COURT FILE NO.: CV-16-1693-00 (Milton) DATE: 2022-04-04
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
FIONA STEWART Plaintiff
- and -
NATALIE ALLAN, DANAN LATTANZIO and ANN LATTANZIO Defendants
COUNSEL: Neil G. Wilson, for the Plaintiff Trevor J. Buckley, for the Defendant, Natalie Allan Sonja A. Nuic, for the Defendants, Danan Lattanzio and Ann Lattanzio Jessica Simone, for the non-party, HVE Healthcare Assessment
HEARD: In Chambers
Price J.
Costs Endorsement
NATURE OF PROCEEDING
[1] The plaintiff moved for an Order to compel production of records from a non-party assessment company, HVE Healthcare Assessments, and the doctor, Joel Finkelstein, whom it retained, and to permit questioning of HVE. Dr. Finkelstein conducted an orthopedic assessment of the plaintiff and concluded that she was not permanently injured and was able to return to work.
[2] The defendants asserted that the records were protected by litigation privilege and should not be ordered produced. The plaintiff prevailed in its position that the litigation privilege that attached to the records must yield to the principle of fairness. The records were ordered produced, and questioning was ordered.
[3] The parties have been unable to agree on costs. These reasons address that issue.
ISSUES
[4] The court must determine whether the plaintiff is entitled to her costs of the motion and, if so, the amount.
PARTIES’ POSITIONS
[5] The plaintiff claims costs on a partial indemnity scale in the amount of $16,877.92, consisting of $13,863.74 for fees she was charged by her lawyers plus HST and disbursements. She submits that she was entirely successful on the motion and is presumptively entitled to her costs.
[6] The defendant argues that the motion did not involve novel issues and that summonsing Dr. Finkelstein and cross-examining Joseph Lin on his affidavit was unnecessary and added expense to the motion. They submit that the amount claimed is disproportionate to their own Bill of Costs, which totals only $5,887.50. They argue that there is no basis for allowing the costs of photocopying or printing in a virtual motion, that the cost of the transcript of Mr. Lin’s cross-examination was the plaintiff’s responsibility which she should not be allowed to recover, and that the plaintiff is seeking to recover twice for her lawyer’s law clerk, by claiming for her time as well as her fees for serving summonses.
ANALYSIS AND EVIDENCE
General principles
[7] Boswell J. set out the general principles governing costs assessments in George v. Landels [1], where he stated:
The award of costs is governed by section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 and by Rule 57.01 of the Rules of Civil Procedure. Section 131 provides for the general discretion to fix costs. Rule 57.01 provides a measure of guidance in the exercise of that discretion by enumerating certain factors that the court may consider when assessing costs. In addition, the Court must always be mindful of the purposes that costs orders serve. As Perell J. summarized in 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (S.C.J.), at para. 10:
Modern costs rules are designed to advance five purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements (internal citations omitted).
[8] Ultimately, in determining an amount for costs, the overriding principles are fairness and reasonableness. [2] In assessing what is fair and reasonable in the circumstances, the Court does not engage in a mechanical exercise, but takes a contextual approach, applying the principles and factors discussed above, to settle on a figure that is fair and reasonable in all the circumstances. [3]
[9] The Court is guided by the factors set out in Rule 57.01(1) of the Rules of Civil Procedure. The Court may consider, among other factors, the following:
(a) The complexity of the proceeding; (b) The importance of the issues; (c) The conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (d) Any offers to settle; (e) The principle of indemnity; (f) The concept of proportionality, which includes at least two factors: (i) The amount claimed and the amount recovered in the proceeding; and, (ii) 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; (g) Any other matter relevant to the question of costs.
Importance and complexity of the motion
[10] The application involved a claim for catastrophic and disabling injuries. Dr. Finkelstein’s report attached 2800 pages of medical records and the defendants considered the claim of sufficient importance that they hired investigators to conduct eight days of surveillance. The evidence of Dr. Finkelstein was clearly central to the defendants’ case, having regard to the fact that they have listed Dr. Finkelstein as the first witness they will call after the defendants themselves, and fifteen hours (three days) of court time has been set aside for his evidence, more than any other defence witness. He is the only witness to be called by the defence who expresses the opinion that the plaintiff is not meaningfully injured and is deliberately exaggerating her pain, so the evidence that the plaintiff sought production of was of great importance to the case.
[11] The motion additionally involved issues of public importance, in that it required the Court to balance the principle of fairness with litigation privilege. That issue required the review of a significant body of law, reflected in the fact that the plaintiff cross-examined the defendants’ affiant as well as Dr. Finkelstein, and the defendant served two facta that referred to 18 court decisions.
Reasonableness and offers to settle
[12] The general rule is that costs follow the event and will be awarded on a partial indemnity scale. [4] In special circumstances, costs may be awarded on a higher scale, but those cases are exceptional and generally involve circumstances where one party to the litigation has failed to accept a reasonable offer to settle, behaved in an abusive manner, brought proceedings wholly devoid of merit, and/or unnecessarily run up the costs of the litigation. [5] None of those circumstances exist here, and the plaintiff claims her costs on a partial indemnity scale.
[13] That said, Dr. Finkelstein’s report amounts to an allegation of fraud against the plaintiff and the fact that the costs of the motion are now being awarded on a partial indemnity scale will not preclude the defendant, if successful at trial, from seeking the balance of her costs of the motion, as well as the other costs of the proceeding, on a substantial indemnity scale, or on a full recovery basis.
Indemnity - The hourly rates charged
[14] In determining the appropriate hourly rates to be assigned to the lawyers involved in the motion, the court follows the approach taken by Aitkin J. in Geographic Resources [6]. That is, the starting point is the successor of the Costs Grid, namely, the “Information for the Profession” bulletin from the Costs Sub-Committee of the Rules Committee (the “Costs Bulletin”), which can be found immediately before Rule 57 in the Carthy or Watson & McGowan edition of the Rules, sets out maximum partial indemnity hourly rates for counsel of various levels of experience.
[15] The Costs Bulletin suggested maximum hourly rates (on a partial indemnity scale) of $80.00 for law clerks, $225.00 for lawyers of less than 10 years’ experience, $300.00 for lawyers of between 10- and 20-years’ experience, and $350.00 for lawyers with 20 years’ experience or more. [7] The upper limits in the Costs Bulletin are generally intended for the most complex and important of cases.
[16] The Costs Bulletin, published in 2005, is now dated. Aitkin J. considered adjusting the Costs Subcommittee’s hourly rates for inflation, as Smith J. did in First Capital (Canholdings) Corp. v. North American Property Group [8], but the unadjusted rates of the lawyers in her case were only slightly less than the actual fees they charged, so she elected to use their unadjusted rates. Normally, however, it is appropriate to adjust the hourly rates in the Costs Bulletin to account for inflation since 2005.
[17] Based on the Bank of Canada Inflation Calculator, available online at http://www.bankofcanada.ca/rates/related/inflation-calculator/, the 2022 equivalent of the hourly rates in the Costs Bulletin are $111.11 for law clerks, $312.49 for lawyers of under 10 years’ experience, $416.65 for lawyers of between 10- and 20-years’ experience, and $486.09 for lawyers of over 20 years’ experience.
[18] The court is guided by the rates in the Costs Bulletin, not the actual hourly rates charged. The actual rates charged are relevant only as a limiting factor, in preventing the costs awarded from exceeding the actual fees charged. The Costs Subcommittee’s rates apply to all lawyers and all cases, so everyone of the same level of experience starts at the same rate.
[19] The court adjusts the hourly rate, or the resulting fees, to reflect unique features of the case, including the complexity of the proceeding, the importance of the issues, and the other factors set out in Rule 57.01(1). If an excessive amount of time was spent, or too many lawyers worked on the file, the court reduces the resulting amount of fees accordingly. As long as the resulting amount does not exceed the amount actually charged to the client, the actual fee that the client agreed to pay is irrelevant.
[20] The plaintiff’s counsel, Mr. Wilson, was called to the Bar in 2011, and at the time the motion was argued, had been in practice for 10 years. He is therefore entitled to claim a maximum hourly rate of $416.65, but as he is at the lower end of the range of 10 to 20 years, he is entitled to claim slightly above the maximum amount of $312.49 that can be claimed by a lawyer who has practiced less than ten years. I would therefore allow an hourly rate of $320.00 for him on a partial indemnity scale. His actual hourly rate is $405.00 which should not be exceeded, having regard to the principle of indemnity in awarding costs.
[21] Mr. Wilson was assisted by an Articling student, Avinaash Laljie, and a paralegal, Brian J. Kirkland, for whose time the plaintiff is entitled to claim a maximum of $111.11 on a partial indemnity scale.
Indemnity - The time spent on the motions
[22] As appears from the plaintiff’s bill of costs, Mr. Wilson spent a total of 38.9 hours on the motion, Mr. Laljie spent 9.8 hours, and Mr. Kirkland 1.1 hours. At their partial indemnity hourly rates, the plaintiff is entitled to claim $13,659.10 for their time, consisting of $12,448.00 for Mr. Wilson (38.9 x $320.00), and $1,211.10 for Messrs Laljie and Kirkland (10.9 hours, collectively x $111.11). The plaintiff claims only $12,268.80 for fees, which I regard as conservative.
[23] The defendants’ lawyer, Ms. Nuic, spent 12.7 hours on the motion, and was assisted by students or paralegals who spent an additional 10 hours. While, collectively, the defence team spent a little less than half the time the plaintiff’s team spent (22.7 hours, compared to 49.8 hours), I attribute that, in large measure, to the fact that the plaintiff bore the onus on the motion and it was necessary for them, as I find, to cross-examine Mr. Lin, and consequently, were required to spend a greater amount of time in preparation.
[24] I find that the quality of the plaintiff’s presentation, both written and oral, reflected the time they spent in preparing the motion. There did not appear to me to be over-lawyering, and the time that was spent was well spent and produced an excellent result in a difficult case. I am therefore allowing the full amount claimed for fees and HST.
[25] The defendants’ criticism of the disbursements is unwarranted. While the plaintiff was undoubtedly responsible for incurring the cost of ordering a transcript of her lawyer’s cross-examination of Mr. Lin, that is no bar to her recovering that cost as a disbursement at this stage. The cost of photocopying and printing is also recoverable, even though the hearing was virtual, as the cost of scanning pages is likely less than the time that would be required to assemble electronic version of documents and case authorities that would otherwise have been necessary in order to render them useful at the hearing.
[26] The plaintiff has noted that service of documents was done by an outside process server and not by his paralegal or articling student. There will therefore be no duplication of recovery in allowing the cost of service.
[27] In fixing costs, the court need not undertake a line-by-line analysis of the hours or expenses claimed, nor should it second guess the amounts claimed unless they are clearly excessive or overreaching. [9] As noted above, I find that the amounts claimed by the plaintiff are neither excessive nor overreaching.
[28] For these reasons, I allow the plaintiff’s costs in the amounts claimed. It is ordered that:
- The defendants Danan Lattanzio and Ann Lattanzio shall forthwith pay to the plaintiff her costs of the motion, in the amount of $16,877.92, inclusive of fees, HST, and disbursements.
Price J. Released: April 4, 2022