) and $3,007,903.97 recovered on the statutory accident benefits claims. He found that the plaintiffs' success on their statutory accident benefits claims represented a direct benefit to the defendants. He concluded that even full indemnity costs of $1,222,996.68 represented 22.13 percent of that which was recovered and that this was not disproportionate.

[62] The motion judge's reliance on Moodie v. Greenaway Estate, [1997] O.J. No. 6525 (Gen. Div.), at para. 4, aff'd, 122 O.A.C. 90 (C.A.), seems misplaced. He adverted to it for the proposition that by reason of the releases available to a tortfeasor under the Insurance Act, R.S.O. 1990, c. I.8, only in compelling circumstances should the unsuccessful tortfeasor escape responsibility to indemnify a plaintiff for the costs of pursuing statutory accident benefits claims. Unlike the defendant in Moodie, the Potrebics and the Pipolos are not entitled under s. 256(3) of the Insurance Act [2] to have the amount of the plaintiffs' statutory accident benefits settlement taken into account to reduce the settlement amounts payable in the tort action.

[63] While the motion judge's reference to Moodie is not exactly clear, his determination that the Potrebics and the Pipolos received a benefit from the statutory accident benefits claims settlement is reasonable in that it facilitated the plaintiffs' agreement to the settlement in the tort action within the Potrebics' and the Pipolos' policy limits.

[64] The fixing of costs is not a bookkeeping exercise. The fact that the net costs award represents about 44 percent of the net recovery of $2,117,544.77 recovered on the tort claim is not the determining factor in the consideration of the principle of proportionality. While the consideration of proportionality is necessary to the soundness of any costs award and to ensure the health of the justice system, the overarching consideration is that the order for costs must be fair and reasonable. Making that assessment is more of an art than an exact science. See Marcus v. Cochrane, 2014 ONCA 207, 317 O.A.C. 251, at paras. 15-16. In consequence, an overemphasis on proportionality to the detriment of the other equally relevant factors "ignores the principles of indemnity and access to justice", especially in proceedings where the legitimate claims of clearly wronged plaintiffs are being pursued: Gardiner v. MacDonald, 2016 ONSC 2770, at para. 65, aff'd 2016 ONCA 968, 63 C.C.L.I. (5th) 212.

[65] As already noted, the motion judge quite properly did not limit his analysis to the one factor urged by the Potrebics. The motion judge's determination that the fixed fees were reasonable was open to him. I see no basis to intervene.

(iii) Reasonable Expectations of the Parties

[66] Third, it is submitted that the motion judge failed to consider, as reflecting the reasonable expectations of the parties, the example of $250,000 in costs on a $2 million settlement set out in the plaintiffs' contingency fee agreement.

[67] This submission is without merit.

[68] I refer again to the provisions of ss. 20 and 20.1 of the Solicitors Act that a contingency fee agreement should not impact a costs award. As the motion judge noted, reasonably in my view, the example of a possible cost recovery used by the plaintiffs' solicitors in the contingency fee agreement does not serve to establish the amount of costs that a court would determine is fair and reasonable in all the circumstances. That determination is subject to the many different factors considered by the motion judge.

(iv) Inclusion of the Costs of the Interlocutory Motions

[69] Fourth, the Pipolos and the Potrebics argue that the motion judge erred in including in the costs award amounts for interlocutory motions for which costs had been fixed by other court orders at a net sum payable to the plaintiffs.

[70] I would not accept this submission. In my view, this court is effectively being asked to undertake a line by line review of the motion judge's fixing of costs, which is not our task. As I have already observed, and the Potrebics acknowledged at para. 53 of their factum, the fixing of costs does not begin or