COURT OF APPEAL FOR ONTARIO

DATE: 20231110 DOCKET: C70249

Doherty, Pepall and Zarnett JJ.A.

BETWEEN

Nicholas Treiers Plaintiff/Appellant (Respondent on Cross-Appeal)

and

Michael Kmith and A1 On One Home Care Inc. Defendants/Respondents (Appellants on Cross-Appeal)

Counsel: Chad M. Leddy and Susan E. Gunter, for the appellants on cross-appeal Bruce Chambers, for the respondent on cross-appeal

Heard: November 2, 2023

On appeal from the order of Justice Jonathan Dawe of the Superior Court of Justice, dated December 31, 2021, and reported at 2021 ONSC 8536; and an application for leave to appeal from the costs order, dated April 7, 2022, and reported at 2022 ONSC 2145.

REASONS FOR DECISION

[1] The appeal in this matter was abandoned; only the cross-appeal was pursued. In these reasons, we will refer to the cross-appellants as the defendants and the respondent as the plaintiff.

[2] The plaintiff was injured when he was struck by a vehicle driven by the defendant, Michal Kmith. He sued, alleging negligence. The trial judge determined that the defendants were entirely responsible for the accident. He further held that the plaintiff had failed to show he had suffered “a permanent and serious injury”, meaning that the plaintiff could not recover non-pecuniary damages under the relevant provisions in the Insurance Act. The trial judge held that the plaintiff could recover for lost income and he fixed that loss at $1,680. The plaintiff had sought damages of $425,000 in his Statement of Claim and had claimed approximately $300,000 at trial. The plaintiff was awarded costs of the action in the amount of $40,000.

[3] The defendants raised two issues on appeal. First, they submit the trial judge wrongly allowed the plaintiff to amend his claim at the end of trial to include a lost income claim. Second, the defendants seek leave to appeal the costs order made by the trial judge. They submit the trial judge wrongly placed a burden on the defendants to make an offer to settle that would have addressed the lost income claim, despite the fact that the claim was not expressly articulated or advanced until the end of trial. The defendants further submit that the costs award of $40,000 is grossly disproportionate to the minimal recovery achieved by the plaintiff.

The Pleadings Issue

[4] At the end of the trial, the plaintiff moved to amend the claim and add the claim for lost income. The trial judge did not require the plaintiff to make a formal motion, but instead required the parties to address the issue in written submissions. He ultimately made the amendment requested.

[5] In his pleadings, the plaintiff claimed special damages and “out-of-pocket” expenses. Neither were particularized. In the responding Statement of Defence, the appellants included a specific denial of any loss of income by the plaintiff. On the pleadings, it seems fair to say that a lost income claim was potentially in play. However, as the trial judge noted in his reasons, going into the trial, the special damages had been particularized as consisting of $75,000 in out-of-pocket expenses. That claim was abandoned at trial, hence the need for an amendment to claim loss of income as special damages.

[6] The plaintiff was questioned during his discovery about his lost income, which he attributed to the accident. Prior to trial, the plaintiff’s counsel provided the defence with documentation laying out the lost income claim. The plaintiff was cross-examined at trial on matters relating to lost income.

[7] In light of the pleadings, and the proceedings prior to and at trial, it was open to the trial judge to conclude that the defence would not be prejudiced by the granting of the plaintiff’s late request for an amendment to include a specific lost income claim. The defendants were able to fully meet and largely defeat the lost income claim. The trial judge made no reversible error in exercising his discretion to permit the amendment. The finding of liability and the damages awarded by the trial judge stand.

Costs

[8] The plaintiff sought costs of $55,000. The trial judge ultimately awarded costs in the amount of $40,000. These costs did not include an amount awarded for a pretrial motion to strike the jury. The costs of that motion are not in issue on this appeal.

[9] In fixing the appropriate costs, the trial judge put considerable emphasis on what he described as the defence failure to make any offer to settle the claim, other than an offer based on an outright dismissal of the action. The trial judge viewed that offer as a demand for surrender.

[10] In considering the defence failure to make an offer involving some payment by the defence, the trial judge did not take into account the manner in which the lost income claim, the only successful claim, evolved in the course of the proceedings. Although the trial judge found the defence was not prejudiced in its ability to defend a loss of income claim, and therefore granted the amendment at the end of trial, still, an amendment was necessary for the claim to be adjudicated. The specific exposure to the lost income claim and the potential for that claim to generate even a relatively small award, could reasonably have been apparent to the defence only at the end of the trial. Consequently, the defence did not have a realistic opportunity to make an offer to settle before trial that could have taken into account an award based exclusively on potential lost income. As this trial unfolded, there are no grounds to criticize the defence for failing to make an offer that would have reflected an award based only on lost income.

[11] The trial judge’s error impacted on his costs award and warrants granting leave to appeal costs.

[12] Given the minimal success achieved by the plaintiff, and bearing in mind that even that amount was generated by a claim first clearly articulated at the end of the trial, we accept the defence submission that there should have been no costs ordered at trial.

[13] Leave to appeal costs is granted and the trial order is varied to an order providing for no costs on the trial.

[14] The defendants were successful on the costs portion of their appeal. The parties agree that the defendants should have their costs of the appeal in the amount of $10,000, inclusive of relevant taxes and disbursements.

“Doherty J.A.”

“S.E. Pepall J.A.”

“B. Zarnett J.A.”