ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No.: 47323/05
Date: 2012-04-02
B E T W E E N:
Sandra Harte-Eichmanis and Peter Eichmanis
Gordon McGuire, for the Plaintiffs
Plaintiffs
- and -
Carmen Fernandes
William G. Woodward, for the Defendant
Defendant
HEARD: March 30, 2012
The Honourable Mr. Justice B.H. Matheson
ORDER FOR COSTS
[ 1 ] The plaintiffs sued the defendant as a result of an automobile accident.
[ 2 ] There was a jury trial held in St. Catharines for 10 days. The jury came back with its verdict on June 24, 2010. It awarded the plaintiff Sandra Harte-Eichmanis $40,000 for general damages. This was reduced to $10,000 because of the Insurance Act . All her other claims were denied, as was the claim of the plaintiff Peter Eichmanis.
[ 3 ] The plaintiff Ms. Eichmanis was claiming $500,000 and Mr. Eichmanis was claiming $75,000.
[ 4 ] On January 22, 2010 the plaintiffs offered to settle their claims for $565,000 not including costs.
[ 5 ] On February 11, 2010 the defendant made an offer to settle the claim for $252,000.
[ 6 ] Both offers were rejected.
[ 7 ] The defendant states that the plaintiffs should have realized that the claim was not worth in excess of $100,000. The defendant states that the plaintiffs should have proceeded using the summary trial procedure under Rule 76.
[ 8 ] The issue before this court is whether Rule 76.13(3)(a) should apply, or whether the court should exercise its discretion under subsection (b) of that Rule. It reads as follows:
(3) The plaintiff shall not recover any costs unless,
(a) the action was proceeding under this Rule at the commencement of the trial; or
(b) the court is satisfied that it was reasonable for the plaintiff,
(i) to have commenced and continued the action under the ordinary procedure, or
(ii) to have allowed the action to be continued under the ordinary procedure, by not abandoning claims or parts of claims that do not comply with subrule 76.02(1), (2) or (2.1).
[ 9 ] Justice Whalen in a similar case Dennie v. Hamilton , 2008 5964 (ON SC) , 2008 CarswellOnt 830 , stated at para. 37 :
This was not a simple case that was conducive to the simplified procedure regime. The injury sustained was complex and required considerable investigation by experts in a variety of fields. The viva voce testimony of many of these experts was necessary, both in order to understand the physical and psychological components and to assess them. Assessing damages in this case was not easy. But for the surveillance evidence, the award might have been much higher. Had the plaintiff’s counsel commenced the action under the simplified procedure Rule, he would probably have been professionally negligent.
[ 10 ] In the case at bar, which lasted some nine days, a number of expert witnesses were called by both sides. It was a complicated and complex case. The defendant had made an offer of some $252,000. By that offer the defendant realized that the trial had to take place in the regular court. To do otherwise would have put the plaintiffs’ lawyer at risk of professional negligence.
[ 11 ] In addition, if one looks at the number of hours that the defendant put in on this case, one can easily find that the defendant felt that this was a complex case.
[ 12 ] One cannot crystal ball gaze in hindsight.
[ 13 ] Therefore, I find that the plaintiff was correct in proceeding the way she did.
[ 14 ] The next issue to decide is whether the defendant is entitled to costs on a substantial indemnity basis.
[ 15 ] Rule 49.10 (2) states the following:
Where an offer to settle,
(a) is made by a defendant at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the plaintiff,
and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.
[ 16 ] Justice Brown in 3574423 Canada Inc. v. Baton Rouge Restaurants Inc ., 2012 ONSC 296 , stated at para. 8 :
Although Rule 49.10(2) of the Rules of Civil Procedure does not speak in terms of awards of substantial indemnity costs to defendants who “better” their offers to settle when the plaintiff’s action is dismissed, the BRRC Defendants submit that the case law entitles a court to make such a discretionary award. Yes and no. The decision of the Court of Appeal in St. Elizabeth Home Society v. Hamilton (City) re-iterated that substantial indemnity costs are only awarded in “rare and exceptional cases”, and that it would be an error for a trial judge to rely on offers to settle to award successful defendants substantial indemnity costs absent conduct by a plaintiff which supported a finding of reprehensible conduct. As I stated above, I do not regard the conduct of the plaintiff as egregious or reprehensible, therefore I see no basis for an award of substantial indemnity costs in favour of the defendants.
[ 17 ] This case was conducted in a manner that did credit to counsel. There was no suggestion of any improper conduct by either party. It was hard fought and the result was very favourable to the defendant. I see no reason to award costs on the substantial indemnity basis. I exercise my discretion in that direction.
[ 18 ] The plaintiffs are entitled to their costs up until the time of the offer made by the defendant on February 11, 2010.
[ 19 ] The plaintiffs are claiming total fees based on 140 hours. Counsel at the trial is a very experienced lawyer and has been a lawyer for some 34 years. He had a junior lawyer who could have done more of the preliminary work.
[ 20 ] I am going to reduce the number of hours asked for by the plaintiffs, for the reason that the plaintiffs should have used lawyers that would attract a lower fee and my feeling that there was too much time spent in the initial preparation of this matter.
[ 21 ] Therefore, the plaintiffs’ legal fees are fixed at $22,000 plus GST. The disbursements are left at the amount claimed at $11,309.60 inclusive of GST.
[ 22 ] The defendant will be awarded partial indemnity legal fees from the time of the offer.
[ 23 ] The defendant’s lawyers put a large amount of time on this case. I felt that it was warranted particularly as it got closer to trial and the plaintiffs did not move from their original position.
[ 24 ] Therefore, I would award the defendant on a partial indemnity basis after a nine-day trial the sum of $48,000 inclusive of GST, and disbursements of $20,203.61 all inclusive. That also includes the motion with respect to costs.
Matheson, J.
Released: April 2, 2012
COURT FILE NO.: 47323/05
DATE: 2012-04-02
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Sandra Harte-Eichmanis and Peter Eichmanis Plaintiffs - and – Carmen Fernandes Defendant ORDER FOR COSTS Matheson, J.
Released: April 2, 2012