Court File and Parties
COURT FILE NO.: 11-50983 DATE: 2016/05/19 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
BARBARA LYNN CARROLL by her Litigation Guardian SHANNON LUKNOWSKY, SHANNON LUKNOWSKY, JEFFREY CARROLL and SHANNON LUKNOWSKY as Executor for the Estate of LORNE CARROLL Plaintiffs – and – ROBERT MCEWEN, CAROLE MCEWEN, AVIVA CANADA INC. and PILOT INSURANCE COMPANY Defendants
Counsel: Elizabeth A. Quigley, Joseph Obagi, for the Plaintiffs Kevin P. Nearing, Erin H. Durant for the Defendants, Robert McEwen and Caroline McEwen Stephanie Neate, for the Defendants, Aviva Canada Inc. and Pilot Insurance Company
HEARD: March 8, 2016
Reasons to a Costs Award and Ancillary Matters Dealing from a Jury Verdict
Mclean J.
[1] Sometimes interpretation of costs in a jury verdict can be more complicated than the trial itself. This is such a case. On October 30, 2015 after a lengthy trial, the jury gave a verdict in the form of the answers to certain questions that are shown as Appendix A to these reasons. To summarize the verdict, the liability was split 62/38 between the Plaintiffs and the Defendants. The jury assessed Barbara Lynn Carroll’s pain and suffering in the amount of $300,000. There is no future income loss and the jury awarded future care costs as a result of the injuries sustained in the accident in the amount of $3,600,000.00. They also awarded family law damages to the children of Lorne Carroll in the amount of $43,000.
[2] In summary the issues before the Court are as follows:
(1) Are the Defendants entitled to an assignment of the accident benefits? (2) What is the effect of the bankruptcy order that was made well prior to the commencement of the trial on the judgment? (3) What is the effect of the change of interest rates on non-pecuniary loss claims, or the change to the deductibility of amounts on the claim of the Estate of Lorne Carroll? (4) What are the costs to be awarded?
Assignment of Accident Benefits
[3] The Plaintiffs argue that accident benefits are not assignable. The Defendants argue that in the normal course under the Insurance Act, R.S.O. 1990, c. I.8, assignments should be granted as to the benefits. I note that in s. 224 of the Insurance Act, the first section of Part VI, health care is defined in precise terms used in ss. 267.8(9) and (12) as follows:
“health care” includes all goods and services for which payment is provided by the Statutory Accident Benefits Schedule; (“soins de santé”)
[4] Those later sections simply state that in certain situations a trust can be placed upon such payments, or in the instant case a request can be made for an assignment of those benefits. The Plaintiffs argue that no such assignment should be made. They cited the cases of Mikolic v. Tanguay, 2015 ONSC 71 (Div. Ct.) and Gilbert v. South, 2015 ONCA 712, 127 O.R. (3d) 526, at paras. 44-47, which is quoted here:
- In short, the insurer can only obtain an assignment of a plaintiff’s future no fault or collateral benefits if:
- The jury’s award mirrors the collateral benefit sought to be assigned. In the words of Finlayson J.A. in Bannon v. Hagerman Estate (1998), 38 O.R. (3d) 659 (Ont. C.A.), at p. 679: “I believe that, where possible, any no-fault benefit deducted from a tort award under s. 267(1)(a) must be deducted from a head of damage or type of loss akin to that for which the no-fault benefits were intended to compensate. In other words, and employing the comparison of Morden J. in Cox, supra, if at all possible, apples should be deducted from apples, and oranges from oranges.”
- And, there is no uncertainty about the plaintiff’s entitlement to these collateral benefits. As Goudge J.A. said in Chrappa v. Ohm (1998), 38 O.R. (3d) 651 (Ont. C.A.), at p. 657: “If there were uncertainty about the receipt of those future payments the deduction of their present value would expose the plaintiff to the possibility of an ultimate recovery less than that awarded to him.”
- York Fire cannot meet these requirements. It did not raise Gilbert’s accident benefits entitlement during the trial. It led no evidence from a future care cost expert. And it led no evidence of the present value of Gilbert’s claimed future care costs. Thus, the record left the trial judge with considerable uncertainty whether Gilbert’s entitlement to accident benefits mirrored the jury’s award for future care costs.
- As the trial judge pointed out, this uncertainty had both a timing and a qualitative aspect. On timing, for example, as Gilbert did not claim to be catastrophically impaired, his entitlement to medical and rehabilitation benefits under his accident benefits policy could not extend beyond the earlier of the receipt of benefits totalling $100,000 or ten years from the date of the accident (April 2020). Yet, in awarding damages for medical and rehabilitation benefits, the jury was not asked to differentiate between future medical and rehabilitation expenses during the ten-year period Gilbert would be entitled to accident benefits and those expenses outside the ten-year period.
- Qualitatively, the jury was simply asked to make a global award for future care costs, not to allocate damages to particular items of future care. Thus, although some overlap might be likely, the trial judge could not determine what amount of damages for future care costs would overlap with items of Gilbert’s future treatment covered under his statutory accident benefits policy.
[5] This indeed seems to be the current test for deductibility. In the decision of Mikolic v. Tanguay, the Divisional Court points out at para. 31 that the language of the statute is different from the language in the case of Bannon v. Hagerman Estate (1998), 38 O.R. (3d) 659 (C.A.). At para. 32 the Divisional Court notes that the specific wording of ss. 267.8(1) and (4), “require the court to carry out at least a limited matching when determining the deductibility to statutory benefits”. The Divisional Court also notes at para. 43:
In the case at bar, as the Settlement Disclosure Notice makes clear, the Plaintiff accepted an offer of $77,500 for past and future income replacement benefits. In all of the circumstances here, it cannot be fairly said that this portion of the settlement was a compromise in respect of anything other than statutory income replacement benefits, past and future. Thus, the $77,500 pursuant to the settlement came within the wording of s. 267.8(1).
[6] The Court notes that the factual situation before it is substantially different from the factual situation in Gilbert v. South. Here the jury verdict was similar to Gilbert v. South with regard to the $3,600,000.00 award. However, it was clear at the trial that the only major damage issue was the cost of future care. Unlike in Gilbert v. South, there was substantial evidence with regard to the cost of future care. There was the lengthy evidence of Ms. Bierbrier and Ms. Valone, as well as the lengthy evidence with respect to the caregivers themselves, the plans of care that were put forward and the costs of the plans of care. Only within the ranges given by that evidence can the figure of $3,600,000.00 be found.
[7] In addition to the evidence at trial, there was affidavit material filed with regard to the present value of the accident benefits vis à vis the offers to settle. This consisted of the affidavit material of Ms. Larouche and Mr. Principe. Not only was there affidavit material filed, but cross-examinations also took place on the affidavits. There were arguments made with respect to the nature of the analysis and the various mistakes that Ms. Larouche had made. However, notwithstanding the mistakes, the affidavit material of Ms. Larouche provided substantial evidence with regard to the nature of the future care plan and indirectly its matching with the jury’s award.
[8] It is also argued by the Plaintiffs that no assignment should take place because payment of the judgment is unlikely. This argument is based on the fact that the McEwens entered into bankruptcy and were discharged prior to trial. Indeed, the order that will be dealt with in more detail later indicates that the exposure of the McEwens is limited to the limits on the insurance policies they have. There is also other insurance available; however, it is also subject to policy limits. The Plaintiffs were well aware of this situation before the trial commenced and were well aware of the risks of litigation. Thus their argument with regard to the fact that the judgment may not be paid in full is not persuasive.
[9] When we consider both the evidence at trial and the evidence adduced on this costs hearing, it is the Court’s view that the jury’s verdict is akin to health benefits as defined above. It is without denial that the major part of this trial, aside from the issue of liability, focussed on health care benefits in the nature of future care benefits that would be necessary to improve or at least to maintain Ms. Carroll’s current condition. Not only were there costs of future care plans given on both sides, but as stated earlier, there is substantial evidence as to the nature and need for future care. There is also the evidence of the caregivers and occupational therapist Nancy McFadyen. All this evidence fits the health care definition.
[10] There was a concern with the Court of Appeal with respect to the ability to receive future benefits. Clearly Ms. Carroll suffers from a catastrophic injury. There is little doubt that the whole amount of accident benefits will be received. This issue was also clearly before the jury because of all of the medical and other evidence called with respect to her condition, life expectancy and the need for increased intervention to maintain her current achievements. When we consider all the evidence at trial, and indeed the further evidence with respect to this matter now placed before the Court, the Court is satisfied within the wording of Gilbert v. South that a very strict onus of proof has been made out and that based on that evidence it is patently clear that the preconditions for an appropriate assignment have been made out.
[11] In addition, it would seem that on the basis of the actuarial and accounting evidence given, there is really no doubt that based on their assumptions all these benefits will indeed be paid. This is based on the fact that they have used actuarial calculations as to mortality to estimate the present value of these payments. Therefore, for those reasons, an assignment of accident benefits will be ordered.
[12] After the hearing of this motion the Court also received a copy of the decision of the Court of Appeal in Basandra v. Sforza, 2016 ONCA 251. This decision provides further support for the decision I made that the assignment of benefits should be granted.
The Effect of the Bankruptcy
[13] On October 12, 2012 the Registrar in Bankruptcy in Ottawa gave an order declaring the McEwens bankrupt. Subsequently they obtained a discharge. The Plaintiffs’ position is that the Bankruptcy Order has no relevance to the judgment. They cite s. 145 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3:
Nothing in this Act affects the right afforded by provincial statute of any person who has a claim against the bankrupt for damages on account of injury to or death of any person, or injury to property, occasioned by a motor vehicle, or on account of injury to property being carried in or on a motor vehicle, to have the proceeds of any liability insurance policy applied in or toward the satisfaction of the claim.
[14] That is trite law and there is no issue with it. The issue however is the bankruptcy and the effect of the bankruptcy on the judgments against the McEwens personally. It is argued by the Defendants that the order and discharge supersedes any other order that could be given by this Court. The Defendants cite s. 178(1) and (a.1) of the Bankruptcy and Insolvency Act, which provides that:
178 (1) An order of discharge does not release the bankrupt from (a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail; (a.1) any award of damages by a court in civil proceedings in respect of (i) bodily harm intentionally inflicted, or sexual assault, or (ii) wrongful death resulting therefrom;
[15] The Defendants also cite the Nova Scotia Court of Appeal decision in Buchanan v. Superline Fuels Inc., 2007 NSCA 68, 255 N.S.R. (2d) 286, and further the decision in 407 ETR Concession Company v. Canada (Superintendent of Bankruptcy), 2015 SCC 52, [2015] 3 S.C.R. 397, at para. 24:
In my view, the respondent is correct on this issue of operational conflict. Pursuant to s. 178(2) of the BIA, creditors cease to be able to enforce their provable claims upon the bankrupt’s discharge: Schreyer v. Schreyer, 2011 SCC 35, [2011] 2 S.C.R. 605 (S.C.C.), at para. 21. As I indicate in the companion appeal, it is undisputed that a discharge under s. 178 of the BIA releases a debtor, thus preventing creditors from enforcing claims that are provable in bankruptcy. They are deemed to give up their right to enforce those claims. This includes both civil and administrative enforcement.
[16] It is the clear effect of the Bankruptcy Order that the McEwens’ exposure is limited to their policy limits. It is clear to this Court therefore that the judgment of the jury against the McEwens must be restricted to the amount of their liability and the jury verdict will be subject to the proviso that it is limited in its enforceability to the amount of insurance otherwise payable.
Pre-Judgment Interest Rate on Non-Pecuniary Damages
[17] This argument centres around the change in the Insurance Act as effective January 1, 2015 and specifically s. 258.3(8.1) which reads as follows:
(8.1) Subsection 128 (2) of the Courts of Justice Act does not apply in respect of the calculation of prejudgment interest for damages for non-pecuniary loss in an action referred to in subsection (8).
[18] The issue depends upon the arguments made as to whether this particular amendment was retrospective or not. On a factual basis it is clear that the date of the accident well preceded the passage date. There are various decisions on this issue and to date there is no authority from the Court of Appeal with respect to the effect of this amendment on non-pecuniary damages. In the matter of Cirillo v. Rizzo, 2015 ONSC 2440, 48 C.C.L.I. (5th) 134, Mr. Justice MacKenzie found that this amendment was in fact retrospective and therefore the interest rate on non-pecuniary damages in the case before him should be reduced to 1.3%. In El-Khodr v. Lackie, 2015 ONSC 4766, 79 C.P.C. (7th) 322, Madam Justice Toscano Roccamo held that the amendment was not retrospective. In other cases the trend seemingly is that the amendment was not retrospective.
[19] There have been arguments made that since interest is not available until an award from the court is made, whether the amendment is retrospective is irrelevant. The matter really centers on the interpretation of the statutory amendment. It seems that the right of interest would arise when the tort occurred. It would also seem that the rate of interest would be a substantial matter not an adjectival matter. It is a rate given by statute and the stature amendment does not speak to its commencement date. It therefore seems that the amendment is not retrospective and therefore the interest rate on non-pecuniary damages in this matter would be 5%.
The Applicable Deductibility for the Estate of Lorne Carroll’s Family Law Claim
[20] This aspect of the matter also centers on an amendment under the Insurance Act, namely O. Reg. 461/96 (“Regulation 461”). The Defendants argue that the increased deductible applies to settlements and judgments on or after August 1, 2015. The Regulation provides that the applicable amendments for Family Law Claims under $50,000 are $18,270.00. Here again it would seem that the jurisprudence is divergent.
[21] However, after the argument of this motion on April 18, 2016, counsel presented the Court with a recent case on this issue. It is the decision of Mr. Justice Hackland in Corbett v. Odorico, 2016 ONSC 1964. In that decision Hackland J. considered the jurisprudence on this point and preferred the Reasons of James J. in Vickers v. Palacious, 2015 ONSC 7647. In paras. 18 and 19, Hackland J. deals with the matter as follows:
I am aware of the decision of Belch J. in Cobb v. Long Estate, 2015 ONSC 6799 in which it is stated that the court ought to follow the decision of Toscano Roccamo J. in El-Khodr v. Lackie, 2015 ONSC 4766 “which set the deductible at $30,000” (see para. 13). Respectfully, the court in El-Khodr did not address the deductible-restrospectivity issue and instead held that the January 1, 2015 amendment to the provisions dealing with the pre-judgment interest was properly characterized as substantive and not procedural in nature, based on the court’s interpretation of the Court of Appeal decision in Somers v. Fournier, [2002] O.J. No. 2543 (C.A.). If Belch J. was saying that the increase in the deductible is a matter of substantive law that cannot apply retrospectively, I would disagree.
Applying the new statutory deductible of $36,540 to the jury verdict of $33,000 for general damages results in a nil recovery. Similarly, the new statutory deductible for FLA damages (as would the previous deductible), reduces the FLA award for the husband and children to a nil recovery.
[22] His decision is based on para. 18 of Mr. Justice James’ decision in Vickers v. Palacious, wherein Justice James states:
To summarize, I find the legislative intention to be clear; the revised deductible is to apply to all pending actions. The plaintiffs did not have vested legal rights that were interfered with; they had a claim that had not gone to trial and in respect of which there had been no award or other disposition when the new deductible was enacted. Alternatively, if it is necessary to resort to presumptions or interpretive aids, I find that the deductible issue is a matter of procedural law and ought to be presumed to apply to this action.
[23] I find this line of reasoning persuasive, as it deals squarely with the appropriate test on the issue of deductibility. For those reasons the new statutory deductibility scheme can be applied to the award of the Carroll Estate. Therefore, the jury award will be reduced by the legislative amendments.
Costs and their Quantum
[24] There are substantial materials filed on this very issue. The Court notes that there is no binding Rule 49 offer which would be dispositive of costs. Various offers however were made. The issue raised was as to the efficacy of these offers and whether the jury verdict itself was above or below the value of these offers.
[25] It is the Plaintiffs’ position that they should have the costs as set forth in the costs materials filed, in the amount of $795,616.09. The particulars are found in Form 57B that is filed with the materials.
[26] It is the Defendants’ position that these costs should be reduced substantially or that no costs should be awarded as the effect of proceeding to trial really occasioned no holistic benefit to the Plaintiffs. The Defendants argue that there is only one Rule 49 offer and that it was a joint Defendants’ offer dated August 27, 2015 to settle all of the Plaintiffs’ claims for a total of $1,750,000.00, inclusive of the interest plus costs to be agreed upon or decided by an assessor, or in the alternative $2,000,000.00 inclusive of all damages, interest and costs. It appears factually that this offer was beaten by the jury verdict.
[27] The Defendants however argued that, as stated, the McEwens declared bankruptcy in 2012 and therefore their exposure was limited to insurance available. The Court also notes the continuation order made by the Registrar in Bankruptcy which allowed for this claim to proceed on the basis that the Defendants’ liability be restricted to the personal amount of insurance otherwise available. Thus, the Plaintiffs cannot proceed further against the McEwens once these amounts are paid under the insurance policy. The Defendant Aviva’s exposure under the Family Protection Endorsement was $1,000,000.00. It is argued that the Defendants’ joint offer dated August 27, 2015 was virtually all of the money that was available to the Plaintiffs except for the potential exposure to the Plaintiffs’ costs, etc.
[28] It was also argued that, and it is not denied that there is no Rule 49 offer by the Plaintiffs. The Plaintiffs made various offers from $1,856,280.00 to $1,950,000.00 plus fees and disbursements. These stipulated that there be no assignment of collateral benefits. At the start of the trial Ms. Carroll had benefits available to her in the amount of $988,955.00, as she had already received $650,167.00 for medical and rehabilitation benefits, as well as $360,978.00 for attendant care.
[29] The Defendants made a further offer dated September 11, 2015 to settle the Plaintiffs’ claim for $2,150,000.00 inclusive of all damages, prejudgment interest and costs. The offer did not request any assignment of the future care and cost.
[30] It was argued therefore that on September 11, 2015, the total potential for this offer was $3,138,955.00. Between the first date of this hearing on November 12, 2015 on this aspect of the matter and today’s date, apparently further accounting and actuarial reports were filed dealing with the nature of the amounts available. The result was that the collateral benefits evaluations ranged from $599,000 on the Plaintiffs’ behalf to the Defendants’ range of $750,000 to $830,000 depending on the mortality calculations. It is argued therefore that by accepting that offer the Plaintiffs would have been substantially better off.
[31] The Plaintiffs on the other hand argue that these offers were exceeded by the jury verdict by approximately $2,600,000.00. Thus an order for costs should flow.
[32] Lengthy argument was also made as to the Plaintiffs’ behaviour at trial.
[33] Immediately after the September 11, 2015 offer of $2,150,000.00, which was “accepted”, a further statement of claim was issued against Aviva seeking $2,000,000.00 in damages in breach of good faith. This was served on Aviva though it was not served on the McEwen Defendants nor were they advised of it.
[34] When we consider the prior offers, it is clear that they were made on the basis of settling all the outstanding matters between these parties. The Plaintiffs state that this was not the case. However, when we consider the record before us, it is without doubt that all these offers were made on the basis that everything would be settled between these parties and this would end all litigation.
[35] The matter becomes even more curious after that. When these offers went forward the jury had already been picked and the Court put the matter on hold for this settlement to be “effective”, though at that point the Court had no idea what was going on except for the fact that both parties had consented to the hiatus.
[36] Apparently then, the Plaintiffs brought a motion before Mr. Justice Hackland to enforce the “settlement”. Other counsel were retained to argue it and Mr. Justice Hackland’s Reasons are part of the record before us. They are interesting to read. It was argued by the Plaintiffs that they did not intend to settle all the matters and that the problem before them was that the offer did not comprehend settling the mala fide claim against the Insurance Company. However, this Court finds that that is not the case and that all parties did or should have understood that that offer was made on the basis that it would deal with everything outstanding, including a mala fide claim.
[37] The Court will not make comment on the behaviour of counsel in that they accepted an offer and then went on to issue another claim outside the offer. They have made many arguments about how this would be allowable under the rules and how various settlements would affect only the matter in which the offer was made and require a release. However, on these particular facts it is the Court’s view that the Plaintiffs were clearly aware of what they were doing and that they were in fact taking the Defendants by surprise. Mr. Justice Hackland seemed to be of the same view when he discussed the issue of “sharp practice” in his Reasons. Clearly when one looks at the nature of the various offers that were made, it is without question that the situation before all parties was that the offers were made on the basis of settlement of all matters. The matter before Mr. Justice Hackland was withdrawn and the costs were left to this Court to determine.
[38] It is plain on these facts that no one looking at this situation objectively would be under any impression that the Defendants thought that these claims would be bifurcated when the offer was made. Indeed, the offer was made by the Insurance Company, which would be a party to the mala fide claim. Therefore, a simple release may have indeed affected that claim.
[39] It is also put before the Court that there was an order of Master MacLeod dealing with the scheduling of expert reports, examinations etc.
[40] This said, it is also argued that on the basis of the Case Management Order of Master MacLeod dated May 26, 2014, various schedules were in place. In some, all expert reports were to be served at trial 90 days in advance of a pre-trial set for June 17, 2015. This did not happen.
[41] The accident reconstruction report by the Plaintiffs’ engineer was delivered on June 9, 2015. The future care report by Ms. Carol Bierbrier was served on August 18, 2015. When the Court considers Ms. Bierbrier’s report, it was not an update but was in fact a new plan contemplating more vigorous therapy for Ms. Carroll. It was indeed more of a rebuttal of Ms. Valone’s report, which is the report of the Defendants’ expert. When we consider the correspondence, it seems that the impression was given prior to the pre-trial that the Plaintiffs’ needs had not changed substantially and therefore, there would be no necessity of a report until after the pre-trial. This was clearly not the case when we consider the reports as filed at trial.
[42] At trial, the Court noted that an adjournment was necessary for an examination of the Plaintiff. It is clear from the correspondence that this could not take place earlier, as it was indicated to the Defendants’ counsel that the Plaintiff herself would not be called as she could not give useful evidence. Once the trial started, or was close to being started, that position changed and an adjournment was necessary to allow for her examination. It is the view of the Court when we consider the whole of these matters that the Plaintiffs did not abide by the Case Management Order of Master MacLeod.
[43] The reports were late and the new reports were changed and in fact gave new information which certainly made matters more expensive and required further consideration of their position by the Defendants. Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, clearly sets out the factors that the Court must consider regarding the assessments of costs as follows:
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, (0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer; (0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed; (a) the amount claimed and the amount recovered in the proceeding; (b) the apportionment of liability; (c) the complexity of the proceeding; (d) the importance of the issues; (e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (f) whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution; (g) a party’s denial of or refusal to admit anything that should have been admitted; (h) whether it is appropriate to award any costs or more than one set of costs where a party, (i) commenced separate proceedings for claims that should have been made in one proceeding, or (ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and (i) any other matter relevant to the question of costs.
[44] When we consider the Bill of Costs itself, the quantum of costs seems high given the actual results obtained. It is quite concerning to the Court that some of the time billed dealt with matters that could well have been dealt with prior to trial in a much more expeditious basis.
[45] Certainly we must also consider the conduct of the parties in this matter. Did they tend to shorten or lengthen the duration of the proceedings? Clearly, the behaviour of the Plaintiffs did extend the proceedings. For example: further discoveries occurred in the middle of the trial. This was due to the fact that Plaintiffs’ counsel indicated before the trial that they did not wish to call the plaintiff herself and after the commencement of the trial the Plaintiffs changed their mind. There was also the motion before Mr. Justice Hackland having to do with an offer to settle. In this Court’s view this motion was bound to fail and delayed the matter considerably. It also caused inconvenience to the jury. The Court also considers the efficacy of the trial itself. It would seem when matters are considered in a technical sense that the offers made were exceeded at least on their face by the jury’s verdict. However, when one considers the matter at a less superficial level, it seems that the verdict’s benefit to the Plaintiffs is not substantially over the offers themselves as these offers really comprised the funds available.
[46] This is based on the fact that damages are limited with respect to the bankruptcy of the McEwens and the CF44 endorsement that restricts the liability of Aviva. The offers must also be considered in the light of the fact that the assignment of the accident benefits have been dealt with earlier in these reasons. The Plaintiffs were aware throughout the trial of the potential assignment. This is clear from the nature of the offers that went back and forth between the parties and the lengthy argument that occurred before the Court on this particular issue.
[47] The Court is particularly concerned with respect to the fact that the Order of the Case Management Master was essentially given lip service and with respect to the fact that an offer was accepted in good faith and then shortly after the basis for the order was ignored by issuing another process.
[48] Clearly the Court is interested in making sure that bona fide offers are treated in a bona fide manner. It helps little that a bona fide offer is made and that a party who knows or ought to know that the basis of that offer is the settlement of all issues then turns around and without notice to all parties begins another proceeding. This is not something that this Court can countenance without sanction. If such behaviour was not sanctioned, then it would in this Court’s view cause great difficulty with regard to obtaining settlements themselves. It would unduly lengthen the settlement process because the party making the offer would always be concerned about whether it would in fact put an end to all the litigation or whether, due to nature of the entente between the parties, it would just be an intermediate step in another proceeding.
[49] It is so very concerning that notwithstanding this, an attempt would be made to enforce what was essentially a non-enforceable offer. Its unenforceability was caused by the fact that the party who accepted the offer intended to change the rules of the game immediately after the offer’s acceptance. This was essentially a trick.
[50] Taking these matters into account, the Court therefore will deal with costs as follows. The Plaintiffs have asked for costs in the amount of $795,616.09. The Court considers the dictates in Rule 57, and particularly the fact that in this Court’s view, the benefits to the Plaintiffs of proceeding with the trial in the face of the offer that was made were slight. The fairness of the offer can be found in the fact that the Plaintiffs accepted it and then attempted to enforce the offer by a court order. This was later, of course, affected by the Plaintiffs’ plan to commence the other action against Aviva. We also have to consider that lip service was paid to the Case Management Master’s Order. In addition, we must consider the Plaintiffs’ attempt at proceeding with the matter of the mala fide claim notwithstanding their acceptance of the Defendants’ offer. The Plaintiffs did so despite being well aware that the offer which they attempted to enforce was made on the clear basis that it was to settle all outstanding claims between the parties. Moreover, we must consider their attempt to enforce this proposed settlement before Hackland J. and his Reasons which are part of this record.
[51] Therefore, when the matter is considered as a whole, costs will be awarded to the Plaintiffs in the amount of $375,000.
[52] To summarize therefore, orders will go as follows: (1) There will be an assignment of accident benefits. (2) The personal liability for the Defendants is restricted to amounts under policies of insurance otherwise payable. (3) The pre-judgment interest rate on non-pecuniary damages is not affected by the amendments. (4) Deductibility of the Family Law claim of the Carroll Estate is reduced by the legislative amendments which for Family Law Claims under $50,000 is $18,270.00. (5) Costs to the Plaintiffs fixed in the amount of $375,000.
[53] As the results were mixed there will be no costs of this hearing.
Mr. Justice Hugh R. McLean
