COURT FILE NO.: 07-CV-326369 PD2

DATE: 20121001

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Sukhjinder Dhaliwal v. Premier Fitness Clubs Inc., Premier Fitness Clubs, Curzons Fitness Group Inc., and Curzons Fitness Clubs

BEFORE: Mr. Justice Kenneth L. Campbell

COUNSEL: Don Harvey, for the Plaintiff, Sukhjinder Dhaliwal

F. Scott Turton, for the Defendants, Premier and Curzons Fitness Clubs

ENDORSEMENT (COSTS)

A. Introduction

[1] On August 15, 2012, I released Reasons for Judgment in this case, in which I found the defendants liable for negligence under the Occupiers’ Liability Act, R.S.O. 1990, chap. O.2, and granted judgment in favour of the plaintiff in the amount of $24,442.42. I assessed the total quantum of the plaintiff’s damages in this case at $48,884.84, but determined that the plaintiff was responsible, by way of contributory negligence, for half of those damages. See: Dhaliwal v. Premier Fitness Clubs Inc., 2012 ONSC 4711.

[2] The only remaining issue is costs. Following the release of the Reasons for Decision, I received and considered written submissions and other accompanying materials from the parties on this outstanding issue, pursuant to rule 57.01(7) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

B. The Positions of the Parties

[3] The plaintiff seeks partial indemnity costs totaling $45,666, plus the applicable HST, and $8,561.98 in disbursements (including taxes). The defendants argue that the plaintiff should be denied any costs award given the limited nature of his success and the fact that he elected not to pursue his claim under the available simplified procedure. In the alternative, if the plaintiff is entitled to his costs, the defendants contend that a reasonable partial indemnity costs award would only total approximately $12,500, including all taxes and disbursements.

C. [Rule 76.13](https://www.canlii.org/en/on/laws/regu/rro-1990-reg-194/latest/rro-1990-reg-194.html) of the [Rules of Civil Procedure](https://www.canlii.org/en/on/laws/regu/rro-1990-reg-194/latest/rro-1990-reg-194.html)

[4] According to rules 76.13(2) and (3) of the Rules of Civil Procedure, if the judgment obtained by the plaintiff at the end of the case amounts to $100,000 or less, exclusive of interest and costs, the plaintiff shall not recover any costs unless: (a) the action employed the simplified procedure outlined in rule 76; or (b) the court is satisfied that it was reasonable for the plaintiff to have commenced and continued the action under the ordinary procedure. The reasonableness of the plaintiff’s decision to commence and continue the action employing the ordinary procedure must be assessed on the basis of the facts as they existed before the verdict. See: Garisto v. Wang (2008), 2008 ONCA 389, 91 O.R. (3d) 298 (C.A.) at para. 21.

[5] This important rule is designed to motivate plaintiffs with damage claims that are, realistically, no more than $100,000 in quantum to litigate those claims by way of the simplified procedure. This simplified procedure efficiently streamlines litigation and significantly reduces legal costs. As Sharpe J.A. observed, in delivering the judgment of the Court of Appeal for Ontario in Garisto v. Wang, at para 17:

The purpose of the simplified procedure regime is to reduce legal costs and to enhance access to justice by making available a cheaper and more expeditious procedural regime appropriately geared to the litigation of modest claims. That important purpose will be undermined if the costs sanctions built into the simplified procedure regime are not enforced. On the other hand, rule 76.13 has a built-in safety valve, and provides that costs may be awarded even when a plaintiff recovers less than $50,000, if it was “reasonable” for the plaintiff to have commenced or continued the action under the ordinary procedure.

[6] Importantly, at the time the plaintiff commenced his action in January of 2007, the statutory monetary threshold was $50,000. This threshold was not increased to $100,000 until January 1, 2010. Moreover, according to the transitional provision in rule 76.13(11), for actions which were commenced on or after January 1, 2002 and before January 1, 2010, such as the present case, rules 76.13(2), (7), and (8) apply as if the monetary threshold of “$100,000” reads “$50,000”. In short, the applicable monetary threshold in the present case for purposes of assessing the reasonableness of the plaintiff’s decision to adopt and continue the action using the ordinary procedure is $50,000.

D. Was it Reasonable for the Plaintiff to Pursue His Claim Without Using the Simplified Procedure?

[7] In the present case the plaintiff did not employ the simplified procedure for his action and recovered less than $50,000. Accordingly, the plaintiff’s costs claim turns on whether it was reasonable for the plaintiff to have commenced and continued his personal injury claim in the ordinary way without employing the simplified procedure.

[8] I am satisfied that it was reasonable for the plaintiff to have commenced his claim under the ordinary procedure. As I have already noted, when the plaintiff commenced his action in 2007, the monetary threshold was $50,000. Further, when he commenced his action the plaintiff claimed some $900,000 in damages. While the quantum of this claim, with the 20:20 vision of hindsight, now seems quite unrealistic, it was made at a time when the plaintiff was in some doubt about the true extent of his damages, as the defendants candidly admit. His employment future was uncertain. He faced future surgery to revise his injured finger. In any event, when he first launched his action, the plaintiff sought monetary damages that were far above the monetary threshold of $50,000 for the simplified procedure. Accordingly, it was not at all unreasonable for the plaintiff to have started his action using the ordinary procedure and not the simplified procedure.

[9] I am also satisfied that it was reasonable for the plaintiff to continue to litigate his claim under the ordinary procedure all the way to the trial of this action.

[10] While the plaintiff’s damages claim diminished in its quantum over time, even at the trial of this matter in June of 2012, the plaintiff still sought damages that were well in excess of the applicable threshold monetary limit of $50,000. More particularly, at trial the plaintiff sought: (a) general damages in the range of $40,000 to $50,000 for the amputation of the final phalanx of the fifth finger on his right hand; (b) damages in the amount of $2,400 for past lost income when he missed some three weeks of work in connection with his finger injury and subsequent medical surgeries and treatments; (c) damages for loss of future earning capacity in the amount of $20,000; (d) future care costs of approximately $20,000 for a prosthesis; and (e) special damages for medical expenses and drug prescriptions totaling $4,724.21.

[11] Accordingly, had the plaintiff been completely successful in his claim at trial, and had the plaintiff been able to successfully resist the allegations of contributory negligence, the plaintiff might have been awarded damages totaling some $97,124.21. Given that this amount was nearly twice the applicable monetary threshold, it was not unreasonable for the plaintiff to decide to continue his claim to trial under the ordinary procedure.

[12] While I ultimately assessed the total quantum of the plaintiff’s damages at $48,884.84, and only granted the plaintiff judgment in half that amount ($24,442.42) due to the plaintiff’s contributory negligence, this verdict cannot properly be used to assess the reasonableness of the plaintiff’s decision to pursue his claims using the ordinary procedure. As I have indicated, the reasonableness of the plaintiff’s decision in this regard must be assessed on the basis of the facts as they existed before the verdict. See: Garisto v. Wang, at para. 21.

[13] While I did not accept all of the arguments advanced by the plaintiff as to his damages claims, the plaintiff did not act unreasonably in advancing and pursuing them. I cannot conclude that the plaintiff ought to have realized prior to trial that there was simply no reasonable prospect that his damages claims would be accepted by the trial judge. Nor can I conclude that the plaintiff ought to have abandoned all of his damages claims over $50,000 on the basis that there was no realistic possibility of an award greater than $50,000. See: Garisto v. Wang, at para. 19, 21. Indeed, in my opinion the plaintiff acted reasonably in continuing to pursue his claims using the ordinary procedure all the way to the trial of this action. See: Ayerswood Development Corp. v. Western Proresp Inc., 2011 ONSC 2385 (S.C.J.); Affirmed: 2012 ONSC 2492 (Div.Ct.) at para. 5; Wicken (Litigation Guardian) v. Harssar (2002), 24 C.P.C. (5th) 164 (Ont.S.C.J.) at para. 13-15.

[14] For these reasons, the plaintiff is entitled to his reasonable partial indemnity costs in connection with his success on this action against the defendants. Moreover, it would not undermine the integrity and important purpose of the simplified procedure regime if the plaintiff was permitted to recover these costs from the defendants notwithstanding the fact that he only succeeded in recovering $24,442.42 in his action. See: Garisto v. Wang, at para. 18.

E. The Quantum of the Plaintiff’s Costs

[15] As noted at the outset, the plaintiff seeks partial indemnity legal costs of $45,666 and $8,561.98 in disbursements. The plaintiff has provided a detailed bill of costs in support of this position. The defendants contend that this is excessive, and argue that a reasonable partial indemnity costs award should be approximately $12,500, including all taxes and disbursements. In my view, a fair and reasonable partial indemnity costs award lies somewhere between these two extreme positions.

[16] This was a relatively uncomplicated personal injury action. As the defendants have accurately observed, there were “modest productions, brief discoveries,” no pre-trial motions, a standard mediation, a single pre-trial conference, and a short trial. Indeed, the trial of this matter was litigated quickly and efficiently. The entire trial lasted but four days. The plaintiff called only one witness, namely, the plaintiff. The defence called three witnesses. Accordingly, this was a case where the legal costs of litigating the plaintiffs claim could reasonably have been quite restrained.

[17] The defendants contend that the plaintiff’s team of four lawyers, of various levels of seniority, and their various law clerks, collectively spent too much time (over 240 hours) on this case. By way of contrast, the single lawyer for the defendants spent just over one-fifth of that total time on this case (50 hours). The defendants contend that they should only be responsible for the plaintiff’s costs that were really necessary. There is merit to this argument.

[18] In my view, an appropriate partial indemnity costs order in this case is $25,000 in legal fees, $3,250 in HST on those fees, and $8,521.98 in disbursements (including taxes), for a total costs award of $36,771.98. I hereby fix the plaintiffs partial indemnity costs in that total amount.

[19] In reaching this conclusion I have considered all of the circumstances of this case. I have also considered the factors outlined in rule 57.01 of the Rules of Civil Procedure, including the level of experience of the lawyers for the plaintiff, the time they actually spent on the case, the rates they billed their client, the result achieved by the plaintiff, the amount of the plaintiff’s claim, and the importance and complexity of the proceedings. Of course, any costs award should reflect “the amount of costs that an unsuccessful party could reasonably expect to pay” for the proceedings. See: rule 57.01(1)(0.b). In my opinion, this total costs award of $36,771.98 is an amount that the unsuccessful defendants could reasonably have expected to pay for these proceedings.

[20] In reaching this conclusion I have also considered the principles articulated by the Court of Appeal for Ontario in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 and Davies v. Municipality of Clarington (2009), 2009 ONCA 722, 100 O.R. (3d) 66, and the importance of proportionality and the need to ensure that costs are fixed in an amount that is fair and reasonable for the unsuccessful party, rather than fixed by reference to the actual costs incurred by the successful party. The costs award sought by the plaintiff would be disproportionate to the amount of damages recovered by the plaintiff, whereas the costs I have permitted properly reflects the principle of proportionality.

[21] In my view, the $25,000 which I have allowed for the plaintiff’s legal fees fairly and adequately reflects the plaintiff’s level of success in the action, and the time truly needed to achieve that measure of success. At the same time, this costs award for legal fees appropriately recognizes that the “team approach” to litigation that was adopted by the plaintiff in this case necessarily significantly increased the legal fees by virtue of the duplication of efforts inherent in this approach.

[22] As counsel for the plaintiff has noted, it is not the role of the court to “second guess” counsel on the time they have spent on any particular matter. However, the unsuccessful party to litigation cannot fairly be held responsible to pay the costs of the successful party where the time spent on the matter is “clearly excessive” or where the matter has been “overly lawyered.” While this team approach to litigation may offer many professional and strategic benefits, and be entirely appropriate and reasonable as between the law firm and its own client, it is an approach which invariably increases costs. Parties who adopt such an approach cannot reasonably expect that these greater costs will always be borne by their unsuccessful opponent. See: Basedo v. University Health Network, [2002] O.J. No. 597 (S.C.J.) at para. 7; Jovanovic v. Hamilton-Wentworth Regional Police Services Board, [2010] O.J. No. 1455 (Div.Ct.) at para. 24; Frenchmen’s Creek Estates Inc. v. Tuckernuck Mortgage Administration Inc., [2009] O.J. No. 2542 (S.C.J.) at para. 14-16; 914904 Ontario Ltd. (Maddison Avenue Hair Salon) v. 1374377 Ontario Inc., [2009] O.J. No. 2102 (S.C.J.) at para. 8-12; Mandeville v. Manufacturers Life Insurance Co., [2002] O.J. No. 5388 (S.C.J.) at para. 18-22; Shibley v. St. Joseph's Health Centre, [2004] O.J. No. 470 (S.C.J.) at para. 6-7; Royal Group v. Core Precision, 2011 ONSC 5818 (S.C.J.) at para. 14-15.

[23] The $25,000 for legal fees that I have allowed in this case avoids having the defendants pay for any of the overlap and duplication of efforts and responsibilities that is inherent in the plaintiff’s team approach, and which is apparent from a review of the plaintiff’s Bill of Costs.

[24] While this conclusion results in the plaintiff receiving a costs award ($36,771.98) that is well in excess of the damages award at trial ($24,442.42), this is not uncommon. I note that, in Garisto v. Wang, for example, the plaintiff received a jury verdict awarding him only $20,000 for his personal injury, but the Court of Appeal for Ontario nevertheless approved the plaintiff’s partial indemnity costs which had been assessed at a total of $47,158.94.

F. Conclusion

[25] In the result, the defendants shall pay the plaintiff’s partial indemnity costs of this action in the total amount of $36,771.98. As I have indicated, this total amount is broken down into $25,000 in legal fees, $3,250 in HST on those fees, and $8,521.98 in disbursements (including taxes). An order shall issue accordingly.

Kenneth L. Campbell J.

DATE: October 1, 2012