Court of Appeal for Ontario

Citation: Canadian National Railway Company v. Royal and Sun Alliance Insurance Company of Canada, 2007 ONCA 531

Date: 2007-07-16

Docket: C42591

Before: Rosenberg, Cronk and Lang JJ.A.

Between:

Canadian National Railway Company, Grand Trunk Western Railroad Incorporated, and St. Clair Tunnel Company

Plaintiffs (Respondents (Appellants by Cross-appeal))

— and —

Royal and Sun Alliance Insurance Company of Canada, AXA Assurances Inc., The Continental Casualty Company of Canada, Reliance Insurance Company, Aviva Canada Inc., and St. Paul Fire and Marine Insurance Company

Defendants (Appellants (Respondents by Cross-appeal))

Counsel:

Earl A. Cherniak Q.C., Kirk F. Stevens and David E. Liblong for the Appellants (Respondents by Cross-appeal) Plaintiffs (Respondents (Appellants by Cross-appeal))

Richard H. Shaban and Sharon C. Vogel for the Respondents (Appellants by Cross-appeal) Defendants (Appellants (Respondents by Cross-appeal))

Heard: September 11 and 12, 2006

On appeal and cross-appeal from the judgment of Justice John D. Ground of the Superior Court of Justice dated October 7, 2004, reported at 2004 ONSC 33029, [2004] O.J. No. 4086.

Costs Endorsement

[1] On March 26, 2007, the court released its reasons for judgment in this matter, by which a majority of the court allowed the appeal and dismissed the cross-appeal. As they were invited to do, the parties have filed written submissions on the issue of costs in this court, and in the court below, given that result.

[2] After considering those submissions, the court has decided as follows.

[3] The insurers are entitled to their costs of these proceedings, on the partial indemnity scale. We fix those costs in the total amount of $135,000.00, inclusive of disbursements and GST.

[4] The insurers are also entitled to their costs of the lengthy trial in this case, on the partial indemnity scale. The trial involved admittedly complex factual and legal issues, highly technical and complicated evidence, and lengthy expert testimony. In these circumstances, all parties, including the CN companies, reasonably could have expected a substantial award of trial costs to the parties who were ultimately successful.

[5] We note that the trial judge awarded the CN companies, the plaintiffs in this action, their costs of the trial in an amount in excess of $1.1 million.

[6] However, counsel for the insurers claim legal fees representing approximately 75% of the fees apparently charged to their clients. In our view, this percentage recovery is excessive on the partial indemnity scale. Taking into account a percentage recovery that we regard as appropriate in this case – approximately 65% – and the submissions of the parties, we fix the insurers’ costs of the trial in the total amount of $510,000.00, inclusive of disbursements and GST.

"M. Rosenberg J.A."

"E.A. Cronk J.A."

"S.E. Lang J.A."