Ross v. Bacchus

Ontario Reports

Court of Appeal for Ontario,

Doherty, Pepall and van Rensburg JJ.A.

May 15, 2015

126 O.R. (3d) 255 | 2015 ONCA 347

Case Summary

Civil procedure — Trial — Trial judge — Trial judge intervening during cross-examination of plaintiff and plaintiff's expert in personal injury action — Most interventions appropriate — Some possibly unnecessary but not compromising appearance of trial fairness.

Insurance — Automobile insurance — Costs — Defendant's insurer making early offer to settle which plaintiff did not accept — Insurer acceding to plaintiff's request for mediation on eve of trial but stating that it was not prepared to settle claim at that point — Insurer not breaching its obligations under ss. 258.5 and 258.6 of Insurance Act — Trial judge erring in awarding additional costs of $60,000 against insurer based on failure to attempt to settle action expeditiously and failure to participate in mediation — Insurance Act, R.S.O. 1990, c. I.8, ss. 258.5, 258.6.

The plaintiff brought an action for damages for personal injuries arising from a motor vehicle accident. The jury awarded the plaintiff damages of $248,000. The trial judge ordered costs payable to the plaintiff and included in the costs award [page256] an order for additional costs in the amount of $60,000 based on the defendant's insurer's failure to attempt to settle the claim as expeditiously as possible and failure to participate in the mediation of the claim, as required by ss. 258.5 and 258.6 of the Insurance Act. The defendant appealed the damages award and sought leave to appeal the costs award.

Held, the appeal should be allowed in part.

There was no merit to the defendant's allegation that interventions by the trial judge during the cross-examination of the plaintiff and his expert destroyed the appearance of impartiality and resulted in a miscarriage of justice. Most of the interventions were appropriate. Some were possibly unnecessary, but did not compromise the appearance of trial fairness.

The trial judge did not err in his charge to the jury on the issue of causation. He stated that, "In law, the cause of an injury is the cause which produces the injury, and without which the result would not have happened." His failure to use the phrase "but for" in describing causation was not reversible error as the words he used to describe the causation requirement conveyed the correct meaning to the jury.

The award of costs under ss. 258.5 and 258.6 of the Insurance Act was unjustified and should be set aside. The insurer made an early offer to settle the claim for $40,000, and made a counter-offer of $30,001 when the plaintiff made an offer to settle for $94,065 three weeks before the trial. Counsel for the defendant also agreed to the plaintiff's request for mediation on the eve of the trial, but told the plaintiff that the insurer was not interested in settling the case at that point. That statement could not be equated with a failure to attempt to settle the claim as expeditiously as possible. Moreover, a strong statement of the insurer's position going into the mediation does not necessarily preclude meaningful participation in the mediation. There was no evidence that the insurer did not participate in the mediation in a meaningful way. The insurer could not be said to have breached its obligations to attempt to settle the claim as expeditiously as possible or to participate in mediation.

Cases referred to

Clements v. Clements, [2012] 2 S.C.R. 181, [2012] S.C.J. No. 32, 2012 SCC 32, 331 B.C.A.C. 1, 431 N.R. 198, 2012EXP-2458, J.E. 2012-1292, [2012] 7 W.W.R. 217, 31 B.C.L.R. (5th) 1, 93 C.C.L.T. (3d) 1, 29 M.V.R. (6th) 1, 346 D.L.R. (4th) 577, 215 A.C.W.S. (3d) 1035; Keam v. Caddey (2010), 103 O.R. (3d) 626, [2010] O.J. No. 3650, 2010 ONCA 565, 267 O.A.C. 296, [2010] I.L.R. I-5032, 88 C.C.L.I. (4th) 177, 322 D.L.R. (4th) 659, 98 M.V.R. (5th) 195; McCombie v. Cadotte (2001), 53 O.R. (3d) 704, [2001] O.J. No. 1286, 199 D.L.R. (4th) 688, 143 O.A.C. 201, 29 C.C.L.I. (3d) 157, 7 C.P.C. (5th) 267, 12 M.V.R. (4th) 223, 104 A.C.W.S. (3d) 391 (C.A.); Osterbauer v. Ash Temple Ltd. (2003), 2003 CanLII 6614 (ON CA), 63 O.R. (3d) 697, [2003] O.J. No. 948, [2003] CLLC Â210-047, 121 A.C.W.S. (3d) 277 (C.A.); Ross v. Hern, 2004 CanLII 16950 (ON CA), [2004] O.J. No. 1186, 45 C.P.C. (5th) 107, 129 A.C.W.S. (3d) 1051 (C.A.); Union Carbide Canada Inc. v. Bombardier Inc., [2014] 1 S.C.R. 800, [2014] S.C.J. No. 35, 2014 SCC 35, 457 N.R. 279, 55 C.P.C. (7th) 1, 373 D.L.R. (4th) 626, 2014EXP-1508, J.E. 2014-849, EYB 2014-236800, 239 A.C.W.S. (3d) 941; Williston v. Gabriele (2013), 115 O.R. (3d) 144, [2013] O.J. No. 2038, 2013 ONCA 296, 306 O.A.C. 364, [2013] I.L.R. I-5429

Statutes referred to

Insurance Act, R.S.O. 1990, c. I.8, ss. 258.5, (5), 258.6, (2) [page257]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 31.11(1), (2), 49

APPEAL by the defendant from the damages award of Ramsay J., sitting with a jury, dated November 27, 2013; and the costs order, [2013] O.J. No. 5793, 2013 ONSC 7773 (S.C.J.).

Todd J. McCarthy, for appellant.

D. Robert Findlay and T. Andrew Sprung, for the respondent.

The judgment of the court was delivered by

DOHERTY J.A.: —

I

Overview

[1] Bryan Ross (the respondent) was stopped at a red light on his motorcycle when a vehicle driven by Shaheed Bacchus (the appellant) struck him from behind. Mr. Ross sued, claiming injuries to his back, neck, hip and knees. A jury awarded Mr. Ross damages of $248,000. The trial judge ordered costs and disbursements payable to Mr. Ross in the amount of $217,000 plus HST. The costs order included $60,000 awarded by the trial judge because Mr. Bacchus' insurer had failed to attempt to settle the claim as expeditiously as possible, and had refused to participate in the mediation of the claim, as required by ss. 258.5 and 258.6 of the Insurance Act, R.S.O. 1990, c. I.8. Those provisions provide that a trial judge can take the insurer's failure to perform those obligations into consideration when awarding costs. Mr. Bacchus appeals both damages and costs.

[2] In his appeal from the damages award, counsel for the appellant raised various issues in his factum. He concentrated on two arguments in his oral submissions. I will address only those arguments in these reasons.[^1] Counsel submits that the interventions by the trial judge throughout the trial destroyed the appearance of judicial impartiality, rendered the trial unfair and resulted in a miscarriage of justice. Counsel also [page258] argues that the trial judge misdirected the jury on the issue of causation.

[3] The appellant also seeks leave to appeal the costs award. Counsel made several submissions in his factum attacking the costs order, but limited his oral argument to a single point. Counsel submits that the trial judge erred in awarding the respondent $60,000 in costs to reflect the appellant's insurer's failure to attempt to settle the claim as expeditiously as possible, and the insurer's refusal to participate in the mediation of the claim. Counsel contends that there is no evidence that the insurer failed to attempt to expeditiously settle the claim. In addition, he submits that the evidence actually demonstrates that the insurer participated in an eleventh hour mediation requested by counsel for the respondent.

[4] I would dismiss the appeal from the damages award. There is no merit to the argument that the interventions by the trial judge destroyed the appearance of impartiality and resulted in a miscarriage of justice. The instructions to the jury properly captured the causation requirement even if the trial judge did not use the exact words from the most recent jurisprudence.

[5] I would grant leave to appeal the costs order and allow the appeal by deleting the $60,000 the trial judge awarded to reflect the insurer's failure to comply with its obligations under ss. 258.5 and 258.6 of the Insurance Act. The record does not support the trial judge's findings that the insurer failed to attempt to settle the claim expeditiously and its participation in the mediation was a "sham".

II

The Trial Judge's Interventions

[6] Judicial interventions in the course of a trial can, by their content, nature, number or a combination of the three, result in a miscarriage of justice. The interventions considered as a whole may reveal a reasonable apprehension of bias or result in an impermissible interference with the proper role of counsel. In either event, the interventions will destroy the appearance of justice, an essential element in any trial: Ross v. Hern, 2004 CanLII 16950 (ON CA), [2004] O.J. No. 1186, 45 C.P.C. (5th) 107 (C.A.), at paras. 11-13; Osterbauer v. Ash Temple Ltd. (2003), 2003 CanLII 6614 (ON CA), 63 O.R. (3d) 697, [2003] O.J. No. 948 (C.A.), at paras. 10-11.

[7] In his factum, counsel for the appellant focused on interventions by the trial judge during the cross-examination of the main expert called by the respondent at trial. In oral argument, [page259] however, counsel took the court to three interjections by the trial judge during the cross-examination of the respondent and a series of interjections by the trial judge during the re-examination of the respondent. Counsel advised that these interruptions, standing alone, would not merit appellate intervention, but were provided to give necessary context and meaning to the improper interventions that occurred during the testimony of the respondent's expert.

[8] I have read and reread the 80-page cross-examination of the respondent. Appellate counsel's submission that the cross-examination is "riddled" with unsolicited interventions by the trial judge is unsupported by the record. As in any trial, the trial judge interrupted both counsel from time to time. The interruptions during the respondent's cross-examination were mainly brief, and so innocuous as to be almost unnoticeable.

[9] I turn now to the three interventions highlighted by counsel for the appellant in his oral argument. The first occurred when Mr. Ross testified that he did not recall telling the police officer at the scene that he did not sustain any injuries in the accident. Trial counsel for the appellant sought to cross-examine the respondent on evidence he had given at his discovery. The trial judge had a transcript of the discovery. As counsel began to put a portion of the respondent's discovery evidence to him, the trial judge said: "Wait a minute. How is this inconsistent with what he has just told us?"

[10] A brief exchange ensued between the trial judge and counsel for the appellant. Counsel then said: "For some reason I misinterpreted that he had not told the officer that. That's fine, I'll just go on."

[11] Clearly, counsel intended to cross-examine the respondent on part of his discovery, but upon a further examination of the transcript prompted by the trial judge's question, decided that there was no inconsistency between the discovery evidence and the evidence at trial. Counsel moved on.

[12] The trial judge cannot be criticized for asking counsel to clarify the purpose of the proposed cross-examination. As became obvious, the trial judge's question was well founded, as counsel had apparently misapprehended the discovery evidence. The trial judge's inquiry avoided cross-examination on a non-existent inconsistency. This sort of judicial intervention, standard fare in any jury case, could not possibly have had any adverse effect on the appearance of the fairness of the trial.

[13] In this court, counsel for the appellant submitted that the trial judge's interruption was improper because the respondent's discovery evidence was admissible at the behest of the appellant [page260] without any demonstration of inconsistency: see Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 31.11(1). No doubt, a party can read in the discovery of an adverse party as part of its case. That is not what trial counsel was doing during the cross-examination of the respondent. Counsel wanted to use the respondent's discovery to impeach the respondent's trial testimony based on an alleged inconsistency: see rule 31.11(2). That effort was abandoned when, in response to the trial judge's question, it became clear to counsel that there was no inconsistency.

[14] The second incident during cross-examination of the respondent, said by counsel for the appellant to have skewed the fairness of the trial, occurred when trial counsel for the appellant put certain physiotherapist's notes to the respondent. Counsel asked: "And would there -- and any reason why, in those 22 treatment notes, there's no reference to your left knee pain?"

[15] The trial judge interrupted to point out that the respondent was not the author of the physiotherapist's notes and could not explain why something was not in those notes. Counsel quickly revised the question, asking: "And you didn't -- and during those 22 treatments you didn't make -- you didn't complain of any left knee complaints to the therapist."

[16] The trial judge's brief and appropriate interjection caused counsel to reframe the question and proceed with his cross-examination. The intervention had no adverse impact on counsel's conduct of his cross-examination or the appearance of fairness in the proceeding.

[17] The last of the three interventions relied on by counsel for the appellant arose when counsel was questioning the respondent about an entry in a document. It would appear from the transcript that the relevant part of the document was difficult to read. The trial judge, referring to that part of the document, said: "It's very small . . . it says shortage of work."

[18] The witness agreed with the trial judge's reading of the entry. Counsel for the appellant did not suggest any different reading and continued his cross-examination.

[19] It is beyond me how this interjection could be given any sinister connotation. Nothing in the trial record suggests that anyone at the trial took the trial judge's comment as anything but a bona fide attempt to read the entry in the document on which the respondent was being cross-examined.

[20] Counsel for the appellant also takes issue with the trial judge's interventions during the re-examination of the respondent. The re-examination covers some 11 pages of the trial transcript. The trial judge interrupted trial counsel for the [page261] respondent early in his re-examination and, to a limited extent, took over parts of that re-examination. His intervention was probably unnecessary and may have caused some confusion in the re-examination. Considered in the context of the entire trial, however, the intervention bordered on trivial, and did not impair the appearance of the fairness of the trial, or prevent the appellant from presenting his case at trial.

[21] I come now to the interventions during the cross-examination of the respondent's expert. Counsel for the appellant submits that these interventions demonstrate the trial judge's bias and resulted in a miscarriage of justice.

[22] The trial judge's comments challenged by counsel for the appellant begin some 21 pages into a 24-page cross-examination of the expert. Trial counsel for the appellant had spent some time establishing the basis for the expert's opinion and, in particular, establishing that the statements made by the respondent to the expert were relied on by the expert in coming to his opinion. The cross-examination continued:

Q. Well, no, you're aware of what he [the respondent] tells you.

A. Correct.

Q. The assumptions that you receive from him, as you said earlier, you believe are true, correct?

A. Absolutely.

Q. Okay.

A. Well I believe them true, but I do my own assessment.

Q. You do your own assessment . . .

A. Of course.

Q. . . . but it sounds to me like he's providing you with inaccurate assumptions when you take into consideration his evidence yesterday that's what I'm saying.

(Emphasis added)

[23] Counsel's last question prompted the trial judge to interrupt with the observation that the witness could not answer the question as posed, but could identify the sources of information he had relied on in preparing the report. The trial judge was correct in his observation. It was not for the expert to characterize statements made to him by the respondent as accurate or inaccurate. That was a question for the jury.

[24] Trial counsel continued his cross-examination of the expert and his attempt to establish that parts of the expert's report were based on statements made by the respondent. Counsel suggested to the expert that he had relied on "factual [page262] assumptions and the medical record to prepare this report". The witness disagreed. Before counsel could pose a further question, the trial judge intervened and reiterated his concern about the line of questioning. After a brief exchange between counsel and the trial judge, the trial judge said:

Don't ask him to tell you what's true and what's not, he can't -- and based on the evidence he's heard -- he's an expert and he's giving an opinion based on a hypothetical. The jury will be told to find the facts -- whether the hypothetical resembles the true facts or not and whether there's any difference, any material difference in what he assumed, and what are the true facts as they find them.

[25] Counsel replied: "Okay, fair enough then; those are all my questions."

[26] It may be that this additional intervention was unnecessary. However, that is as far as any legitimate criticism of the intervention can go. Nothing said by the trial judge interfered with counsel's ability to cross-examine the expert, or would suggest to a reasonable observer that the trial judge had placed the weight of his office on the respondent's side of the scale. The final comment by the trial judge made the defence position clear. It would be for the jury, and not the expert, to decide "the true facts".

[27] I have considered the interjections identified by counsel for the appellant. I have placed those interventions in the context of the entire record. None merit appellate sanction. Nor can I assume, as counsel argued the court should, that the interventions were made in a tone of voice that demonstrated the trial judge's hostility toward the appellant's case.

[28] In summary, most of the interventions were appropriate. A trial judge is obliged to see to it that questions put to witnesses comply with the rules of evidence. Some of the interventions may have been unnecessary and some may even have suggested a degree of impatience with counsel. None, however, compromised the appearance of the fairness of the trial. There is no merit to this ground of appeal.

III

The Causation Issue

[29] The trial judge told the jury:

He [the appellant] is not, however, liable to compensate the plaintiff for injury he did not cause.

In law, the cause of an injury is the cause which produces the injury, and without which the result would not have happened. This does not mean that the law recognizes only one cause of an injury. There may be more than [page263] one effective or proximate cause of the injury. The accident was a cause of an injury if it was a direct contributing cause.

(Emphasis added)

[30] Counsel for the appellant submits that the instruction is inconsistent with the language used in Clements v. Clements, [2012] 2 S.C.R. 181, [2012] S.C.J. No. 32, 2012 SCC 32, at para. 46. Counsel argues that the trial judge was required to use the phrase "but for" in explaining causation to the jury.

[31] The argument favours form over substance. The trial judge, in explaining causation to the jury, referred to "the cause which produces the injury, and without which the result would not have happened". The latter part of this is a "but for" instruction on causation. Nothing said by the trial judge in the rest of his charge detracted from this language. No objection was made to the causation instruction. The failure to use the phrase "but for" in describing causation is not reversible error as long as the words used to describe the causation requirement convey the correct meaning to the jury.

[32] I would not give effect to this ground of appeal.

IV

The Costs Order

[33] The action was commenced in September 2010. The appellant's insurer offered to settle the claim for $40,000 in August 2011, and withdrew that offer in March 2012.

[34] In late October 2013, about three weeks before the trial was to commence, counsel for the respondent offered to settle the claim for $94,065, plus prejudgment interest and costs. The respondent also requested mediation for the first time.

[35] Trial counsel for the appellant replied to the respondent's offer the next day with an offer to settle for $30,001, plus prejudgment interest and costs. Counsel also agreed to a half-day mediation, but advised "[the insurers] are not interested in settling this case". Counsel for the respondent replied with an offer to settle in the amount of $79,065, plus prejudgment interest and costs.

[36] A half-day mediation was held on November 14. The trial commenced on November 18 and, after a six-day trial, the jury awarded the respondent damages of $248,000. This amount was more than triple the amount of the respondent's last offer.

[37] The trial judge awarded the respondent costs on a partial indemnity basis to October 28, 2013, the date of the respondent's first offer, and costs on a substantial indemnity basis after that date. The trial judge accepted the amounts claimed by the [page264] respondent as reasonable. He awarded costs of $140,000, $17,000 in disbursements and $60,000 for the insurer's failure to comply with ss. 258.5(5) and 258.6(2) of the Insurance Act. With HST, the costs award totalled $245,210.

[38] In his factum, counsel for the appellant argued that the trial judge should not have granted costs on a substantial indemnity basis and that the amount awarded was excessive. Counsel acknowledged in oral argument that the award of costs on a substantial indemnity basis after the date of the first offer was appropriate given the jury's verdict. Counsel did not pursue arguments relating to the quantum of costs in oral argument. The amount awarded was proportional and fair having regard to the issues and the length of trial.

[39] Counsel's oral argument focused on the trial judge's award of an additional $60,000 in costs to reflect the appellant's insurer's failure to attempt to settle the action expeditiously and failure to participate in mediation. He contends that there is no evidence to support either finding. Counsel submits that the evidence shows that the appellant's insurer did participate in mediation in a timely fashion after the respondent requested mediation, even though the trial was scheduled to commence less than one week later.

[40] Counsel for the appellant argues that s. 258.6 of the Insurance Act does not contemplate an inquiry into the quality of the insurer's participation in the mediation. He contends that any attempt to assess the bona fides of the insurer's participation in the mediation will inevitably run aground on the privilege attaching to communications made for the purpose of settlement in the course of mediation: see Union Carbide Canada Inc. v. Bombardier Inc., [2014] 1 S.C.R. 800, [2014] S.C.J. No. 35, 2014 SCC 35, at paras. 38-39. Finally, counsel argues that, apart from the privilege question, there is simply no evidence to justify the trial judge's description of the insurer's participation in the mediation as a "sham".

[41] Insurers defending claims for damages arising out of motor vehicle accidents are statutorily obliged to "attempt to settle the claims as expeditiously as possible": Insurance Act, s. 258.5. Similarly, insurers are obliged, on request of the opposing party, to "participate in a mediation of the claim": Insurance Act, s. 258.6. Failure to comply with either obligation "shall be considered by the court in awarding costs": Insurance Act, s. 258.5(5), s. 258.6(2). These and related provisions are a clear expression of the legislature's intention to promote the early and expeditious settlement of claims arising out of motor vehicle [page265] accidents: McCombie v. Cadotte (2001), 53 O.R. (3d) 704, [2001] O.J. No. 1286 (C.A.), at paras. 15-17.

[42] In Keam v. Caddey (2010), 103 O.R. (3d) 626, [2010] O.J. No. 3650, 2010 ONCA 565, this court considered the obligations imposed on insurers under ss. 258.5 and 258.6 of the Insurance Act. In that case, the insurer had declined two requests by the insured to participate in mediation, taking the position that the claim did not exceed the applicable threshold. No mediation was ever held.

[43] The court began by rejecting the insurer's contention that it could decline mediation based on its good faith assessment of the merits of the claim. The language of the relevant provisions of the Insurance Act made it clear that mediation was mandatory if requested by either side: Keam v. Caddey, at paras. 20-23. The court next considered the rationale that underlies costs awards pursuant to ss. 258.5 and 258.6. After recognizing the discretionary nature of the orders contemplated by those provisions, Feldman J.A. said, at para. 28:

Morden J.A. [in McCombie v. Cadotte] describes the costs sanction as a "remedial penalty". It is remedial because it is intended not only to compel compliance by insurers with an important statutory purpose, but also to provide a remedy to the other party who was deprived of the opportunity for an early settlement of the claim. It is a penalty because it is not intended to be merely compensatory of costs unnecessarily incurred by the other party or parties, as that objective is already addressed by other costs provisions of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, but to provide a meaningful consequence to an insurer that elects not to comply.

[44] In that case, the court found that the insurer's refusal to participate in the mediation warranted a costs award of $40,000, indicating, at para. 32, that the amount was necessary "to reflect the censure of the court and to provide an appropriately significant recovery for the appellants". See, also, Williston v. Gabriele (2013), 115 O.R. (3d) 144, [2013] O.J. No. 2038, 2013 ONCA 296, at paras. 25-27.

[45] The costs sanctions in ss. 258.5(5) and 258.6(2) are clearly intended to penalize insurers for non-compliance with their statutory obligations in the specific case and to encourage those same insurers to comply with those obligations in future cases. The amounts awarded should be sufficient not only to sanction the particular breach, but to give insurers a strong financial incentive to comply with their obligations in the future.

[46] The costs sanctions in ss. 258.5 and 258.6 can only serve their intended purposes if the facts justify the imposition of those sanctions. An insurer's statement on the eve of trial that it is not prepared to settle a claim cannot be equated with an insurer's failure to "attempt to settle the claim as expeditiously as possible". Nor can an insurer who actually participates in [page266] a mediation be declared to have failed to participate simply because the insurer indicated prior to the mediation that it was not prepared to settle the claim. A clear statement of the insurer's position going into the mediation, even a strong statement, does not preclude meaningful participation in a mediation.

[47] There is no evidence that the appellant's insurer failed to attempt to settle this claim as expeditiously as possible. The appellant made an "all-in" offer to settle for $40,000 in August 2011, less than one year after the action was commenced. The respondent's Rule 49 offer, his request for mediation and the mediation itself all occurred less than three weeks before the commencement of the trial. The appellant counter-offered during that same period and attended the mediation.

[48] There is also no evidence that the insurer did not participate in the mediation in a meaningful way. The trial judge assumed that because the insurer's counsel advised that his client was "not interested" in settling the case, the insurer's subsequent participation in the mediation was "a sham". The assumption was unwarranted. A firm position strongly put going into mediation does not preclude meaningful participation in the mediation. In any event, the insurer had made a settlement offer which was not revoked before trial.

[49] The appellant's submission that the settlement privilege effectively prevents any inquiry into the conduct of the parties during the mediation raises an interesting legal issue. I need not get into that issue. The respondent failed to adduce any evidence as to the manner in which the mediation proceeded and relied entirely on the insurer's indication that it was not interested in settling the claim some three weeks before trial. If the respondent wanted costs for the insurer's failure to participate in the mediation, it was incumbent on the respondent to lead evidence establishing the failure to participate in the mediation. Had the respondent attempted to do so, the question of the impact of the settlement privilege on the admissibility of evidence relevant to the insurer's participation in the mediation may have come front and centre. On this record, the trial judge's finding that the insurer did not participate in the mediation fails, not because the settlement privilege cloaks the mediation in confidentiality, but because the factual finding of the trial judge has no support in the evidence.

[50] In ordering the costs sanctions under ss. 258.5 and 258.6, the trial judge was also influenced by what he saw as the insurer's attempt to intimidate the respondent by refusing to make a counter-offer after the respondent's last offer. The trial judge described the insurer as risking a trial for the sake of $50,000, the difference between the two offers. [page267]

[51] Insurers, like any other defendant, are entitled to take cases to trial. When an insurer rejects a plaintiff's offer and proceeds to trial, the insurer risks both a higher damage award at trial and the imposition of substantial indemnity costs after the date of the rejected offer. Both risks came to pass in this case. The insurer paid a significant financial penalty for its decision to proceed to trial. The costs provisions in ss. 258.5 and 258.6 do not address those risks, but instead address the failure to meet the specific obligations identified in those provisions. The trial judge's assumptions about the insurer's motivation for rejecting the respondent's offer and proceeding to trial had no relevance to the determination of whether augmented costs should be awarded under the Insurance Act provisions.

V

Conclusion

[52] I would dismiss the appeal as it relates to damages. I would grant leave to appeal the costs order, allow that appeal and reduce the costs awarded by $60,000.

[53] Success on the appeal was divided. As agreed by the parties, the respondent should have his costs of the appeal in the amount of $10,000, inclusive of disbursements and HST.

Appeal allowed in part.

Notes

[^1]: Counsel made brief reference to other issues which he indicated provided some context for his main arguments but would not, standing alone, warrant appellate intervention. I have not addressed those arguments in these reasons as, in my view, they neither have merit, nor assist in the resolution of the two issues I have addressed in these reasons.

End of Document