Barrie Court File No.: 09-0289
Date: 2012-08-24
Ontario Superior Court of Justice
Between:
Alexandre Beland, Plaintiff
– and –
Brian Edward Hill, Heidi Natashja Elizabeth Jokela and Frances Karen Jokela, Defendants
Counsel:
B. Kahler and G. Will, for the Plaintiff
M. Forget and A. Dix, for the Defendants
Heard: August 13, 2012
Reasons for Decision on Costs
Howden J.:
[1] The plaintiff Alex Beland claimed in this action the total sum of $2,500,000 for general damages, out-of-pocket expenses, past and future income loss, future care costs, and household assistance cost arising from a road accident on July 12 2008.
[2] The claim alleged two grounds for relief: (i) statutory breach of the Dog Owners Liability Act (DOLA) and (ii) negligence of the defendants in training and supervising and controlling their dog, a female Doberman-Pinscher as the cause of the accident. His immediate physical injuries were significant: fractures to both elbows, fractured bones in both wrists and a dislocated shoulder. Later his back became symptomatic and the role of the accident in the continuing allegations by Mr. Beland of chronic back pain and loss of his paramedic job as a result became a major point of contention in the trial. The fractures healed with time though never completely nor without periodic weakening of his arm joints.
[3] After a trial of 17 days, the jury found no liability under the DOLA or in negligence. The jury did assess damages in the following amounts:
General damages $ 25,000.00
Past income loss $ 75,000.00
Future income loss $190,000.00
Future Care cost $ 0.00
Special damages $ 8,300.00
Total assessment $298,300.00
[4] The evidence of Alex Beland and Heidi Hill, the only two parties who were at the accident scene at the material time, was as different as night from day on the issue of the role played, if any, by the defendants’ Doberman. As I said to the jury, their evidence as to how the accident happened was in conflict to the extent that the only conclusion was that one of the two was “not levelling with” the jury. According to Mr. Beland, the dog came onto the road without warning from the tree-fronted property to his right owned by the defendants. He said the dog came at him in an apparent attempt to attack him and in order to avoid the dog, Mr. Beland had to apply the brakes while travelling at some 45 kph, catapulting him over the handlebars and onto the paved road. According to Ms Hill, her dog never left her property and was circling her as she walked down the driveway at least some 30 feet from the nearest edge of the road when Alex Beland fell off his bicycle. She said he looked up at them when her dog barked and lost control on his own. Based on the jury verdict, on motion by the defendants’ counsel, I dismissed the action against the defendants.
[5] The applicable statutory framework within which this claim for costs is to be dealt with is contained in the following from the Courts of Justice Act, R.S.O., chap. C.43 and the Rules of Civil Procedure.
Courts of Justice Act
131.(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid. R.S.O. 1990, c. C.43, s. 131 (1).
Civil Rules
49.13 Despite rules 49.03, 49.10 and 49.11, the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer. R.R.O. 1990, Reg. 194, R. 49.13.
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1); O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.
Fixing Costs: Tariffs
(3) When the court awards costs, it shall fix them in accordance with sub-rule (1) and the Tariffs. O. Reg. 284/01, s. 15 (1).
[6] Mr. Forget, counsel for the defendants, submits that the defendants are entitled to costs on a substantial indemnity scale, not the lower partial indemnity scale. He bases this claim on two factors: the offers rejected by the plaintiff and the conduct of the plaintiff. On a substantial indemnity scale, the defendants claim a total of $294,121.41. This is made up of:
Fees (HST not included) $270,992.50
Disbursements (HST not included) $ 23,128.91
Total (without HST) $294,121.41
With tax and one small tax-exempt item included, the total costs claimed are 332,401.19.
[7] The defendants offered to settle the action for $ 25,000 in May 2011. Nine days before counsel opened to the jury, on May 15, 2012, the defendants made a second offer to settle, this time for the all-inclusive sum of $75,000. In both instances, I am told, the plaintiff’s disbursements and accounts owing in this action totalled more than the amounts offered. Both offers were in writing and were delivered in accordance with rule 49.10(2). The plaintiff accepted neither offer.
[8] The plaintiff on the day of the pre-trial conference on December 10, 2010 offered in writing to settle the action for $990,000 plus partial indemnity costs slightly below the defendants’ general liability limit of $1 million. The defendants did not accept it. The pre-trial brief for the plaintiff set out his claims as then totalling $3,071,853. Mr. Forget relies on the decision of the Ontario Court of Appeal in S. & A. Strasser Ltd. v. Richmond Hill (Tn.), 1990 CanLII 6856 (ON CA), [1990] O.J. No. 2321 which was later interpreted by Fedak J. in Tilker v. Canada Life Casualty Insurance Corp’n., 2002 CanLII 2714 (ON SC), [2002] O.J. No. 2873 (SCJ) at para. 27:
- Specifically the court ruled that where a plaintiff rejects an offer to settle, and his action is subsequently dismissed, the defendant is entitled to its costs on a partial indemnity scale up to the date of the offer and on a substantial indemnity scale thereafter.
[9] I will return to this point later as I do not see Strasser as standing for this general proposition. The Strasser judgment certainly indicates that the court has the jurisdiction to exercise its discretion in this way under s.131 of the Courts of Justice Act after considering the factors in rule 57.01 but not that entitlement to the higher scale becomes automatic on dismissal of a plaintiff’s claim after rejecting a defence offer. It holds clearly that rule 49.10 has no application where the plaintiff fails to recover any judgment (Strasser, at para. 4).
[10] As to conduct of the plaintiff, Mr. Forget submits that the jury verdict confirmed his and his clients’ view that Mr. Beland lied about the events at the accident scene and that he misrepresented himself and some of his medical history post-accident. He knew or should have known the risks of proceeding to trial, and having rejected both offers from the defendants and having put them through a difficult and hard-fought trial, he should face substantial indemnity costs from the date of the first offer on November 8 2011. Mr. Forget submitted that he has drafted a bill of costs within the general principles established in Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 – namely, that the objective is to fix an amount that is fair and reasonable and within the legitimate expectation of the losing party to pay, and not an amount fixed by the actual costs incurred by the successful litigant (at para. 26).
[11] For the plaintiff, Mr. Kahler first responded to Mr. Forget’s submission regarding the plaintiff’s conduct and rejection of the defence offers. He argued that the credibility finding made by the jury was not unlike credibility findings that are necessary in most civil trials. It is incorrect to treat the plaintiff’s claims and the verdict as if he had committed fraud. This was a motor vehicle case and fraud was never part of it, nor was the corresponding principle of costs that a failed fraud allegation normally attracts the higher scale of costs. As the jury did make a sizeable damage assessment, they must have accepted some of the plaintiff’s evidence.
[12] The submission on behalf of the plaintiff is threefold:
(i) that the defendants and their counsel engaged, in a pattern of conduct whereby relevant documents and information were not disclosed at all or in an incomplete form before trial, thus impairing the ability of the plaintiff and his counsel to properly and fully assess and prepare the case before trial; at trial seven documents were introduced during cross-examinations by Mr. Forget as well as a surveillance report covering some 180 hours of the plaintiff’s activities. The plaintiff and counsel had never seen or received notice of their content before;
(ii) that due to the conduct in (i) above and the failure of the defence to provide an offer with some element of compromise in it, on a $3 million case with some medical and accounting evidential support, each party should bear their own costs; in the alternative, if costs are awarded, they should be on a party and party scale and reduced by 60%; and
(iii) that disbursements claimed for travel expense to Barrie and for hotel accommodation during the trial for out-of-town counsel and for defendants’ lost wages during the trial should be disallowed.
[13] Mr. Kahler’s grounds for depriving the successful parties of costs related to the following instances at trial. The evidence that he claimed was not fully disclosed by the defendants before trial included the notes of the veterinarian who treated the dog in question before and after the accident, the refused inspection of the plaintiff’s property and subsequent disclosure of prior disposal of the entire security collar apparatus in use by the defendants around the time of the July 12 2008 accident but not in use at the time it happened, the surveillance records, and the following exhibits introduced without notice during the cross-examination of Mr. Beland: Ex. Nos. 5,7,8,10, as well as Ex. 12, 23, 24, and 31 during subsequent cross-examination of the defendants’ witnesses. He argued that the cumulative effect of this pattern of conduct was that the plaintiff and his counsel were not able to properly assess and prepare the case for trial without full and proper disclosure.
[14] Mr. Kahler cited the case of Parent v. Leach, [2008] O.J. No. 2304 (SCJ) as the most recent authority on the issue of scale of costs where the successful party’s pre-trial offer contained nothing substantive for the plaintiff . In Parent, the offer made shortly before trial “did little more than allow the plaintiff to escape the action without cost”. In this case, I am advised that the defendants' last offer would not have gone that far – it would not have covered the total owed in disbursements by the plaintiff on the eve of trial. On the plaintiff’s behalf, he requested not only denial of costs entirely and costs at the higher level, but a 60% reduction on account of the highly prejudicial effect of the defendants’ conduct in withholding information and documents that the plaintiff’s counsel needed to know in order to properly prepare and advise their client. In doing so, he referred to Kielt v. Gawne, [1993] O.J. No. 2570 (SCJ) where costs were denied a successful defendant on account of the withholding of a most relevant witness’s name and evidence and of the change in recollection by another witness to accord with the defendant’s version of events.
ANALYSIS
1. Scale of Costs
[15] The defendants rely first on the failure by the plaintiff to accept the defendants’ offers, causing a lengthy trial to take place following which the plaintiff’s action was dismissed. He cited Strasser and Tilker and other trial decisions which followed Strasser as upholding the entitlement to costs on a substantial indemnity level from the date of the offer where the unsuccessful party had rejected a pre-trial offer and had its case dismissed.
[16] The first point that should be made is that I think that Strasser has been misinterpreted and does not stand for the bald proposition enunciated in Tilker. I also find that this view of Strasser has been overtaken by later decisions of the Ontario Court of Appeal, most recently in Davies v. Clarington (Mun.), 2009 ONCA 722, [2009] O. J. No. 4236.
[17] In Strasser, the trial judge had awarded solicitor/client costs (the higher level then) to the successful defendants from the commencement of the action. Carthy J.A., for the Court, held that the rationale for rule 49.10 could not apply where the plaintiff is totally unsuccessful because even without rule 49.10 a successful defendant would be entitled to party/party costs. He ruled :
That rationale does not fit a case where the plaintiff is totally unsuccessful because, without the rule, the defendant is normally entitled to party and party costs. The words ‘and the party obtains a judgment as favourable’ make it clear that the rule (rule 49.10) has no application where the plaintiff fails to recover any judgment.
[18] This ruling remains the law as far as it goes. See Schwark Estate v. Cutting, 2010 ONCA 299, [2010] O.J. No. 1728 (O.C.A.) (at para. 6).
[19] The Court in Strasser went on to point out that in such cases, the relevant rules were 49.13 and 57.01(1): “…the court may consider, in addition to the result of the proceeding and any offer to settle…” It then made the point that the fact the claim had reduced to $70,000 from $1,000,000 shortly prior to trial and that the trial judge found the plaintiff’s credibility fatally flawed were not unusual enough to attract the imposition of the higher costs penalty for the entire proceeding. The Court held that:
1 However, I do see reason for a bonus in making an offer of $30,000 in the face of a claim which subsequently reduced itself to $70,000 and resulted in a dismissal of the action. That bonus should be related to the offer and its date and, based upon the general principles enunciated in rule 57.01, I would award solicitor-and-client costs to the defendant following the date of the offer and party-and-party costs up to that date.
[20] Nowhere in Strasser does the court articulate the general proposition for entitlement that Tilker attributed to the Court’s decision in Strasser.
[21] The Ontario Court of Appeal revisited Strasser in Davies v. Clarington (Mun.), supra. At para. 28, the Court in Davies reiterates the general rule for imposing the higher level of costs:
28 The first issue is whether the trial judge erred in relying on the February 2005 offer as justification for an elevated costs award. This court, following the principle established by the Supreme Court, has repeatedly said that elevated costs are warranted in only two circumstances. The first involves the operation of an offer to settle under rule 49.10, where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction.
[22] The Court in Davies went on to reinterpret Strasser in line with its finding in Scapillati v. A. Potvin Construction Ltd., (1999) 1999 CanLII 1473 (ON CA), 44 O.R. (3d) 737 by stating that,
40 In summary, while fixing costs is a discretionary exercise, attracting a high level of deference, it must be on a principled basis. The judicial discretion under rules 49.13 and 57.01 is not so broad as to permit a fundamental change to the law that governs the award of an elevated level of costs. Apart from the operation of rule 49.10, elevated costs should only be awarded on a clear finding of reprehensible conduct on the part of the party against which the cost award is being made. As Austin J.A. established in Scapillati, Strasser should be interpreted to fit within this framework - as a case where the trial judge implicitly found such egregious behaviour, deserving of sanction.
[23] Applying the law as settled in Davies to this case, I do not find that the mere fact that the jury has not found in favour of Mr. Beland, or that his credibility was in issue and on liability was rejected, sufficient to impose the sanction of the substantial indemnity costs scale on him. He put his credibility on the line and the jury found against him like many other cases. I accept that Mr. Beland over-sold himself at times to assessors and exaggerated symptoms and failed to share relevant information about his conduct during his recovery but this to me does not fall within the reprehensible conduct necessary to support the highest scale of costs.
[24] There is another aspect to the issue of whether this is a case warranting substantial indemnity costs. I find that, for reasons similar to those of Lederer J. in Parent v. Leach, supra, the final offer made by the defendants lacked anything substantive for the plaintiff beyond paying most but not all of what he owed third parties to that date on account of this action. In Data General (Canada) Ltd. v. Molnar Systems Group, 1991 CanLII 7326 (ON CA), [1991] O.J. No. 1857, Morden J.A., writing for the Court, held that an element of compromise is not an essential element of an offer to settle but its absence can be a relevant factor in ordering not to award costs on a substantial indemnity scale. However Data General was decided in the context of a rule 49.10 offer. In three recent trial decisions, one being Parent, the reasonableness of the offer by the successful defendant was considered to be relevant to the entitlement and quantum of costs even though the offer did not come within rule 49.10.
[25] In my view the provisions of rule 49.13 and the introductory words in rule 57.01(1) as cited in Strasser support this view. In Andriano v. Napa Valley Plaza Inc. [2011] ONSC 2168 (SCJ), the motions judge considered the reasonableness of the defendant’s efforts to settle the matter as well as some negative aspects of the plaintiff’s conduct. The judgment concluded: “This award recognizes the defendant’s effort to settle and strikes a balance between partial indemnity and substantial indemnity while discounting for excess time” (at para. 14). In St. Elizabeth Home Society v. Hamilton (City), [2010] ONCA 280, the Court of Appeal recognized the relevance of whether there was some element of compromise in the respective offers of the parties but it rejected that factor as an independent ground for awarding substantial indemnity costs without conduct sufficiently serious to warrant that sanction.
[26] In Parent v. Leach, supra, the plaintiff’s action was dismissed and the defendant had made an offer of $100,000 inclusive of interest and costs on a partial indemnity basis to the date of the offer. The defendant in that case, as here, submitted that he should have costs on a substantial indemnity basis from the date of the offer and partial indemnity before. It was clear to the trial judge that rule 49.10 did not apply because the plaintiff had not recovered any judgment. Lederer J. dealt with the claim in the following terms:
19 The plaintiffs have sued their broker and the firm with which he worked. They were unsuccessful. As a result, they will be ordered to pay costs. However, to suggest that they ought reasonably to have anticipated having to pay costs in the amount requested is asking for too much. Hindsight, it could be said, is perfect. Looking back and, with the benefit of today's understanding, telling people how they should have understood events, in the past, is easy. It is not a basis on which we can fairly determine what was reasonable at the time. Sometimes, a trial will provide a better understanding of what took place. An independent decision-maker can provide a more balanced perspective.
20 I have no doubt that the plaintiffs honestly felt that this action was justified. It took a trial to sort out the facts. The clearer understanding of what took place on October 12, 2000 is one example.
21 The impact of an award in the amount of $583,723.83 would, in this case, do more than "discourage frivolous or unnecessary litigation". It would have a "chilling effect" and those intimidated by the risk would lose the benefit of the process the court can provide.
22 In the circumstances of this case, I find that the settlement offer made does not justify an award of costs, from the date of the offer, on a substantial indemnity scale. A settlement is supposed to be an accommodation which allows the parties to agree to resolve their differences without going to trial. Whether the broker had breached its duty to the client was the fundamental issue at trial. This is a question of liability. Had the plaintiffs been successful, they would be entitled to damages which, if proved, could be substantial, but since they failed, the action was dismissed. In this case, the offer made did little more than allow the plaintiff to escape the action without cost. If the plaintiffs' failure to accept causes the scale of costs to rise, its effect would be to increase what the plaintiffs should reasonably expect to pay in costs. Its impact would be to increase the intimidation factor and to make more likely the chilling effect. This may be one explanation why the cost consequences of a failure to accept a settlement offer, as outlined in Rule 49.10, do not extend to a dismissal of the action. In the circumstances of this case, before a settlement offer should be permitted to increase the scale of costs, it should have provided something substantive to the plaintiffs. I mean by this, more than a mere escape. Otherwise, the offer is not being used to find an accommodation; it is being used to make it more likely that the plaintiffs will not proceed for fear of what will happen if they fail rather than from a conviction that they cannot reasonably expect to succeed.
[27] Lederer J. found that there was:
No reason to doubt that the time referenced was spent. The rates, given the experience of counsel, are not inappropriate. Taking into account the volume of material, the lengthy history to be considered and the significance of the case to the client, it was appropriate for senior counsel to utilize the assistance of more junior lawyers.
[28] In the result, substantial indemnity costs were rejected in that case principally due to the lack of anything substantive in the offer to the plaintiff. Apparently there was no ground in the conduct of the case to warrant the penalty of substantial indemnity costs. In this connection, I should note that this case was decided before the more recent re-statement of the limited grounds for awarding substantial indemnity costs in Davies, therefore there is no mention of Davies as an additional ground for refusing the higher costs scale.
[29] Similarly in this case before me, there was nothing in the defendants’ offers that provided anything substantive to the plaintiff. This is not the case that Morden J.A. was concerned about in dealing with the “element of compromise” in Data General where he wrote of the potential uncertainty as to whether or not an offer qualified if compromise was an absolute requirement. Here, as in Parent, there was nothing offered for the plaintiff beyond disbursements and the last offer did not even cover them. Neither offer provided more than an escape; they simply reduced the plaintiff’s indebtedness for action-related disbursements.
[30] There is of course no reason why the defendants cannot play hardball in this way and by failing to be forthcoming with information and documents which were held back until the eve of, or during, trial, as I will deal with in the next section of this judgment. But in awarding costs, I see no reason in fact or law to reward the defendants with the bonus of costs at the substantial indemnity level. This was by no means a slam-dunk as matters stood before trial and even after the evidence was in, it was still a live issue whether fault would be divided between the parties. I did not accept the one-note view of the facts that Mr. Forget represented; the action in negligence always had the potential for a division of liability in my view, though not necessarily in the plaintiff’s favour. The verdict indicates that the jury found either that the plaintiff did not meet the burden of proof on the liability issues or they took a more categoric view and rejected the plaintiff’s account entirely. The assessment of damages by the jury indicates the former. I am persuaded by the reasoning of Lederer J. in Parent the defendants’ claim for costs on the substantial indemnity scale is rejected. As well, the plaintiff’s case for no order has no support in law or in fact.
2. Conduct that Tended to Shorten or Lengthen Unnecessarily the Duration of the Proceeding
[31] The other troubling issue in this case concerns the non-disclosure of the following documents or records and refusal of the property inspection, all of which formed undertakings by counsel and were not met in full or in a timely manner before trial. They are: the “Training Programmes” brief; the records of the treating veterinarian regarding the defendants’ dog before and after July 2008; the failure of the defendants to fulfill their undertaking prior to trial to provide the plaintiff’s expert witness an opportunity to inspect their property; and the content of the surveillance videodisc recorded in 2010 after the examinations for discovery but which was raised during discovery.
[32] The Training Programmes brief was introduced without notice of any kind in front of the jury by Mr. Forget during his cross-examination of Mr. Beland. He put to Beland that he was doing high intensity training because the exercise records referred to the word “Tabata” and in the brief, which was simply taken off the internet but, unlike the documents referred to earlier, this record had nothing to do with Mr. Beland and was just one of many documents describing various training programmes including the particular writer’s own notions of what Tabata was. In the brief, it was described as a high intensity training programme without exception. Mr. Beland was simply saying that all he understood by Tabata was what he did and that was doing an exercise modified to fit within his capability, taking a break, then repeating it, then another break, and so on. It was not a rapid-fire series of high intensity moves separated by brief breaks. In the absence of the jury, I heard from both counsel. The difficulty for the plaintiff ‘s counsel was that this document came out of the blue; it had never been disclosed, and therefore he could not object before Mr. Forget had begun to put it to the witness as if there was only one form of Tabata and that was the high intensity variety. The document was only one of many on the internet on training programmes and has no authoritative value of which I am aware. And it had nothing to do with what the witness said he was doing. The exercise records referred at one point to “Tabata”. Mr. Forget argued, as he did in each of these troublesome instances, that he could introduce whatever he liked provided it was relevant to the issues and, if it was to impeach the witness, no notice was required.
[33] The argument on the admissibility of the Training Programmes brief did not take more than a few minutes. It was not referred to by the plaintiff’s counsel in their submissions on costs. I mention it because it was an indication of more time-consuming and problematic issues to come with the surveillance and the veterinary records, both of which formed undertakings by the defendants’ counsel during the examinations for discovery that I can only say were honoured in the breach.
[34] On July 27, 2009, the defendant Heidi Hill was examined for discovery. She gave an undertaking, as did her counsel, to produce the veterinarian records for treatment of Cinnamon, the dog alleged to be involved in this action. What was produced was an edited version of the notes which ended at July 12, 2008. The undertaking was not limited in this way but required production of the full record of the veterinarian to the date of production. Only at trial did the full record appear and it contained an entry in October 2008 which indicated that the dog had in fact gone through the “invisible fence” location and probably entered the roadway. This was contrary to Ms. Hill’s clear evidence that her dog never went on the road. The veterinary record referred to a phone call on October 8, 2008 to the office indicating that the dog was lost near the hill down to the road and that shortly thereafter the screeching of tires was heard by Ms Hill and when the dog was found she had wounds which, on examination, the doctor did not consider inconsistent with the report as understood by her office assistant that the incident was an “HBC” – a short form for “hit by car”. This note was part of the veterinarian records not produced by the defendants until the trial. It was part of the full record which should have been produced to the plaintiff’s counsel within a reasonable time after the discovery and well before trial.
[35] According to the plaintiff’s counsel, the plaintiff was prejudiced at trial because the late production of the complete record meant counsel could not conduct a further examination for discovery on the contradiction between Ms. Hill’s evidence on her earlier examination that the dog had never left the property and the veterinarian‘s record and thus may have been prevented from obtaining highly relevant information on the crucial issues of liability and credibility. Mr. Forget in reply stated that all of this was before the jury. The complete record was produced at trial and counsel for the plaintiff cross-examined Ms. Hill on her failure to produce the complete record and on the apparent contradiction regarding the dog escaping onto the road on Oct. 8, 2008, before Ms. Hill’s examination for discovery. There is no indication that more timely production would have changed how counsel conducted the plaintiff’s case or the outcome of the trial.
[36] I will set out the facts of the remaining instances of purported nondisclosure and failure to fulfill undertakings as I understand them before I rule on them because part of the plaintiff’s argument is that the cumulative effect is what is objectionable.
[37] The defendants did not provide an opportunity before trial for the plaintiff’s engineering witness to inspect the property. The intent of such an inspection was to examine the site lines from the defendants’ property and to inspect the “invisible fence” which was used in training the dog. Counsel for the defendants failed or refused to permit an inspection on May 19, 2012 before the trial began and again on May 24, the day counsel opened to the jury. I made the necessary order that day, following submissions by counsel. As it turned out, it was learned that the defendants had disposed of the “invisible fence” apparatus some time before.
[38] The plaintiff submits that the defendants’ conduct in not answering the undertaking promptly meant that the time taken by the court was wasted and unnecessary. As well, counsel submits that the destruction of the “fence” prejudiced the plaintiff’s claim and may have affected the trial’s outcome.
[39] Finally, the defendants’ counsel did not reveal to the plaintiff before trial that surveillance of the plaintiff had occurred and a record made starting in April 2011. Over 100 hours of activities by the plaintiff were recorded at his home and at the cottage owned by the parents-in-law of the plaintiff. On the third day of Mr. Forget’s cross-examination of Mr. Beland, he announced his request to introduce the videodisc recording of five days, being April 30, May 1 and 7 and July 1 and 2, 2011. The plaintiffs’ counsel objected because they had had no notice of any surveillance being done nor did they ever receive from Mr. Forget a summary of its content before trial. This practice in regard to privileged documents like a surveillance record has recently developed and is referred to in Howe v. Garcia, (2008) 74 C.P.C. (6th) 119 (SCJ) and Landolfi v. Fargione 2006 CanLII 9692 (ON CA), [2006] O.J. No. 1226 (OCA). On the voir dire regarding admissibility of the surveillance, Mr. Forget stated that as long as the privileged document is used only for purposes of impeaching the witness’s evidence, he is permitted to use it at trial without any prior disclosure of its content. He relied on rule 30.09 which reads:
30.09 Where a party has claimed privilege in respect of a document and does not abandon the claim by giving notice in writing and providing a copy of the document or producing it for inspection at least 90 days before the commencement of the trial, the party may not use the document at the trial, except to impeach the testimony of a witness or with leave of the trial judge. R.R.O. 1990, Reg. 194, R. 30.09; O. Reg. 19/03, s.7.
[40] I ruled that the surveillance could not be admitted in evidence in these circumstances, relying on the duty of parties as I saw it and as set out in the Rules of Civil Procedure to provide up-dated and correcting information where there is a change in the information available which was not in the affidavit of documents and which was sought at the examination for discovery. The relevant rules are: Rule 30.07(b), 30.08 (1), 31.09(1) and (3) and 48.04(2)(b)(i) and (iv). In addition, the Ontario Court of Appeal in Landolfi dealt not only with rule 30.09 in isolation but went on to deal with the interplay of that rule with other rules.
[41] In Landolfi, the Court adopted the words of Carthy J.A. in Ceci v. Bonk (1992), 1992 CanLII 7596 (ON CA), 7 O.R. (3d) 381 at para. 9. In Ceci v. Bonk, the Ontario Court of Appeal dealt with an issue regarding pre-trial disclosure of surveillance of the opposing party. Carthy J, writing for the Court, stated that there appeared throughout the submissions to be a conflict between the purpose of the 1984 amendments to the rules and the idea that ambush tactics are preserved in rule 30.09 provided the priviled document or record is being used to impeach a witness. The Court of Appeal’s position on this important issue, which lives on in this case, is in the following terms.
9 I do not read that rule as inconsistent with the principle of full exchange of information at all stages of an action. The exception, in my view, is a simple acknowledgement that a party, unable to anticipate everything that may be said by an opponent at trial, cannot be expected to relinquish privilege and give notice of documents on the mere chance that they may be used to impeach. Any suggestion of ambush being encouraged is dispelled by the necessary inclusion of the privileged document in the affidavit of documents, the ability of the opposite party to demand particulars of its contents on discovery, and the limited use of the privileged document at trial.
10 In my view, the discovery rules must be read in a manner to discourage tactics and encourage full and timely disclosure. Tactical manoeuvres lead to confrontation. Disclosure leads sensible people to assess their position in the litigation and to accommodate.
[42] In Landolfi, the Court of Appeal had to revisit this issue. It divided the decision into the following parts under the heading Exclusion of Video Evidence: (i) Test for Admission and (ii) Disclosure of the Contents of the Video Evidence. In the first section dealing with the test for admission, the Court held with respect to rule 30.09 alone:
40 In other words, rule 30.09 precluded offering the videos as evidence of Landolfi's physical capacities, but did not foreclose the admission of the videos to challenge the credibility of Landolfi's evidence as to his physical limitations following the accident. Used for impeachment purposes, the videos had the potential to directly undermine the credibility of Landolfi's testimony concerning his physical incapacities and the further potential to undermine the reliability of the opinions formed by Landolfi's medical experts to the extent that those opinions relied on Landolfi's description of his physical incapacities.
[43] In the following section dealing with disclosure, the Court adopted the words of Carthy J.A. in Ceci, para 9 to explain the interplay between 30.09 and other rules, holding that the trial judge was correct in allowing the use of the surveillance for purposes of impeachment under rule 30.09. There was no prejudice to the opposing party because it could have used the pre-trial informational discovery process and elected not to do so.
[44] The important point to understand about Landolfi is that before trial, counsel had in fact provided to opposing counsel a summary of the content of the surveillance. What the Court was saying was, if you felt you needed more, you should have used the pre-trial discovery rules. In this case, the plaintiff could not do so because the existence of the surveillance was never disclosed.
[45] The documents which the plaintiff’s counsel referred to as having been introduced during the cross-examination of the plaintiff but never produced before trial included an internet-generated document originally put out by the government containing information about HMCS Carleton where the plaintiff had worked in his younger days well before the accident. It was introduced without objection from plaintiff’s counsel by Mr. Forget and its only significance seems to be to indicate that this was a building, not a ship, to which the plaintiff had been assigned in the summers while he was in school. He was paid for his time there and he admitted that only part of his time there was on an actual ship. He denied he worked there as a volunteer so it did not fit within Mr. Forget’s portrayal of Mr. Beland as someone who misrepresents and exaggerates reality, in this case the allegation that Beland was not really doing more than helping as a volunteer. I do not see anything of particular relevance to costs arising from it, other than its introduction with other documents without pre-trial disclosure.
[46] The same can be said of Ex. 6 and 7, records off the internet of Mr. Beland’s triathlon race results and from the Triathlon Canada website respectively, which Mr. Beland seemed quite familiar with. They came from official sources that Mr. Beland recognized as official. There was no objection to the introduction in evidence of either of these documents. These documents were as accessible to the plaintiff as they were to the defendants’ counsel if they had wished to consult them during their preparation.
[47] No objection was made to Ex. 8 being marked subject to proof. It was the exercise brief again taken off the internet containing descriptions and pictures of very fit people doing various exercises which were listed in the records of Mind To Muscle, the gym where Mr. Beland went for a lengthy programme of exercises before and after the accident. Mr. Beland continuously said that he did not do the exercises as illustrated but only in a modified form. With only two exceptions, no notation was made by the instructor to this effect regarding the many days in which these exercises were listed under Mr. Beland’s name. Ex. 12, the Canadian Securities Course, was well known to Mr. Beland before trial because he had consulted this information before he chose to take the exam for securities counselling as a career some two years following the accident. No objection was taken to this document which was available on the internet, if the plaintiff and counsel had chosen to look at it.
[48] The rules applicable to the non-disclosure before trial of the complete veterinary records and of the content of the surveillance records:
30.07 Where a party, after serving an affidavit of documents,
(a) comes into possession or control of or obtains power over a document that relates to a matter in issue in the action and that is not privileged; or
(b) discovers that the affidavit is inaccurate or incomplete,
the party shall forthwith serve a supplementary affidavit specifying the extent to which the affidavit of documents requires modification and disclosing any additional documents. R.R.O. 1990, Reg. 194, R. 30.07.
30.08 (1) Where a party fails to disclose a document in an affidavit of documents or a supplementary affidavit, or fails to produce a document for inspection in compliance with these rules, an order of the court or an undertaking,
(a) if the document is favourable to the party’s case, the party may not use the document at the trial, except with leave of the trial judge; or
(b) if the document is not favourable to the party’s case, the court may make such order as is just. R.R.O. 1990, Reg. 194, r. 30.08 (1); O. Reg. 504/00, s. 3.
31.09 (1) Where a party has been examined for discovery or a person has been examined for discovery on behalf or in place of, or in addition to the party, and the party subsequently discovers that the answer to a question on the examination,
(a) was incorrect or incomplete when made; or
(b) is no longer correct and complete,
the party shall forthwith provide the information in writing to every other party. R.R.O. 1990, Reg. 194, R. 31.09 (1).
(3) Where a party has failed to comply with sub-rule (1) or a requirement under clause (2) (b), and the information subsequently discovered is,
(a) favourable to the party’s case, the party may not introduce the information at the trial, except with leave of the trial judge; or
(b) not favourable to the party’s case, the court may make such order as is just. R.R.O. 1990, Reg. 194, r. 31.09
48.04 (1) Subject to sub-rule (3), any party who has set an action down for trial and any party who has consented to the action being placed on a trial list shall not initiate or continue any motion or form of discovery without leave of the court. O. Reg. 436/10, s. 1 (1).
(2) Sub-rule (1) does not,
(a) relieve a party from complying with undertakings given by the party on an examination for discovery;
(b) relieve a party from any obligation imposed by,
(i) rule 30.07 (disclosure of documents or errors subsequently discovered),
(iv) rule 31.09 (disclosure of information subsequently obtained).
[49] In this case, at the defendant Heidi Hill’s examination, she was asked whether surveillance of the plaintiff had been arranged and defendant’s counsel on discovery said that she did not know of any; in other words, the answer on discovery was no, no such surveillance had been commissioned. That appeared to have been true at the time because no surveillance occurred until well after completion of the examinations for discovery, in 2011. As well, at the time the defendant’s affidavit of documents was delivered, no surveillance record existed. However, once surveillance had been conducted, the record became a privileged document in the defendant’s possession. This is where, in my view, the continuing duty to disclose imposed by the rules kicks in. The existing affidavit of documents had become incomplete and inaccurate where it stated that all privileged documents in the defendant’s control were listed in Schedule B. By rule 30.07(b), the defendants were required to serve a supplementary affidavit disclosing the additional document, i.e. the surveillance record, in a timely manner before trial. Rule 48.04(2) affirms that intent by exempting, from the setting – down prohibition of further proceedings, disclosure of information subsequently obtained.
[50] The defendants’ counsel’s negative answer to the question concerning surveillance on discovery was no longer correct by 2011. By rule 31.09(1)(b) and the discovery disclosure rules, the defendants were required to provide a complete summary of the surveillance to the plaintiff. Following Ceci and Landolfi, the discovery rules are to be read in a manner to discourage tactics and encourage full and timely disclosure in order to encourage early settlement and reduce court costs. Carthy J.A. in Ceci set out the rationale for this reading of rule 30.09 in context with the informational discovery rules:
- In my view, the discovery rules must be read in a manner to discourage tactics and encourage full and timely disclosure. Tactical manoeuvres lead to confrontation. Disclosure leads sensible people to assess their position in the litigation and to accommodate. In cases such as this, there will be very few litigants who successfully maintain a dishonest stance simply because they have been exposed to the other party's evidence in advance of giving answers. It is more likely that the process of discovery will make it difficult for a litigant to conceal untruth and that a plaintiff will back away voluntarily from claims that are exposed as invalid, limiting further expense in the litigation.
[51] To argue, as Mr. Forget does, that a litigant is entitled to hold back information and documents that are clearly relevant and are needed by the opposing party to properly assess the case, well before trial with its accompanying heavy costs burden, in my view is to run directly counter to the direction by the Court of Appeal and the meaning and intent of the Rules of Civil Procedure. It is a holdover from pre-1984 days when surprise was too often the order of the day for trials. While the plaintiff’s evidence as given in chief did coincide to some extent with what the surveillance showed, the overall impression given by the surveillance differed from the tenor of his evidence. It showed the plaintiff working for relatively lengthy periods of time on his garden and yard, using a shovel and an axe, pulling up weeds using some force, washing the inside of a car as well as playing an active role in building and carrying a floating dock and driving a wheelbarrow relatively full of earth a significant distance along the beach near the cottage. It would have been important for counsel to know this information as the general effect contradicted the tenor of his evidence that he could not do activities for any considerable length of time without flare-ups of severe back pain. I am not suggesting, of course, that the defendants were under a duty to disclose the actual surveillance record but the requirement of full disclosure of relevant evidence before trial required defendants’ counsel to deliver a complete and accurate account and summary of the content of the surveillance.
[52] The defendants’ counsel failed to deliver an up-dated affidavit of documents and failed to correct the examination for discovery concerning the subsequent surveillance in a timely manner before trial. Where the opposing party is kept in the dark about the existence of a document or record by lapses in the duty to disclose before trial, I fail to see how that party can exercise their right to move for the relevant information to be produced before trial. The same goes for the failure to produce the full record of the defendants’ veterinarian records in a timely fashion following the discoveries in 2009 and well before trial. The timing of, and failure to disclose relevant documents and information following the examinations for discovery is an example of smart practise which encourages costly trials and makes more difficult early settlement of cases before trial. In my view, it must be discouraged by a significant reduction in the defendants’ costs. It is by no means as significant a failure to disclose as happened in the two cases decided by Cusinato J. in which major areas of the evidence in the one party’s possession led to a complete misapprehension by the unsuccessful party before trial of the other’s case. See Bailey v. Leamington (Tn.), [2001] O.J. No. 386 (SCJ) where a deduction of 60% of the successful party’s partial indemnity costs was ordered); Kielt v. Gawne, [1993] O.J. No. 2570 (SCJ – where the successful defendant’s was denied costs entirely).
[53] The defendants’ counsel’s conduct of the case in this regard, coupled with the inordinately lengthy and at times repetitive nature of his cross-examination of the plaintiff which extended to 3.5 days instead of the 1.5 days estimated by him, produced a waste of the court’s time in having to conduct a lengthy voir dire and ruling. In the end I had to put Mr. Forget on a deadline which he exceeded with leave by a further hour. Make no mistake, I am very impressed by the well-prepared and courageous representation of his clients by Mr. Forget and by the result he has achieved. His cross-examination at times was most effective. The problem is that there was a good possibility that this trial could have been averted by timely disclosure of (i) all the documents marked later as exhibits, (ii) the complete veterinary record, and (iii) a complete summary of the content of the surveillance, together with a letter informing plaintiff’s counsel of the relevance of the undisclosed documents, all of which may well have brought about a much reduced, more reasonable offer from the plaintiff before trial. I do not rest on this belief; what I am doing here is penalizing the defendants for the engagement by their counsel in a practise of non-disclosure which, in my view, is contrary to the spirit and meaning of the rules and their policy of promoting disclosure as instrumental to early settlement, and to the importance of pre-trial resolution as an issue of access to justice. Nevertheless, the plaintiff should reasonably be taken to know that proceeding with a trial was risky given that the burden of proof is on him, that he had no third-party witness to back up his version of the accident, plus the misleading history he gave to several of the expert witnesses retained on his behalf.
[54] I also bear in mind that Plaintiff’s counsel produced an assessment by the treating orthopaedist done only a week before the beginning of the trial, far short of the time required by the rules. Argument had to be heard, though not lengthy and that evidence was ruled inadmissible. It contained new information not previously disclosed to the defendants’ counsel as part of the plaintiff’s case on an important aspect of the case which would have required a lengthy adjournment and reply from the defendants’ expert medical witnesses and further evidence and a probable loss of jurors. This occurred because the assessment and the orthopaedist’s report which could have been available many months before trial and could have been produced in a timely manner were not arranged and supplied by the plaintiff’s counsel well before trial.
[55] In accordance with the findings I have made, I find no support for the plaintiff’s submission that no order should be made on costs. I find that the defendants’ costs for fees on a partial indemnity scale are $223,300 (rounded, not including the HST). I have applied a factor of 25% to the fees as claimed to convert to the lower scale. I will fix the defendants’ fees portion, using a further reduction of 40% on account of the conduct of the defendants’ case, at 100,485 (rounded, without HST included).
[56] As for the disbursements, the surveillance cost was not claimed, the only authority before me for disallowing the travel and hotel expense during trial for defendants’ counsel is an appellate court decision from another province. It applied an “unavailability of competent local counsel” test. I do not understand this to be the law in Ontario. I also do not see it as unreasonable for the defendants in this case to engage Toronto counsel given the proximity of Barrie and Toronto. However, I do not see why counsel should be able to charge their usual hourly rate as if it were part of the work preparing for trial. I will fix the travel cost of counsel for one vehicle at $1,242 (rounded), using the government kilometrage factor per return trip to Barrie of $142 for 9 trips. I see no hotel bills that were paid. Lastly, I am not aware of any authority for two of the defendants to claim salary that they have lost, nor is there any evidence before me to prove that is the case. I have no mileage figure or record of attendance supporting their claim for travel to the trial. I will therefore disallow the travel/hotel expense as claimed of $5,341.09 and substitute travel expense only of $1,242. I disallow the defendants’ salary claim of $4,240.08. The total deducted is $8,339.17.With those reductions, disbursements are allowed at $14,833.74 (HST not included, exempt item included).
[57] I fix the defendants’ costs at:
Fees $100,485.00
Disbursements $ 14,833.74
Total costs allowed (without HST) $115,318.74
HOWDEN J.
Released: August 24, 2012