Endorsement

COURT FILE NO.: 04-CV-280208CM3
DATE: 20120924
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ANGELA GRIGOROFF, Plaintiff

AND:

WAWANESA MUTUAL INSURANCE COMPANY, Defendant

BEFORE: Madam Justice Darla A. Wilson

COUNSEL:
Jane Conte & Jeremy Solomon, Counsel for the Plaintiff
Ian Kirby, Counsel for the Defendant

HEARD: By written submissions

[ 1 ] This action involved claims by the Plaintiff for payment of various benefits pursuant to the Statutory Accident Benefits Schedule , O. Reg. 403/96 [“SABS”], following a motor vehicle accident that occurred December 7, 2001. The trial proceeded before me with a jury commencing March 28, 2011. The jury delivered its verdict April 20, 2011. After the jury retired to consider its verdict, the solicitor for the Defendant indicated there was an issue with respect to the deductible for transportation expenses. After delivery of the jury verdict, I advised counsel that I would deal with the issue of the deductible as well as costs, if they could not agree on these points.

[ 2 ] Subsequently, I received written submissions from the solicitor for the Plaintiff on the issue of the deductible for the transportation expenses, the calculation of interest and costs. Mr. Kirby advised that he wished to call viva voce evidence from the representative of the Defendant on the issue of the calculation of transportation expenses in addition to delivering written submissions. The solicitor for the Plaintiff objected to the Defendant calling further evidence.

[ 3 ] Cassandra Jones, an employee of Wawanesa, was called as a witness for the Defendant during the trial and testified about the claims that were submitted by the Plaintiff, what payments were made and the calculations for the various payments. One of the questions for the jury to answer was the calculation of medical and rehabilitation expenses, which includes transportation to the appointments. The jury was asked to answer what amount should be awarded to the Plaintiff for her reasonable medical expenses. This issue was the subject of expert opinion during the course of the trial.

[ 4 ] While Mr. Kirby requests the opportunity to call viva voce evidence on the transportation claims that were submitted, the purpose for which the transportation was incurred and whether the 50 kilometre deductible would apply, I am not persuaded this is necessary or appropriate in the circumstances. The issue of the deductible was not a surprise to the Defendant. Ms. Jones who handled the claim on behalf of Wawanesa testified at the trial and had the opportunity to comment on the transportation expenses, how the amounts were calculated, including whether a deductible was applicable. In my view, it would be most unusual to hear further evidence on an issue the jury was asked to decide following delivery of the jury verdict. It is common practice for the court to decide the applicability of statutory deductibles following the jury verdict. As I have indicated, the issue of whether or not the deductible applied to the payment of transportation expenses was not a new issue that developed after the jury rendered its verdict. The solicitor for the Defendant failed to satisfy me that it is necessary to hear further evidence concerning the transportation expenses in order for me to rule on the 50 kilometre deductible and I decline to hear any additional evidence prior to rendering my decision. I have reviewed the written submissions from both counsel.

Transportation Expenses

[ 5 ] Under sections 14 and 15 of the SABS , an insurer is obligated to pay for the insured person to be transported to and from treatment sessions. Sections 14(6) and 15(12) state that the insurer is not liable to pay the first 50 kilometres of transportation in the insured person’s car for treatment.

[ 6 ] The Defendant acknowledges that it had waived the 50 kilometre deductible if a family member or friend was driving while the Plaintiff was receiving treatment and this was confirmed in a letter dated February 11, 2002, marked as an exhibit. Ms. Jones was questioned about this during cross examination and while she stated that the waiver of the deductible only applied to the treatment Ms. Grigoroff was receiving at Riverdale, she agreed that the letter did not contain any such restriction.

[ 7 ] Clearly, the waiver of the deductible would not apply if the Plaintiff was able to drive herself to treatment. However, that was not the evidence at trial for the period of time in 2003 when the expenses were submitted. As a result of her head injury, Ms. Grigoroff’s driver’s license was suspended following the accident and was reinstated in February 2004. Thus, the Plaintiff was clearly not in a position to drive herself to and from treatment during the period of time that the jury awarded transportation expenses, specifically 2003.

[ 8 ] While Mr. Kirby submits that the waiver of the 50 kilometre deductible does not apply if the Plaintiff was making the trips for things other than attending medical or rehabilitation appointments, there was no evidence at trial that this occurred. If the Defendant had evidence that the Plaintiff was claiming transportation expenses for trips made for anything other than medical appointments or rehabilitation, I would have expected to hear that evidence during the trial and I did not. Various transportation expense forms and the responding explanation of benefits forms were marked as exhibits at the trial. It was on the basis of these forms that the jury awarded the amount for transportation expenses. I do not accept the submission of the solicitor for the Defendant that the jury was confused on this area.

[ 9 ] The evidence is clear that for the period of time that transportation expenses were awarded by the jury, the Plaintiff was not driving herself to her appointments. The 50 kilometre deductible would not apply.

Interest Calculation

[ 10 ] Section 46 of the SABS sets out the procedure for the payment of interest on an overdue benefit payment:

(1) An amount payable in respect of a benefit is overdue if the insurer fails to pay the benefit within the time required under this Part.

(2) If payment of a benefit under this Regulation is overdue, the insurer shall pay interest on the overdue amount for each day the amount is overdue from the date the amount became overdue at the rate of 2 per cent per month compounded monthly.

[ 11 ] The parties disagree over the date when interest calculations commence pertaining to the award of attendant care benefits. Each side has retained accounting experts. The jury answered question 1 by awarding the Plaintiff the sum of $48,055.52 for attendant care benefits, commencing January 20, 2002 up to the present.

[ 12 ] Following delivery of the jury verdict, the Defendant paid to the Plaintiff all principal sums for attendant care for the period prior to August 1, 2003 and calculates the interest from February 2009 since this was the first notice Wawanesa had that they ought to pay anything other than the amounts for attendant care that were previously submitted and paid.

[ 13 ] The Plaintiff claims interest commencing in February 2002 while the Defendant calculates the interest from February 2009. The difference in their respective calculations is $46,801.00.

[ 14 ] The Plaintiff argues that the case law is clear that if a determination is made by the court of what the appropriate benefit is that ought to have been paid, the interest runs from the date of the first overdue amount. The rationale for this approach is set out in Attavar v. Allstate Insurance Co. Of Canada (2003), 2003 7430 (ON CA), 63 O.R. (3d) 199 (C.A.), where Justice Laskin wrote, at para. 49, “[t]he provision is designed to compensate insureds for the time value of money and to encourage insurers to pay accident benefits promptly.”

[ 15 ] The solicitor for the Defendant submits that Wawanesa paid the invoices submitted for attendant care prior to August 2003 and it was only as a result of the retrospective attendant care assessment that was done by Galit Liffshitz at the request of Plaintiff’s counsel in February 2009 that a higher level of attendant care benefits ought to have been paid to the Plaintiff prior to August 1, 2003.

[ 16 ] In Attavar , the Court of Appeal considered the issue of when interest commenced on a loss of earning capacity benefit pursuant to the SABS that was in effect up to November 1, 1996. In that case, the insurer had paid a certain amount but the trial judge concluded that the Plaintiff’s residual earning capacity was zero and awarded a substantial sum for this benefit. He also awarded interest on the benefit from the time it was first due in accordance with the provisions for overdue payments under the Schedule. The insurer objected arguing that the interest was not due until the trial judge ordered the payment in the amount that he did and appealed the decision of the trial judge.

[ 17 ] While Mr. Kirby submitted that Attavar is not applicable to the facts of the case before me, I do not agree. Justice Laskin considered the broader issue of whether it was fair that the insurer be required to pay interest pursuant to the Regulations when it had paid a reasonable amount for the benefit and could not have known what amount would be awarded by the trial judge at a later date. Justice Laskin rejected this argument, based on the wording of the SABS and the underlying policy and I agree with his analysis and comments.

[ 18 ] If the intention of the legislators was that insurers would not be subject to the interest payments on amounts that were overdue if they had in good faith paid a different amount, that could have been specified in the SABS and it was not. In looking at the policy reasons, the situation in Attavar is not materially different than the situation before me. In both cases, payments were made by insurers and at a later date, findings were made that a higher amount ought to have been paid. The question then becomes whether the insurer ought to pay interest from the time stipulated in the Regulations even though the insurer had no way of knowing the payments they had made were not sufficient.

[ 19 ] I concur with the view of Justice Laskin that the interest component in the Regulations was not intended to be punitive but rather to ensure that insureds are paid benefits promptly.

[ 20 ] I agree with the submission of counsel for the Plaintiff that the situation with respect to interest on amounts the court finds due for accident benefits is no different than a damages claim an insurer must pay after a trial. Even though the insurer cannot know the correct amount of damages to pay until there is a decision of the court, the insurer is nevertheless required to pay interest from the date set out in the Courts of Justice Act , R.S.O. 1990, c. C.43, which date is many months or years prior to the court’s decision. The fact that Wawanesa did not know the amount of the attendant care benefit being sought until the report of Ms. Liffshitz in February 2009 does not mean that is the date that the interest on the benefit commences to run. The provisions in the Regulations are clear that the interest runs from the day the payment became overdue.

[ 21 ] As a result, I order the Defendant is to pay interest on the attendant care benefits owing to the Plaintiff from February 2002.

Costs

[ 22 ] Each party delivered Offers to Settle including amounts for the outstanding benefits: attendant care; income replacement; housekeeping; and medical/rehabilitation. The Plaintiff’s offer dated March 18, 2011 was $216,152.92 plus interest and costs. The Defendant’s offer dated March 18, 2011 was $100,000 for all outstanding benefits and interest plus reinstatement of income and attendant care benefits for “so long as the Plaintiff remains eligible pursuant to the SABS ” plus costs to be agreed upon or assessed.

[ 23 ] The Plaintiff concedes that the jury’s verdict was less than the amounts in her offer to settle. She submits that she is entitled to her costs throughout on a partial indemnity basis, quantified at $261,744.72. This is based on an hourly rate of $225 for Ms. Conte (2002 call) and $350 for Mr. Solomon (1990 call). The Plaintiff submits that the Defendant’s offer was vague and uncertain and ought not to attract cost consequences.

[ 24 ] The Defendant argues that the principle issue at trial was the amount of attendant care and on this point, the Defendant was successful. It is pointed out that the Defendant offered to pay the Plaintiff $2,000 in monthly attendant care benefits and the amount awarded by the jury, $1,901.20, on an ongoing basis is less than the amount of their offer. Mr. Kirby submits that the bulk of the trial time was taken up with the issue of attendant care. He argues that the Defendant ought to be entitled to some costs from the date of its offer or alternatively, no costs should be awarded to either side from the dates of the offers in March 2011.

[ 25 ] Section 131 of the Courts of Justice Act along with rule 57.01 of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, governs the award of costs and provides the court with discretion to fix costs. Rule 57 enumerates the various factors a court may consider when determining the issue of costs. The Divisional Court in Andersen v. St. Jude Medical, Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Ont. Div. Ct.), at para. 22, set out the principles that should guide the court exercising its discretion to fix costs:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher , Moon and Coldmatic .

2. A consideration of experience, rates charged and hours spent (formerly a costs grid calculation) is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher . The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering .

3. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).

4. The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano at p. 249.

5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher .

[ 26 ] The court must take into account the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), specifically, at para. 26, that the overall “objective [of fixing costs] is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.”

[ 27 ] Rule 57 and section 131(1) of the Courts of Justice Act grant the courts wide discretion over cost awards. I will set out for ease of reference the various factors for consideration pursuant to rule 57.01(1):

(0.a) the principle of indemnity … ;

(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;

(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.

[ 28 ] I agree with the submission of counsel for the Plaintiff that the trial of this action involved the determination of past benefits and entitlement. No declaratory relief was sought from the court so there was no finding about entitlement to future benefits. The Defendant offered the sum of $100,000 for past benefits which must include interest, since the offer is silent on payment of interest.

[ 29 ] The provisions of the offer relating to the reinstatement of income replacement benefits and attendant care benefits at stipulated amounts for as long as the Plaintiff remains eligible, in my view, are vague. It is unclear how eligibility is determined under this offer. In any event, it is of limited value to consider the Defendant’s offer for future entitlement when the jury’s verdict dealt with past entitlement to benefits and the court was not asked to rule on payment of future benefits. In short, the trial was about the injuries of the Plaintiff stemming from the motor vehicle accident of December 7, 2001 and what benefits she was entitled to under the SABS . The agreed-upon questions put to the jury required them to determine the attendant care benefits up to the present, the quantum of housekeeping and home maintenance benefits, the proper amount of medical expenses the Plaintiff was entitled to and whether she is unable to engage in any employment for which she is reasonably suited after April 22, 2010.

[ 30 ] Had the Defendant wished to include provision in its offer for the payment of future benefits, it could have done so with express language, making the offer capable of certainty of calculation. Mr. Kirby denies that his client’s offer to settle is “vague and uncertain” and submits “at no time did the Plaintiff or her counsel ever ask the Defendant for any clarification on any aspect of the Defendant’s Offer to Settle.” In my view, there is no obligation on a party to inquire about the particulars of the opposing party’s offer to settle. The reason that the courts insist that the components of the offer be clear on their face is to avoid ambiguity or the necessity of making inquiries to determine what the offer means.

[ 31 ] I do not agree that the Defendant was largely successful at trial. The Plaintiff instituted the action as she disagreed with the benefits that had been paid under the SABS by the insurer. The Defendant urged the jury to accept the opinion of the psychiatrist Dr. Kirkpatrick who testified the Plaintiff was bipolar and her on-going difficulties were not related to her head injury sustained in the accident. The jury rejected this argument and found the Plaintiff was entitled to attendant care benefits and that she was incapable of working. In his written submissions, Mr. Kirby advises that since the delivery of the jury verdict, the Defendant has paid to the Plaintiff $590,819.31 comprised of $136,975.06 in principal and $453,844.25 in interest. This is not an insignificant sum of money and certainly far exceeds the Defendant’s offer to settle.

[ 32 ] It is clear that the jury verdict was not as favourable as the terms of the Plaintiff’s offer to settle nor was it less than the Defendant’s offer, ignoring the provisions concerning future entitlement to benefits. As a result of the lawsuit and the jury verdict, the Defendant has paid a further $590,819.31. I see no reason why costs should not follow the event, with the Plaintiff being awarded her costs on a partial indemnity scale.

[ 33 ] I turn now to the issue of quantum. I am mindful of the factors set out in Rule 57. Counsel for the Plaintiff submits that this was a “very complex” case. I do not agree. The fact that a number of experts were called does not indicate that the issues to be determined by the jury were complex. The jury heard different medical opinions on the nature and extent of the injuries suffered by the Plaintiff and they were required to determine which expert opinions they accepted and to then decide on quantum of various benefits; juries are asked to do this on a regular basis.

[ 34 ] I have no difficulty finding the issues were of great importance to the parties. Counsel for the parties are experienced in this area and were aware that the trial would be lengthy, involving testimony from numerous experts and thus, the costs of proceeding to trial were significant. In fixing the costs, I am not undertaking the exercise of scrutinizing dockets and determining whether the actual costs of a party are appropriate. Rather, as set out in Boucher , I am to determine an amount that is fair and reasonable and within the contemplation of the unsuccessful party.

[ 35 ] The solicitor for the Plaintiff claims fees in the sum of $231,632.50 plus HST. Ms. Conte has 518.9 hours at a rate of $225/hour. The 316 hours claimed presumably are for preparation and attendance at trial because Mr. Solomon claims 316 hours and he was trial counsel. I say “presumably” because there are no dockets provided, simply a summary of time spent which does not indicate by whom. No claim for disbursements is made for reasons which are not identified. Perhaps they have been paid.

[ 36 ] Given the inadequacy of the documentation provided by the solicitor for the Plaintiff I am left to speculate on certain matters, which is most unsatisfactory. Counsel seeking payment of their fees have an obligation to satisfy the court of the reasonableness of the quantum sought.

[ 37 ] There was a tort action arising from the same accident which resolved prior to the trial of the accident benefits issues and certainly there would have been duplication between the work done on the two different claims. It appears there were common discoveries, mediation and perhaps pre-trials. I am not certain because this issue is not addressed in the materials from the Plaintiff’s solicitor.

[ 38 ] Similarly, while I appreciate Mr. Solomon was retained for the purpose of trial and became involved at the pre-trial stage, the issue of duplication of work between Ms. Conte and Mr. Solomon is not dealt with. The number of hours claimed, given the nature of the issues to be determined in the benefits action, is excessive in my opinion. It is not proportional to the amounts involved and the complexity of the proceeding. The Plaintiff is certainly entitled to have two counsel at trial but that does not mean an unsuccessful Defendant must pay for it.

[ 39 ] Taking into account all of the circumstances, bearing in mind the principle of proportionality, I am of the view that the sum of $175,000 for fees is appropriate and I fix costs in that amount, plus the applicable taxes, to be paid by the Defendant to the Plaintiff.

[ 40 ] While the solicitor for the Defendant has asked for costs of the Plaintiff’s unsuccessful motion to prevent the use of various defence reports at trial, I am not prepared to make an order of costs on a motion that took place at trial. The court is called upon at regular intervals to rule on the admissibility of evidence during the course of a trial and absent unusual circumstances, these motions do not attract costs orders. In my view, while the Plaintiff’s motion was unsuccessful for the reasons set out in my written endorsement, it was not frivolous or vexatious nor is it deserving of an adverse costs order.

D.A. Wilson J.

Date: September 24, 2012