Court File and Parties

Court File No.: 06-23974
Date: 2012-03-12
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nicola Zefferino, Plaintiff

AND:
Meloche Monnex Insurance Company, Defendant

BEFORE: R.B. Reid, J.

COUNSEL:
L. Ferro, Counsel, for the Plaintiff

R. D. Rollo, Counsel, for the Defendant

HEARD: September 28 and 29, 2011

COSTS ENDORSEMENT

[ 1 ] The plaintiff brought a motion for summary judgment pursuant to rule 20 of the Rules of Civil Procedure. His claim was based on the alleged negligence of the defendant insurance broker in failing to properly offer optional income replacement benefit coverage to the plaintiff as part of a policy of automobile insurance. The defendant did not contest the appropriateness of the summary judgment procedure and requested that the claim be dismissed.

[ 2 ] The claim was dismissed for written reasons released January 9, 2012, and I invited the parties to make costs submissions, which have now been received.

[ 3 ] There is no disagreement between the parties that I have discretion in the awarding of costs under s. 131(1) of the Courts of Justice Act , and that I should consider exercising my discretion based on the factors set out in rule 57.01.

[ 4 ] The defendant was successful in the motion which ended the claim and seeks costs on a substantial indemnity scale. It notes that the former rule 20.06(1) presumptively requires substantial indemnity costs unless the court is satisfied that the bringing of the motion by the plaintiff was reasonable. In addition, the defendant notes that it made two rule 49 offers to settle, dated February 19, 2009 and April 28, 2011, both of which offered to have the matter dismissed without costs provided that the offers were accepted within a certain time. The second offer was in effect at the date of the motion hearing and provided that, if the offer was not accepted by April 29, 2011, the defendant would require costs “to be paid to the defendant as agreed or assessed.”

[ 5 ] The plaintiff seeks an order that there be no costs awarded. This is on the basis that the matter raised a novel issue of some broad public importance, and that access to justice would not be achieved where the potential for adverse costs awards creates a disincentive to bring such claims, and further that the resources of the plaintiff as compared with those of the defendant should be considered.

[ 6 ] In the alternative, the plaintiff submits that if costs are awarded to the defendant, they should be in a reduced amount based both on the plaintiff’s reasonable expectation of costs and the unreasonableness of the defendant’s bill. As well, the plaintiff submits that success was divided, in that the plaintiff was able to establish the breach by the defendant of the standard of care, but was unable to link the breach to damages.

[ 7 ] Dealing first with the defendant’s submissions, I acknowledge that costs usually follow the event. As to the proper scale of costs, the current version of rule 20.06 does not support the presumptive award of substantial indemnity costs that the former rule contained. In this case there was no indication that the plaintiff had acted in bad faith for the purpose of delay in bringing the summary judgment motion. It did not in fact delay proceedings, in that the motion was brought at the opening of trial, and as it turns out the motion eliminated the need for a trial. There is no evidence that the plaintiff acted unreasonably in bringing the motion.

[ 8 ] The rule 49 offers to have the action dismissed without costs were not current when the motion was heard. The April 28, 2011 offer that the action be dismissed with costs “to be paid to the defendant as agreed or assessed” does not trigger the costs consequences of rule 49.10 because the term as to costs is not clear as to the applicable scale of costs, and until this costs order is made, it cannot be clear that the defendant has obtained a judgment as favorable as the offer. The defendant has not satisfied its burden under rule 40.10(3) to establish that the judgment is as favorable as the terms of the offer.

[ 9 ] As to the plaintiff’s arguments about the novelty of the claim and the public importance of the issue, it is true that the question of whether or not the defendant’s representative properly offered the optional income replacement benefit coverage to the plaintiff within the meaning of the statute was novel. The plaintiff was successful on that point. However, the plaintiff was unsuccessful on the more prosaic question of whether or not he would have availed himself of the offer if it had been made properly. In short, the plaintiff failed to meet one of the basic requirements of a negligence claim, namely that he prove his damages. Under those circumstances, I do not consider that the defendant should be required to bear its own costs given its success. Put another way, the plaintiff should not be relieved of costs consequences by his success in the novel part of its claim when he failed in the more mundane, predictable and ultimately determinative portion.

[ 10 ] As a result, the defendant will have its costs from the plaintiff on a partial indemnity scale.

[ 11 ] The defendant seeks $59,573.71 in partial indemnity costs plus HST and disbursements for a total of $67,318.79.

[ 12 ] The plaintiff submits that the defendant’s bill is excessive and that the plaintiff should not have to pay costs beyond what he could reasonably have expected. However, the plaintiff has not submitted the amount of his own costs – either in dollars or in hours spent by counsel, so there is no basis for me to compare the defendant’s hours or rates with those of the plaintiff which would have given a good indication of the plaintiff’s expectations.

[ 13 ] Although the plaintiff submits that the hours claimed by the defendant in its Bill of Costs are unreasonable, the plaintiff does not provide any reasons to support those submissions.

[ 14 ] It is not appropriate in my view to consider the suggested relative ability of the parties to bear costs. To do so except in unusual circumstances would unfairly skew the costs-shifting principle of indemnity set out in the Rules of Civil Procedure.

[ 15 ] I find no reason to reduce the defendant’s costs claim except for the argument about divided success. Although the decision was ultimately against the plaintiff, it is true that on the first two elements of the negligence claim, that is establishing a duty of care and a breach of the standard of care, the plaintiff was successful. A substantial amount of time in the argument of the motion before me revolved around those issues. As a result, I am reducing the defendant’s partial indemnity costs claim by about 25%.

[ 16 ] I therefore award costs to the defendant payable by the plaintiff in the sum of $50,000 inclusive of HST and disbursements.

Reid J.

Date: March 12, 2012