ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 08-CV-349949 PD1
DATE: 20121204

RE: Persaud v. Bratanov and Unifund Assurance Co.

BEFORE: Mr. Justice Kenneth L. Campbell

COUNSEL:
David Zarek for the Moving Party Defendant, Juliet Bratanov

John Graham for the Responding Party Defendant, Unifund Assurance Co.

ENDORSEMENT (COSTS)

A. Introduction

[ 1 ] On September 17, 2012, I released Reasons for Judgment in this case, concluding that the summary judgment motion by the defendant, Juliet Bratanov, must be granted, and the claims against her by the Persaud plaintiffs and the defendant, Unifund Assurance Co., must be dismissed in their entirety. See: Persaud v. Bratanov and Unifund Assurance Co., 2012 ONSC 5232.

[ 2 ] The only remaining issue is costs. Following the release of the Reasons for Judgment, 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 ] Ms. Bratanov, the successful moving party defendant, seeks a costs order in her favour totaling $110,463.28. More particularly, with respect to the summary judgment motion, Ms. Bratanov seeks partial indemnity costs totaling $24,292.47, including all disbursements and taxes, against the responding defendant Unifund. Given that the plaintiffs had indicated from the outset that they would not oppose the summary judgment motion, Ms. Bratanov does not seek any of these summary judgment motion costs against the plaintiffs. With respect to the other costs associated with defending the action, Ms. Bratanov seeks partial indemnity costs totaling $86,170.81, and suggests that this appears to be an appropriate case for a Sanderson Order requiring that some or all of these costs be specifically assessed against the defendant Unifund.

[ 4 ] The Persaud plaintiffs essentially advance the same position as Ms. Bratanov. More particularly, the plaintiffs argue that as they indicated from the outset that they would not be opposed to Ms. Bratanov’s summary judgment motion, they should bear no costs consequences for Ms. Bratanov’s pursuit of that motion. Further, the plaintiffs contend that this is a case where a Sanderson order should be made requiring the defendant Unifund to pay Ms. Bratanov’s partial indemnity costs of the action.

[ 5 ] The defendant Unifund appears to concede that Ms. Bratanov is entitled to her partial indemnity costs in relation to her successful summary judgment motion, but in a reduced amount. While Unifund has not expressly suggested an appropriate quantum for these partial indemnity costs, Unifund has argued that: (1) the overall quantum of damages likely to be agreed on or awarded to the Persaud plaintiffs is “significantly less” than the $1.1 million claimed in their Statement of Claim; (2) while the facts of this case are unusual, they are not particularly complex, and the legal questions raised by the motion were not especially complicated; and (3) Ms. Bratanov ought not be permitted any costs in relation to certain preliminary motions designed to gather relevant documents, such as transcripts and exhibits from the Crown and police files, for use by the parties in the civil proceedings. However, Unifund has provided its own Costs Outline in relation to the summary judgment motion which suggests that, had it been successful, Unifund would have sought a partial indemnity costs award of more than $21,153.76.

[ 6 ] Unifund contends that Ms. Bratanov should not be awarded any costs at all in relation to the action itself. Unifund advances this position on the basis that, while the summary judgment motion resolves the question of the potential liability of Ms. Bratanov, it did not resolve the question of whether or not Ms. Bratanov’s insurer is ultimately responsible, in whole or in part, for the plaintiffs claim. Indeed, Unifund claims that the summary judgment motion will have the “paradoxical effect of lengthening the proceedings and leading to subsequent litigation,” as Unifund may eventually be able to proceed directly against Ms. Bratanov’s insurer for some or all of the plaintiffs damages. Unifund made no submissions in relation to the Sanderson order requested by Ms. Bratanov and the Persaud plaintiffs, but provided its own Costs Outline in relation to the action (excluding the summary judgment motion) totaling $55,639.21. I interpret this to mean that Unifund takes the position that, if Ms. Bratanov is to be awarded her partial indemnity costs of the action payable by Unifund pursuant to a Sanderson order, the quantum of those costs should be significantly reduced.

C. Analysis

1. The Costs of the Summary Judgment Motion

[ 7 ] Ms. Bratanov was entirely successful on her summary judgment motion and is therefore entitled to her costs of the motion on a partial indemnity basis. Understandably, Ms. Bratanov does not seek these costs against the Persaud plaintiffs, as they indicated from the very outset that they would not be opposed to this summary judgment motion. As already mentioned, the plaintiffs agree with this position and argue that they cannot fairly be held responsible for Ms. Bratanov’s summary judgment motion costs when Unifund was the only party that resisted the motion. I do not read the written submissions of Unifund as advancing a contrary position. In these circumstances, in my view it is only fair that Ms. Bratanov’s partial indemnity costs of the motion be ordered against her only adversary on this aspect of the litigation, namely, Unifund.

[ 8 ] As to the specific quantum of those partial indemnity costs, the parties have not advanced especially divergent positions. Ms. Bratanov has provided a detailed Costs Outline in support of her request for partial indemnity costs totaling $24,292.47. The Costs Outline provided by Unifund in relation to this motion suggests that it incurred partial indemnity costs totaling $21,153.76. However, the Costs Outline from Unifund did not include any amount for a “counsel fee” in relation to the appearance to actually argue the summary judgment motion. Had such an amount been included, it is apparent that the parties’ costs submissions would have been much closer than the $3,138.71 difference that now separates their respective Costs Outlines.

[ 9 ] In my view, the close proximity of these Costs Outlines strongly suggests that the quantum of the partial indemnity costs claimed by Ms. Bratanov is well within the range of potential costs orders that Unifund could reasonably expect to pay if unsuccessful in its opposition to the summary judgment motion by Ms. Bratanov.

[ 10 ] Having regard to all of the circumstances of this case, including all of the various steps that were necessary to properly perfect and argue this summary judgment motion, and taking into account all of the relevant factors outlined in Rule 57.01 of the Rules of Civil Procedure, in my view the quantum of partial indemnity costs sought by Ms. Bratanov in relation to this motion is fair and reasonable. I simply see no sound basis to properly reduce the amount claimed by counsel for Ms. Bratanov in relation to this motion. See: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.); Davies v. Municipality of Clarington (2009), 2009 ONCA 722 at para. 50-56.

[ 11 ] In this regard it is important to recall that: (1) the Persaud plaintiffs had advanced a very significant monetary claim in relation to the damages flowing from the tragic death of Kevin Persaud; (2) the issues raised on the motion were matters of some factual and legal complexity; and (3) the perfection of the summary judgment motion by counsel for Ms. Bratanov required the time-consuming gathering and analysis of the voluminous transcripts, exhibits, and other files in connection with the earlier criminal proceedings.

[ 12 ] Accordingly, I fix Ms. Bratanov’s partial indemnity costs at a total of $24,292.47, including all disbursements and applicable taxes, and order that those costs to be paid by the defendant Unifund.

2. The Other Costs of the Action

a. Introduction

[ 13 ] The defendants advance much more divergent positions in relation to the other costs of the action. Ms. Bratanov seeks partial indemnity costs totaling $86,170.81, and seeks a Sanderson Order requiring that these costs be paid by Unifund. On the other hand, Unifund argues that Ms. Bratanov is not entitled to any of her costs in relation to her defence of the action, but that, if such costs are ordered, they should be in a significantly reduced quantum, more in keeping with the Unifund Costs Outline totaling $55,639.21. Unifund has not expressed any opposition to the proposed Sanderson Order requiring it to pay Ms. Bratanov’s costs in connection with the action.

b. The Successful Party is Entitled to Costs

[ 14 ] I reject Unifund’s argument that Ms. Bratanov is not entitled to any of her other costs in relation to her defence of this action. It may be, as Unifund has speculated, that there will be more proceedings in the future in this case and such proceedings may engage Unifund and Ms. Bratanov’s insurer. The future is difficult to predict. But, even if such litigation were accepted as inevitable, that would hardly be a sound legal reason to deprive Ms. Bratanov of her costs in relation to this action, in which her insurer is not a party. Unifund has provided me with no authority in support of its position that I am entitled to take into account potentially unresolved future insurance issues involving other parties in determining present costs issues, and I am not aware of any such authority. If there are future proceedings involving other parties, and further costs associated with those proceedings, presumably those costs consequences will be addressed and resolved by the judge involved in those future proceedings.

[ 15 ] For present purposes, it will suffice to observe that, in succeeding on her summary judgment motion, Ms. Bratanov has succeeded in defending herself against the claims made against her by the Persaud plaintiffs and by the defendant Unifund. In light of that clear success in the action, Ms. Bratanov is entitled to her partial indemnity costs in connection with the action.

c. Should a Sanderson Order Be Made?

[ 16 ] As I have already noted, as to who should be responsible for paying those partial indemnity costs, both Ms. Bratanov and the Persaud plaintiffs have suggested that this is an appropriate case for a Sanderson order requiring Unifund to pay these costs. Unifund has not advanced any express argument to the contrary. Rather, as I read the written submissions, Unifund does not dispute the fact that, if a costs order is to be made in favour of Ms. Bratanov in relation to the action, it should be made against Unifund as part of a Sanderson order. I agree.

[ 17 ] As McPherson J.A. observed in Moore v. Wienecke (2008), 2008 ONCA 162, 90 O.R. (3d) 463 (C.A.) at para. 41, the usual test for determining whether a Sanderson order is appropriate has two steps, namely: (1) the threshold question of whether it was reasonable for the plaintiff to join the several defendants together in one action; and (2) the discretionary question of whether such an order would be just and fair in all of the circumstances of the case. See also: Times Square Holdings Ltd. v. Shimizu, 2001 BCCA 667; Robertson v. North Island College Technical and Vocational Institute (1980), 26 B.C.L.R. 225 (C.A.).

[ 18 ] With respect to the “threshold question” I have no doubt that, in the circumstances of this case, it was reasonable for the Persaud plaintiffs to join both Ms. Bratanov and Unifund as defendants.

[ 19 ] In their Statement of Claim, the plaintiffs alleged: (1) that Ms. Bratanov was vicariously liable for the plaintiffs’ damages due to her ownership of the van that was criminally used to cause the death of Kevin Persaud; and (2) that Ms. Bratanov negligently entrusted her vehicle to her son, when she ought to have known that this created a real risk of harm to others. Subsequently, Unifund cross-claimed against Ms. Bratanov, making the same negligent entrustment allegation. Indeed, Unifund subsequently amended its pleading to further expand and particularize their negligent entrustment claim against Ms. Bratanov. Accordingly, it is apparent that, had the plaintiffs not included Ms. Bratanov as a party defendant, Unifund would have pursued her in any event. I observe in passing that Unifund refused to attend a mediation meeting in the absence of Ms. Bratanov’s participation.

[ 20 ] The plaintiffs also included their own insurer, Unifund, as a party defendant in their Statement of Claim in the event that Ms. Bratanov’s van was uninsured or inadequately insured. Indeed, it appears that the plaintiffs may have thought they were obliged to pursue this claim against Ms. Bratanov in order to avoid any potential argument by Unifund that they had failed to advance a claim against another person who may have had a valid liability insurance policy.

[ 21 ] With respect to the “discretionary question,” in my view a Sanderson order requiring Unifund to pay the partial indemnity costs of Ms. Bratanov in relation to the action would be just and fair in all of the circumstances of this case.

[ 22 ] The “foremost consideration” in this regard is whether the defendants tried to shift responsibility onto each other, as opposed to concentrating on meeting the plaintiffs’ case. Said another way, did the defendants try to load the great majority of the plaintiffs’ damages on the other? See: Moore v. Wienecke, at para. 46; Cheskin v. Schrage (1986), 10 C.P.C. (2d) 150 (O.H.C.J.) at p. 154. This is a fair and accurate description the conduct of Unifund (but not Ms. Bratanov) in this litigation. Unifund fought hard to demonstrate that Ms. Bratanov was potentially liable for the plaintiffs’ damages. Ms. Bratanov simply tried to defend herself against these claims. The plaintiffs themselves did not oppose the summary judgment motion by Ms. Bratanov. This “foremost consideration” clearly supports the fairness of a Sanderson order.

[ 23 ] The second factor arising from the case law relates to whether the unsuccessful defendant caused the successful defendant to be added as a party to the litigation. See: Moore v. Wienecke, at para. 48. There is no doubt that it was the Persaud plaintiffs who first engaged Ms. Bratanov in this litigation, not Unifund. At the same time, however, it is fair to observe that this step appears to have been taken by the plaintiffs to avoid any dispute with Unifund over whether they had joined all of the potential liable defendants. It is also fair to note that, if the plaintiffs had not included Ms. Bratanov as a party defendant, Unifund would have caused Ms. Bratanov to be added as a party defendant. Accordingly, in my view, this factor is somewhat neutral in the analysis. The plaintiffs in fact added Ms. Bratanov as a defendant, but Unifund would have added Ms. Bratanov in any event.

[ 24 ] The third factor flowing from the governing case law in this area is whether there are two separate and independent causes of action between the parties, or whether the claims arose from the same incident. See: Moore v. Wienecke, at para. 49; Scarborough Golf & Country Club v. Scarborough (City) (1988), 66 O.R. (2d) 257 (C.A.). It is clear that in the present case the dispute between all of the parties relates to a single incident or event. Accordingly, this factor supports the proposal for a Sanderson order.

[ 25 ] The fourth factor that has been identified by the case law is the “ability to pay.” See: Moore v. Wienecke, at para. 50; Cheskin v. Schrage, at p. 154. There seems to be no dispute between the parties that, as between the Persaud plaintiffs and Unifund Assurance Company, Unifund has a greater ability to pay any costs award made in relation to this action. Heeralal Persaud has been unemployed for some time, Shamiza Persaud has never returned to work after her son’s death, and Trevor Persaud is only 18 years old. This factor, accordingly, also supports the request for a Sanderson order.

[ 26 ] In the result, I am satisfied that a Sanderson order should be made requiring the defendant Unifund to pay the partial indemnity costs of the defendant Ms. Bratanov. More particularly, I am satisfied that it was reasonable for the plaintiffs to join the defendants together in one action, and that ordering Unifund to pay the costs of Ms. Bratanov would be just and fair in all of the circumstances of this case.

d. The Quantum of the Costs of the Action

[ 27 ] As to the precise quantum of Ms. Bratanov’s partial indemnity costs payable in relation to the action, I agree with the plaintiffs and Unifund that the total claimed costs of $86,170.81 are excessive in all of the circumstances of this case. As I have observed, there is no doubt that the plaintiffs’ claim against Ms. Bratanov was a very significant one and required her to launch a rigorous defence. Further the unusual circumstances of the case required some cumbersome procedural steps and presented some complex factual, evidentiary and legal issues. That said, in my view, Ms. Bratanov’s claim in relation to her partial indemnity costs for the action should be reduced to $75,000. I hereby fix her costs in that amount.

[ 28 ] Again, in reaching this conclusion I have considered all of the factors outlined in Rule 57.01 of the Rules of Civil Procedure and all of the circumstances of this case, including the experience level of Ms. Bratanov’s lawyers, the time they actually spent on the case, the rates billed to their client, the successful result that was achieved, the amount of the plaintiffs’ claims, and the overall importance and complexity of the proceedings. This costs award is a proportional one that an unsuccessful party could reasonably expect to pay for these proceedings.

[ 29 ] A $75,000 partial indemnity costs award, however, also appropriately recognizes that the “team approach” to litigation that was adopted by counsel for Ms. Bratanov in this case necessarily significantly increases legal fees by virtue of the duplication of efforts inherent in this approach. While it is not the role of the court to second guess the time spent by counsel on a particular case, an unsuccessful party cannot fairly be held responsible for costs incurred by the successful party where the time spent has been clearly excessive or where the case has been overly lawyered. With a team of five lawyers working on this case, there had to be a significant overlap in their responsibilities and a duplication of efforts. While such an approach may provide many professional and strategic benefits, it will invariably increase legal fees. Such a team approach may be entirely appropriate and reasonable as between the law firm and its client, but parties who adopt this approach to litigation cannot reasonably expect that the greater costs associated with this approach will always be borne by their unsuccessful adversary. Indeed, to the extent that this team approach results in clearly excessive costs or reveals that the case was overly lawyered, the excessive costs will not be permitted. In my view, the $75,000 sum that I have permitted in relation to this action avoids Unifund having to pay for any of the overlap and duplication inherent in the team approach to litigation undertaken by counsel for Ms. Bratanov. See: Royal Group Inc. v. Core Precision Technologies Ltd., 2011 ONSC 5818, at para. 13-16 (and the cases cited therein).

D. Conclusion

[ 30 ] In the result, the unsuccessful defendant, Unifund Assurance Company, shall pay the partial indemnity costs of the successful defendant, Juliet Bratanov, both with respect to the summary judgment motion and the other costs of the action. The plaintiffs are not responsible for the payment of any of these costs.

[ 31 ] As I have fixed those costs in relation to the summary judgment motion at $24,292.47, and fixed those costs in relation to the remainder of the action at $75,000, this requires Unifund is to pay Ms. Bratanov’s total partial indemnity costs in the amount of $99,292.47. This total figure is inclusive of all fees, disbursements, and applicable taxes.

[ 32 ] An order shall issue accordingly.

Kenneth L. Campbell J.

DATE: December 4, 2012