ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 10-18271
DATE: 2012-10-24

B E T W E E N:

JOEY BOUDREAU

Lou Ferro and Sean Oostdyk, for the Plaintiff/Respondent

Plaintiff/Respondent

• and -

BANK OF MONTREAL, ROGERS COMMUNICATIONS INC., NIKE CORPORATION, UMBRO INC., TIM HORTONS INC., TDL GROUP CORPORATION, STATE FARM INSURANCE COMPANY, BICK FINANCIAL LTD., DAN LAWRIE INSURANCE BROKERS LTD., MICHAEL LAMONT, AON INC. and HAMILTON TIGER CATS FOOTBALL CLUB INC.

Peter J. Pliszka and Andrew M. Baerg, for the Defendants/Applicants Rogers Communications Inc. and Umbro Inc.
Irving Marks and Dominique Michaud, for the Defendant/Applicant Bank of Montreal

Defendants/Applicants

LOFCHIK J.

REASONS FOR JUDGMENT (COSTS)

[ 1 ] By Reasons for Judgment dated July 31, 2012, I dismissed the plaintiff’s action against the defendants, Bank of Montreal (“BMO”), Rogers Communications Inc. (“Rogers”) and Umbro Inc. (“Umbro”).

[ 2 ] The claim in the action was for damages in the amount of $4,500,000.00 as a result of the failure of the defendants to ensure that the Ontario Soccer Association, of which the plaintiff was a member, had adequate insurance to provide care for the plaintiff who was rendered quadriplegic as a result of injuries suffered while playing soccer in a game sanctioned by the Association.

[ 3 ] The plaintiff alleged that the duty of the defendants to ensure that adequate insurance existed arose as a result of the defendants identifying themselves as corporate partners and sponsors of the Ontario Soccer Association and paying money to the Ontario Soccer Association in order to have access to the association’s membership as a target for the marketing of their goods and services.

[ 4 ] In my Reasons for Judgment I ordered that if any of the parties wished to seek costs in the action they do so by submitting written submissions in accordance with a timetable set out in the Reasons.

[ 5 ] I am now called upon to deal with the matter of costs of the action and motion for summary judgment having received written submissions from the moving defendants and the plaintiff.

[ 6 ] It is appropriate in this case that costs be awarded in favour of the successful defendants, that is BMO, Rogers and Umbro, and that I fix the costs pursuant to Rule 57.01 of the Rules of Civil Procedure as a result of the dismissal of the plaintiff’s action against these defendants.

[ 7 ] Counsel for BMO have submitted a claim for costs in the amount of $76,983.29 inclusive of H.S.T. for fees and $3,478.96 inclusive of H.S.T. for disbursements for a total $80,462.25. In their submissions counsel for BMO state that BMO is seeking costs of $60,000.00 inclusive of disbursements and H.S.T. which is less than the partial indemnity costs calculated in the Bill of Costs that has been submitted.

[ 8 ] Counsel for Rogers and Umbro have submitted an account in the amount of $50,676.55 inclusive of H.S.T. for fees and $4,177.91 inclusive of H.S.T. for disbursements for a total of $54,854.46. In submissions, counsel have indicated that these defendants are seeking costs in the range of $40,000.00 to $50,000.00 which is less than the amount calculated in the Bill of Costs submitted on a partial indemnity basis.

[ 9 ] Steps taken by these defendants involved:

(i) Receiving and reviewing statement of claim;

(ii) Delivering a notice of intent to defend;

(iii) Preparing and delivering a copy of the statement of defence and cross-claim;

(iv) Making a request to inspect documents;

(v) Preparing and entering into a Standstill and Tolling Agreement with some of the third parties to prevent expiry of the limitation periods with respect to bringing third party claims in order to reduce costs. Unfortunately not every party agreed to the Standstill and Tolling Agreement and, as a result, a third party claim was issued against other defendants in separate companion actions brought by the plaintiff to preserve the relevant limitation periods. The potential third party defendants were advised that they were not required to deliver any defences, if at all, until after a Rule 21 motion to be brought by these defendants was decided. To date none of the third party defendants have delivered defences to the third party claim;

(vi) Preparation for and bringing of a motion for summary judgment under Rule 21 of the Rules of Civil Procedure at which time the plaintiff’s claim against these defendants were dismissed.

[ 10 ] In addition, the defendants claim that further costs were incurred in connection with correspondence relating to this matter, attendances at scheduling court and conference calls to schedule a Rule 21 motion.

[ 11 ] The statement of claim consisted of 12 pages with 51 paragraphs.

[ 12 ] The statement of defence and cross-claim of BMO consisted of 3 pages.

[ 13 ] The statement of defence and cross-claim of Rogers and Umbro consisted of 6 pages with 25 paragraphs.

[ 14 ] The third party claim consisted of 7 pages with 17 paragraphs of which 3 pages contain substantive pleadings.

[ 15 ] The following factors referred to in Rule 57.01(1) are relevant to the fixing of costs in this case:

Amount Claimed and the Amount Recovered in the Proceeding

[ 16 ] The plaintiff claimed $4,500,000.00 against all defendants. Between the date of service of the statement of claim and the date of the Rule 21 motion brought by these defendants the plaintiff had released eight of the defendants from this action leaving only the three moving parties as defendants, thereby imposing a significant amount of potential liability exposure on these remaining defendants. The plaintiff has been entirely unsuccessful in recovering any amount.

Complexity of the Proceeding

[ 17 ] The individual legal issues in this matter were of moderate complexity. However, the plaintiff made the action more complex than necessary by pleading several disparate causes of action. Dealing with all of the issues warranted significant time and effort by counsel.

[ 18 ] One of the issues raised in the statement of claim was liability under the Occupiers’ Liability Act which was abandoned by plaintiff’s counsel at the hearing of the Rule 21 motion after counsel for the defendants had spent time in preparing a factum and oral argument addressing the issue.

[ 19 ] Given the imprecise nature of the statement of claim a significant amount of time had to be spent in research on all the potential causes of action raised by the plaintiff as possibly arising from the facts pleaded.

[ 20 ] The fact that the plaintiff raised issues which had not been litigated in Ontario before caused defence counsel to spend considerably more time in defending the action and bringing the Rule 21 motion than would ordinarily be the case.

Importance of the Issues

[ 21 ] The issues involved were of great importance to the parties given the amount claimed by the plaintiff and given the fact that the plaintiff was attempting to impose a duty of care not previously recognized in Canada.

[ 22 ] In addition, the issues raised had significant importance to the three moving parties (Rogers, Umbro and BMO) which regularly act as corporate sponsors of a wide range of events and activities, as well as to corporate sponsors in general.

The Amount of Costs Which an Unsuccessful Party Could Reasonably Expect to Pay

[ 23 ] In deciding what is fair and reasonable, the expectation of the parties concerning the quantum of costs is a relevant factor. It is not the subjective expectation of either the successful party as to whether all of the time and effort put into a case should be recoverable in costs nor the subjective view of what is reasonable of the unsuccessful party that counts, but rather an objective assessment of what is a fair and reasonable amount that should be paid by the unsuccessful party to the successful party.

Zesta Engineering Ltd. v. Cloutier, (2002)
Boucher v. Public Accountants Council for Province of Ontario, (2004)

[ 24 ] Given the nature of the issues raised by the plaintiff it would have been reasonable to expect that extensive research would have to be conducted by the defendants. In addition, given the amount claimed and the importance of the issues raised to the defendants, the plaintiff or his counsel must have appreciated the need to completely and totally answer all of the allegations. The reasonable expectation of a litigant under these circumstances would be that, should the claims fail, there would be a substantial costs award against them. One would presume that it was an informed risk with benefit of counsel that the plaintiff undertook in deciding to proceed, knowing the significant expense that would be incurred by the defendants in defending this action.

[ 25 ] The factum of BMO with respect to the Rule 21 motion was 21 pages consisting of 60 paragraphs and referring to 20 cases.

[ 26 ] The factum of Rogers and Umbro was 18 pages consisting of 49 paragraphs and referring to 24 cases, some of which were also referred to in the BMO factum.

[ 27 ] The factum of the plaintiff was 30 pages consisting of 169 paragraphs and referring to over 40 cases in a 4 volume brief of authorities.

[ 28 ] Counsel for the plaintiff argues that there should have been a collaborate effort between the defendants to avoid nearly identical work being done twice. He argues that failure to do so resulted in excess hours to produce similar material on the summary judgment motion. Counsel for the moving defendants argue that they did collaborate together to split up preparation and oral argument in order to reduce preparation time, avoid repetition and reduce the length of the Rule 21 motion hearing.

[ 29 ] The realistic expectation of a plaintiff who sues multiple defendants must be that each defendant may choose to be represented by his own counsel, particularly where there is a likelihood of cross-claims between the parties. The fact that the plaintiff chose to make claims against multiple defendants (in this case 11 originally), does not preclude each defendant from retaining its own counsel to look after its own interests and conduct a vigorous defence on its behalf. Thus it is reasonable to expect that an unsuccessful plaintiff could be exposed to multiple costs claims.

[ 30 ] Counsel for the plaintiff argues that the defendants are of considerable means and the access of ordinary citizens to the court against defendants of means should not be chilled by high cost awards. He further argues that the plaintiff is left impoverished as a result of his injury and the this should be a consideration in fixing costs.

[ 31 ] Plaintiffs who chose to bring marginal or frivolous claims should not expect to escape the costs consequences of doing so. If the claim made here is not to be characterized as a frivolous claim, it, in my view, borders on frivolous and the action cannot be said to be an honest disagreement about the value of a claim as characterized by counsel for the plaintiff. A frivolous claim must be distinguished from a claim where parties are unable to agree on a fair resolution and chose to proceed to trial.

Wicken (Litigation Guardian of) v. Harssar, (2004)

[ 32 ] The determination of this costs award has no effect on the so called “access to justice” of the plaintiff in respect of the injuries he suffered in the soccer game incident which gave rise to this action. This action was one of five separate actions commenced by plaintiff’s counsel against a multitude of defendants relating to the same event and injuries. Even with the dismissal of this action and the action against the insurer, Chubb, the plaintiff still has three other actions for monetary damages against more obvious defendants such as the Ontario Soccer Association, Soccer World, the opposing soccer players, the insurance broker who acted on behalf of the Ontario Soccer Association in obtaining the relevant insurance, as well as the referees of the game in which the plaintiff was injured. As such, if there is any merit to the plaintiff’s claim that someone else is responsible for his injuries, the plaintiff will have “access to justice” in those other more direct and obvious lawsuits.

[ 33 ] In my view, there was no need for the plaintiff to commence this additional and legally questionable action against the corporate sponsors of the Ontario Soccer League. Given the existence of the other actions, this action was redundant. As a matter of law it was likely to fail. In these circumstances, it is not reasonable that a costs award should be extraordinarily low to accommodate the plaintiff. The determination of whether the plaintiff is of unsubstantial means must await the outcome of the other lawsuits which have been brought on behalf of the plaintiff. Once the other actions are resolved, the matter of payment of a costs award in this action can and should then be worked out between the plaintiff’s counsel and the plaintiff. In any event, as set out in paragraph 17 of Agius v. Home Depot Holdings Inc. , (2011) Carswell Ont. 10322 , impecuniosity does not eliminate or reduce a party’s liability for costs. Rather, impecuniosity of the paying party, only if established, may be one of the factors the court could consider in the exercise of its discretion in determining a reasonable amount of costs.

[ 34 ] A costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of actual costs to the successful litigants. A motions judge is not equipped nor expected to conduct a line by line assessment but should attempt to achieve procedural and substantive justice between the parties.

Zesta Engineering Ltd. v. Cloutier , supra, and
Marano v. Bank of Montreal (1998), 1998 5633 (ON CA) , 41 O.R. (3d) 222 (C.A.)

[ 35 ] It is not the role of the court to second guess the time spent by counsel unless it is manifestly unreasonable in the sense that the time spent is clearly excessive or the matter has been over lawyered.

Per Nordheimer J. in Basedo v. University Health Network , [2002] O.J. No. 597 (Sup. Ct.)

[ 36 ] While I accept that the bills of costs accurately reflect the time spent by all lawyers in this matter, it is inconceivable to me that the amounts claimed are justifiable. I accept the submission of counsel for the plaintiff that the total amount of fees claimed by the defendants Rogers, Umbro and BMO is grossly inefficient and exceeds what is reasonable or what an unsuccessful party would reasonably have expected to pay.

[ 37 ] In a matter which has not progressed past the initial pleadings stage, and involved a motion for summary judgment which took one and a half days of court time, the lawyers BMO have expended 271 hours or almost 7 weeks of effort and the lawyers for Rogers and Umbro have expended over 148 hours or over 3 weeks of effort.

[ 38 ] The time spent in preparing the Tolling and Standstill Agreement was essentially wasted because, since not all of the proposed third party defendants were prepared to sign the agreement, third party claims had to be prepared and served along with correspondence advising that the third party defendants need not respond until the summary judgment motion being brought by the defendants was disposed of. In their submissions, counsel set out that considerable time was spent in preparing and arranging for the execution of this agreement. The plaintiff should not be required to pay for this time.

[ 39 ] I am satisfied that there was duplication of time both between counsel for the defendants and within the law firms representing each defendant. (Counsel for BMO had 4 lawyers and counsel for Rogers and Umbro had 3 lawyers involved in the matter).

[ 40 ] As I have stated above, the unsuccessful party could have reasonably expected to pay a substantial amount of costs. But approximately 10 weeks of time in this matter is not a reasonable amount of time for a losing party to pay notwithstanding the relative importance and complexity of the motion for summary judgment and that it resulted in the termination of the action at an early stage.

[ 41 ] Having regard to all the relevant factors an appropriate amount for fees to be paid to counsel for BMO and for Rogers and Umbro is $25,000.00.

[ 42 ] In the result, Rogers and Umbro are entitled to be paid $25,000.00 for fees plus $3,250.00 for H.S.T. together with $3,831.29 for disbursement plus $346.62 for H.S.T. for a total of $32,427.91, and I so order.

[ 43 ] BMO is entitled to be paid $25,000.00 for fees plus $3,250.00 for H.S.T. together with $3,078.73 for disbursements plus $423.00 H.S.T. for a total of $31,728.96.

[ 44 ] There will also be an order that the plaintiff indemnify the defendants with respect to any costs awards which may be made against them in connection with third party claims which they have issued as a result of the plaintiff’s claim.

Released: October 24, 2012

LOFCHIK J.

COURT FILE NO.: 10-18271
DATE: 2012-10-24

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: JOEY BOUDREAU Plaintiff/Respondent - and – BANK OF MONTREAL, ROGERS COMMUNICATIONS INC., NIKE CORPORATION, UMBRO INC., TIM HORTONS INC., TDL GROUP CORPORATION, STATE FARM INSURANCE COMPANY, BICK FINANCIAL LTD., DAN LAWRIE INSURANCE BROKERS LTD., MICHAEL LAMONT, AON INC. and HAMILTON TIGER CATS FOOTBALL CLUB INC. Defendants/Applicants REASONS FOR JUDGMENT LOFCHIK J. TRL:mg

Released: October 24, 2012