Court File and Parties
OSHAWA COURT FILE NO.: CV-17-3252 DATE: 20200402 CORRIGENDA: 20200403 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kasey Mundinger, Plaintiff AND: Heather Ashton and L&A Mutual Insurance Company, Defendants
BEFORE: The Honourable Mr. Justice R.E. Charney
COUNSEL: K. Stoykov and G. Bushi, Counsel for the Plaintiff S. Reisler and C. A. Stewart, Counsel for the Defendants
HEARD: In-Writing
Costs Endorsement
(Text of Original Endorsement Has Been Amended – Changes Appended)
[1] This civil action relates to the plaintiff’s claim for damages in relation to a motor vehicle accident in Uxbridge, Ontario on July 9, 2010. The defendant admitted liability, but disputed the nature, seriousness and duration of the plaintiff’s injuries. The issues at trial were limited to causation and damages.
[2] The trial in this action proceeded before a jury for eleven days, with the plaintiff seeking damages for past and future lost income, loss of competitive advantage, future health care costs, and general damages.
[3] On December 6, 2019, the jury returned its verdict and awarded the plaintiff $29,000 for past lost income, $4,000 for future lost income, and $20,000 for general damages.
[4] After taking into account the current deductible provided in the regulations, the jury’s general damage award is netted to zero, and the plaintiff did not succeed in obtaining any award for general damages.
[5] Prior to trial, the plaintiff received $41,600 income replacement benefits from her accident benefits insurer.
[6] In a decision released on January 22, 2020 (2020 ONSC 409), I concluded that the income replacement benefits provided by the plaintiff’s own insurer must be deducted from both the past and future lost income damages awarded by the jury, and therefore the net result is an award of zero. As such, the plaintiff’s action was dismissed.
[7] The parties have not been able to settle costs, and have each made costs submissions. The plaintiff’s submissions were somewhat delayed as a result of settlement discussions, but they have provided a satisfactory explanation for the delay, and there is no prejudice to the defendant. Accordingly, I have accepted their late filed submissions.
Position of the Defendant
[8] The defendant was wholly successful in this action and seeks costs on a partial indemnity basis in the all-inclusive amount of $160,000.
[9] This amount is significantly reduced from the defendant’s bill of costs, which indicates that the defendant’s total partial indemnity fees are $215,113, and total disbursements are $65,116.
[10] The defendant points to the following factors, which may be considered under Rule 57.01 of the Rules of Civil Procedure, in support of its claim for costs:
- The defendant was successful on the majority of motions and voir dires argued during the course of the trial, including the plaintiff’s motion to strike the jury, the defendant’s motion to exclude the evidence of Arvid Gupta, the motion to determine the jury question, the motion regarding disclosure of the plaintiff’s relevant social media records, the threshold motion and the motion in writing regarding the deduction of collateral benefits.
- The defendant made multiple offers to settle on the basis of a consent to a dismissal of the action on a without costs basis. In contrast, the plaintiff’s only formal offer prior to trial was for $350,000 plus costs and disbursements. While the costs consequences of Rule 49.10(2) do not apply where the defendant is wholly successful at trial (because the defendant is presumptively entitled to partial indemnity costs for the entire proceeding in any event), the Court may take any offers to settle into account under Rule 49.13.
- The plaintiff claimed damages in the amount of $1 million and recovered nil (Rule 57.01(1)(a)).
- The plaintiff called 11 lay witnesses (including herself) and 5 expert witnesses. By comparison, the defendant called only 2 witnesses: herself and one expert.
- The defendant admitted liability prior to trial, thereby shortening the trial.
[11] The defendant has provided a number of cases in which this Court has awarded costs to the successful defendant in the range of $130,000 to $175,000 in similar circumstances. The defendant argues that these cases may be considered in determining what an unsuccessful plaintiff could reasonably expect to pay for an eleven-day trial:
(a) Nguyen v. Szot, 2017 ONSC 3705 (b) Jamieson v. Kapashesit, 2019 ONSC 2831 (c) Robichaud v. Constantinidis, 2020 ONSC 310 (d) Loye v. Bowers, 2020 ONSC 782
Position of the Plaintiff
[12] The plaintiff advises that she is covered by an Adverse Costs Insurance Policy that covers up to a maximum of $100,000 of the defendant’s costs. She takes the position that costs should be limited to costs covered by that policy because she does not own any assets that could satisfy a costs order in excess of that amount. The plaintiff has provided no authority to support this position.
[13] The plaintiff also argues that the defendant’s offer to settle on a dismissal without costs basis was unreasonable. The plaintiff argues that the defendant was “playing hardball” and did not make any attempts to resolve the matter in a reasonable manner.
[14] The plaintiff has not disputed any other aspect of the defendant’s costs claim. She does not dispute the number of hours claimed or the hourly rate, or any of the disbursements set out in the costs outline filed by the defendant.
[15] The plaintiff has not provided a bill of costs from her own lawyer to suggest that the defendant’s bill of costs was disproportionate or inconsistent with the plaintiff’s reasonable costs expectations.
Analysis
[16] The existence and the amount of adverse costs insurance is an irrelevant factor in the fixing of costs. In Canfield v. Brockville Ontario Speedway, 2018 ONSC 3288 at para. 59, Mew J. stated:
In my view, the amount of adverse costs insurance purchased is irrelevant… I was advised by counsel that the maximum coverage available to the plaintiff was $100,000. Accordingly, neither the existence of this coverage nor the amount of coverage obtained have any bearing whatsoever upon an assessment or fixing of costs.
[17] I note that the plaintiff is not the insured party under the Adverse Costs Insurance Policy. The correspondence from the insurer makes clear that the policy holder is the plaintiff’s law firm.
[18] Neither the plaintiff nor the plaintiff’s law firm can limit the amount of costs to which a successful defendant might be entitled by limiting their adverse costs insurance coverage. There is no suggestion that the plaintiff’s law firm was prepared to limit its costs claim to $100,000 if the plaintiff had been successful in this case [1].
[19] Permitting a plaintiff to escape the costs consequences of an unsuccessful claim by limiting the unsuccessful plaintiff’s costs exposure to the amount of the plaintiff’s or law firm’s adverse costs insurance coverage would undermine the purpose of costs to promote settlement. It would permit a plaintiff to ignore reasonable offers to settle and take their chance at trial without risk of adverse costs consequences: Clubine v. Paniagua, 2018 BCSC 1076, at para. 28.
[20] Given the result in this case, the defendant’s settlement offer was perfectly reasonable. The plaintiff’s settlement offer was not. The defendant’s offer accurately predicted the result of the litigation. The defendant’s offer to settle on a without costs basis contained a true element of compromise, and this cannot, in any sense, be described as “playing hardball”. “Under our system defendants are entitled to put the plaintiff to the proof, and there is no obligation to settle an action”: Foulis et al. v. Robinson; Gore Mutual Ins. Co., Third Party, 1978 1307 (ON CA).
Conclusion
[21] There being no issue taken by the plaintiff with respect to the hourly rates, number of hours or disbursements charged by the lawyers for the defendant, and having regard to the plaintiff’s reasonable expectations as well as the other factors discussed, I find that the defendant’s claim for costs is fair and reasonable and fix the defendant’s costs, payable by the plaintiff, in the amount of $160,000 inclusive of disbursements and H.S.T.
Justice R.E. Charney
Date: April 2, 2020
Amendments
[22] Paragraph [21] has been amended from its original text: There being no issue taken by the plaintiffs with respect to the hourly rates, number of hours or disbursements charged by the lawyers for the defendants, and having regard to the plaintiffs’ reasonable expectations as well as the other factors discussed, I find that the defendant’s claim for costs is fair and reasonable and fix the defendants’ costs, payable by the plaintiff, in the amount of $160,000 inclusive of disbursements and H.S.T.
To now read as follows: There being no issue taken by the plaintiff with respect to the hourly rates, number of hours or disbursements charged by the lawyers for the defendant, and having regard to the plaintiff’s reasonable expectations as well as the other factors discussed, I find that the defendant’s claim for costs is fair and reasonable and fix the defendant’s costs, payable by the plaintiff, in the amount of $160,000 inclusive of disbursements and H.S.T.
Footnotes
[1] This concern is obviated in cases commenced under the new Simplified Procedure rules of the Rules of Civil Procedure (Rule 76). Rule 76.12.1 limits costs and disbursements in actions commenced under Rule 76 as follows: “no party to an action under this Rule may recover costs exceeding $50,000 or disbursements exceeding $25,000”.