Court File and Parties
COURT FILE NO: CV-13-481825 DATE: 20180829 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: RODERICK MACLEOD, Plaintiff and WILLIAM HODGSON MARSHALL, THE BASILIAN FATHERS OF TORONTO, THE SUDBURY CATHOLIC DISTRICT SCHOOL BOARD and THE ROMAN CATHOLIC EPISCOPAL CORPORATION OF THE DIOCESE OF SAULT STE. MARIE, Defendants
BEFORE: GANS J.
COUNSEL: Robert P.M. Talach and Aaron D. Lealess, for the Plaintiff Susan A. Metzler and Chris T. Blom, for the Defendants
HEARD: By Written Submissions
Costs ENDORSEMENT
Introduction
[1] I am tasked with fixing costs and prejudgment interest as part of an almost three-week jury trial conducted this past April. The jury award was beyond everyone’s expectations and clearly eclipsed the offers to settle that were extant on the eve of trial.
[2] The breakdown of the jury verdict was as follows:
General Damages $350,000.00 Aggravated Damages $75,000.00 Lump Sum Economic Loss $1,588,781.00 Special Damages $56,400.00 Punitive Damages $500,000.00 Total $2,570,181.00
[3] The defendant, the Basilian Fathers, have appealed but part of the jury verdict, namely the award in respect of the ‘income loss’ and punitive damages. They have paid the plaintiff that portion of the judgment that speaks to general, aggravated, and special damages in the aggregate amount of $484,400.
[4] That being said, before reading the written arguments of both sides, I would have thought that experienced counsel, such as those who appeared before me, would have been able to resolve the costs and interest to which the plaintiff is entitled, regardless of the outcome of this matter in the Court of Appeal.
[5] However, there are a few issues surrounding an award of costs, if not the fixing of an amount for prejudgment interest, in the instant case that warrant comment.
Pre-offer Substantial Indemnity
[6] There is no issue between the parties that the plaintiff is entitled to his substantial indemnity costs from and after March 26th, 2018, which covers the time ramping up to the trial and the trial proper. The defendant does take issue, however, with the quantum being claimed, both in terms of the hourly rate and the amount of time expended by counsel, matters upon which I will comment below.
[7] The plaintiff argues that he is entitled to his costs throughout by operation of section 4(6) of the Victims’ Bill of Rights, 1995, S.O. 1995, c. 6, which states that “[a] judge who makes an order for costs in favour of a victim shall make the order on a solicitor and client basis, unless the judge considers that to do so would not be in the interest of justice” [Emphasis added].
[8] It is the plaintiff’s position that the above section, which is mandatory, covers, prima facie, the instant action, with which proposition I do not take issue. The defendant argues, however, that the circumstances of the case warrants the exercise of my discretion to award costs prior to the date of the offer on a partial indemnity basis “in the interests of justice”.
[9] The preamble of the Victims’ Bill of Rights sets out its statutory objective:
The people of Ontario believe that victims of crime, who have suffered harm and whose rights and security have been violated by crime, should be treated with compassion and fairness. The people of Ontario further believe that the justice system should operate in a manner that does not increase the suffering of victims of crime and that does not discourage victims of crime from participating in the justice process.
[10] This proposition has formed the corner stone for decisions of various of my colleagues in other instances, both in respect of cases where the defendant was convicted of the offence of sexual assault (T.(K.) v. Vranich, 2011 ONSC 683 at paras. 127-30) and where there was no trial and subsequent conviction or incarceration (Milne v. Betts, 2012 ONSC 5565).
[11] Indeed, Emery J. in Doran v. Melhado, 2016 ONSC 2010 awarded substantial indemnity costs despite taking into consideration an argument based on the considerations of the proportionality principle under Rule 104(1.1), finding that “[w]here Section 4(6) of the Act applies, a costs award that enhances access to justice trumps proportionality under the Rules” (para. 57).
[12] The defendant argues that the Victims’ Bill of Rights does not create an absolute entitlement to costs on a substantial indemnity basis. Relying on Firestone J.’s decision in Radmanish v. Sulaimankhail, 2014 ONSC 6494, it argues that the Basilian Fathers’ admission of vicarious liability early on in the proceedings warrants the exercise of a discretion. Respectfully, the facts of the decision of Firestone J. cited above are markedly different to those of the instant case.
[13] Furthermore, substantial indemnity costs have been awarded to victims of sexual assault without reference to the Victims’ Bill of Rights. In the costs decision of Doe v. O’Dell (14 November 2003), 01-CV-212060CM (Ont. Sup. Ct.), Swinton J., after a detailed analysis of decades old case law, awarded substantial indemnity costs on the basis that a “person held liable on the basis of vicarious liability is deemed to be a joint tortfeasor with the individual who committed the tortious act” (at para. 5, citing Q. v. Minto Management Ltd. (1985), 49 O.R. 2d 531 (H.C.J.)) and must bear the responsibility of the reprehensible conduct of the clergy defendant.
[14] I endorse the last stated proposition.
[15] Notwithstanding the ‘limited’ admission of vicarious liability contained in the Statement of Defence, and the admissions made on the eve of trial in respect of Marshall’s sexual assault of the plaintiff, if not the award of punitive damages, I see no reason in the circumstances of the instant case to deprive the plaintiff of his entitlement to costs throughout on a substantial indemnity basis, at law or by statute.
Rule 57 Factors
[16] When assessing costs, even costs set on a substantial indemnity basis, the Court must nevertheless consider the factors enumerated under Rule 57, including the time spent, the results achieved, and the complexity of the matter, as well as the application of the principle of proportionality: Rule 1.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[17] In addition, I have taken into account the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (Ont. C.A.), specifically, that the overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant.
[18] In my view there are several factors that militate against the level of recovery propounded by the plaintiff, including, the hourly rate sought, the number of hours spent by the Beckett firm lawyers and paralegals at the various stages of the proceedings, and the issues attendant to this brief.
[19] As the defendant has correctly noted, this case is one of many for which plaintiff’s counsel had been retained. While no doubt the impact on the individual plaintiffs is unique and devastating, there is regrettably a sameness to the sordid tale of cleric abuse such that the complexity of the issues is, or should have been, well known to and anticipated by counsel.
[20] Hence, in my view, the preparatory work from the initial retainer, through discoveries, and to trial, including the engagement of the requisite experts, while not ‘cookie’ cutter, does not create a huge learning curve for senior counsel nor warrant the number of assistants used throughout this case. I think it would be manifestly unfair for the costs in respect of this somewhat ‘heavy handed’ process to be visited on the Basilian Fathers.
[21] On the other hand, this defendant has suggested that I engage in a parsing of the plaintiff’s proposed bill of costs, which I don’t propose to do. Instead, I will examine the proposed costs at 3,000 feet. In that respect, I would observe, however, that but for the duplication of work product in certain areas, which I have endeavoured to back out, I do not agree with the defendant that a mock trial is, by definition, an unnecessary preparatory step. This preparation contributed to the manner in which the plaintiff testified, which undoubtedly was relevant to the jury in its deliberations.
[22] Nor do I think the joinder of parties until the ‘dust settles’ is ill-advised. These are matters which form the basis of judgment calls for counsel, that do not warrant second guessing on an after the fact basis by the trial judge without more clear and cogent evidence. The cardinal rule of suing everyone in a tort action at first instance was clearly applicable to the instant case, regardless of how many other actions were undertaken against Marshall and the Basilian Fathers. This last proposition is underscored by the matters expressed in the Basilian Fathers’ Statement of Defence, discussed above, where there were, at best, limited admissions of liability.
[23] I have reviewed the Bill of Costs, the dockets filed in support, all of which I have contrasted to the total accounts submitted to their own client by Miller Thomson, which I would suggest do not tell the whole story, particularly since the global number provided did not accord with the manner in which I asked it to be presented.
[24] In the final analysis, I am of the view that an overall fee of $298,000 plus HST is fair and reasonable in the circumstances. I have arrived at that number after reducing the hourly rate to the number suggested by this defendant and analyzing, in detail, the material described above while doing my best to back out the duplicative and unnecessary time of senior counsel and his associates.
[25] I hasten to observe that the amount fixed was done on the application of the principles described in Rule 57 and is not intended to additionally punish the Basilian Fathers for the matters in issue. That is now a matter for another court to deal with.
Disbursements
[26] I do not normally bore down into the disbursements account sought by plaintiffs. In my view, this is a matter that should best be dealt with by counsel who are better situated to arm-wrestle each other on the ‘nickels and dimes’.
[27] That said, the most glaring disbursement that has not been justified in the plaintiff’s material filed in support of the claim for costs is the report and attendant costs of the Canon Law expert from whom I did not hear. I would therefore reduce the amount sought by $3,078.33 plus HST.
[28] I will not touch the other amounts challenged since either they are not properly deducted, for example, costs in respect of the ‘released’ defendants, or are de minimis to warrant determination by the court.
Prejudgment Interest
[29] The jury awarded the plaintiff $425,000 for general and aggravated damages. The parties are in agreement that interest is exigible on the aforesaid sum under section 128(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, from the date of the cause of action arose to the date of judgment. They are in agreement that a notice of claim was delivered on September 17th, 2012, which is the operative commencement date for the running of interest. They disagree on the rate to be employed.
[30] Section 128(2) of the Courts of Justice Act states that the rate of prejudgment interest on damages for non-pecuniary loss in an action for personal injury shall be the rate determined by the rules of court. Rule 53.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states that the prejudgment rate on damages for non-pecuniary loss is 5% per year.
[31] The defendant takes issue with the 5% rate and instead asks the court to use its discretion under section 130 of the Courts of Justice Act to reduce the rate of interest to ensure that the plaintiff is not overcompensated by a higher interest rate than the economic reality.
[32] The defendant argues that section 258.3(8.1) of the Insurance Act, R.S.O. 1990, c. I.8 changed the rate of prejudgment interest to the bank rate, to be calculated under s. 127 of the Courts of Justice Act.
[33] The text of section 258.3(8.1) is 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).
[34] Subsection (8) in my view is to be narrowly construed as “an action for loss or damage from bodily injury or death arising directly or directly from the use or operation of an automobile.” Support for this conclusion is also found from the subsection’s headings under Part IV of the Insurance Act, which includes reference to the heading, “Automobile Insurance” and the sub-heading, “Motor Vehicle Liability Policies”.
[35] The defendant submits that the decision in Cobb v. Long Estate, 2017 ONCA 717 stands for the proposition that a trial judge’s exercise of discretion under section 130 of the Courts of Justice Act is not limited to only car accidents. Respectfully, that conclusion does not accord with my reading of the case.
[36] In her introduction to the decision, MacFarland J.A. clearly states that the case at bar, together with its companion case El-Khodr v. Lackie, 2017 ONCA 716, “raise common issues regarding the regime in Part VI of the Insurance Act, R.S.O. 1990, c. I.8 for the treatment of statutory accident benefits (“SABs”) in the calculation of damages arising from motor vehicle accidents” (para. 1). See also El-Khodr v. Lackie at para. 1.
[37] Further, Matheson J. in Awan v. Levant, 2015 ONSC 2209 similarly held, at para. 27, that “[s]ubsection 258.3(8.1) of that Act now provides that section 128(2) of the Courts of Justice Act does not apply in respect of the calculation of pre-judgment interest for damages for non-pecuniary loss in motor vehicle personal injury claims.”
[38] To repeat the obvious: The current action is a claim for damages arising from an historical sexual assault, and as such, section 258.3(8.1) of the Insurance Act has no application. Therefore, I have concluded that the default prejudgment interest rate of 5% is applicable on the general and aggravated damages from the date of the Notice of Claim to the date of judgment.
[39] I will leave it to counsel to do the arithmetic for the costs and interest in accordance with these reasons.
