BARRIE COURT FILE NO.: 07-1083

DATE: 20120131

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ROBERT HOWELL, Plaintiff

AND:

JUSTIN YOURK and CARLA HOOD, Defendants

BEFORE: QUINLAN J.

COUNSEL:
M.S. Rastin/A.W. Wong, Counsel for the Plaintiff
L. Visconti/C. Temple, Counsel for the Defendants

HEARD: by written submissions

COSTS ENDORSEMENT

OVERVIEW

[ 1 ] After a thirteen day jury trial on a pedestrian motor vehicle accident case, the plaintiff was awarded damages totalling $481,000. The jury verdict exceeded the amounts set out in the plaintiff’s offer to settle. The plaintiff seeks his costs, inclusive of disbursements, totalling $431,353.12, relying in part on an offer served pursuant to rule 49 of the Rules of Civil Procedure .

BACKGROUND

[ 2 ] On February 22, 2007, the plaintiff was on the roadway at the side of his motor vehicle. The defendant lost control of his car on an icy road and crossed the centre line. The plaintiff was either struck by the defendants’ motor vehicle or jumped out of the way, likely onto the defendants’ motor vehicle, to avoid being hit. The plaintiff was thrown a number of feet and sustained injuries.

[ 3 ] Both liability and damages were in dispute.

[ 4 ] On June 1, 2009 the plaintiff served a request seeking that the defendants admit that the defendant motor vehicle struck the plaintiff. The defendants denied the truth of that fact.

[ 5 ] On March 28, 2011, the plaintiff served a further request seeking that the defendants admit that the defendant lost control, crossed the centre line, sideswiped the plaintiff, struck the plaintiff or, in the alternative to striking the plaintiff, approached the plaintiff forcing the plaintiff to move away. The request to admit further set out that the plaintiff sustained injury either as a result of being struck by the defendants’ vehicle or as a result of evading the defendant vehicle’s approach. The defendants denied the truth of all facts.

[ 6 ] On May 5, 2011 the plaintiff served an offer to settle for damages totalling $327,298, plus costs as agreed upon or fixed by a judge.

[ 7 ] After a thirteen day trial before a jury, the jury awarded the plaintiff total damages of $481,000.

POSITIONS OF THE PARTIES

Plaintiff

[ 8 ] The plaintiff seeks costs on a partial indemnity basis up to the date of his offer and costs on a substantial indemnity basis thereafter.

[ 9 ] The position of the plaintiff is that:

(a) Costs should follow the event. Rule 49.10 should apply regardless of the level of reasonableness of the defendants’ settlement position.

(b) The hours claimed are reasonable. Effort was not duplicated. Various actions of the defendants made the action more difficult and resulted in some wasted time.

(c) Disbursements, in particular the costs of attendance of the family physician and the expert in quantification of economic damages, are reasonable and allowable and were reasonably necessary for the conduct of the proceeding.

Defendants

[ 10 ] The defendants take the position that:

(a) It was not unreasonable to have taken the action to trial: there was a disagreement on the basis for any future loss of income as well as the manner in which to value same. Any award would depend on the plaintiff’s credibility which could be undermined by surveillance evidence. Any award for future loss of income could be affected by other health issues from which the plaintiff suffered.

(b) The hours claimed are excessive. There is duplication of effort between counsel. The action was not overly complex and the defendants’ conduct did not unnecessarily lengthen the proceeding. One day of trial time should not be allowed because of the conduct of the plaintiff and his witnesses that resulted in a delay in the calling of evidence and the need for submissions on various issues.

(c) There is no egregious or reprehensible behaviour by the losing defendants and, as such, substantial indemnity costs should not be awarded.

(d) The court must consider principles of proportionality and award an amount that is fair and reasonable in all the circumstances.

(e) The amounts sought for disbursements for the family physician and the economic loss expert are excessive. The defendants also take issue with certain smaller amounts of the claim for disbursements.

(f) A reasonable award of costs would be $88,140; a reasonable amount for disbursements would be $75,000.

GENERAL PRINCIPLES

[ 11 ] The award of costs is governed by s.131 of the Courts of Justice Act , R.S.O. 1990, c.C.43 and by rule 57.01 of the Rules of Civil Procedure. Section 131 gives the court a general discretion to fix costs. Rule 57.01 provides guidance in the exercise of that discretion by enumerating certain factors that the court may consider when assessing costs.

[ 12 ] In addition, rule 49.10 of the Rules of Civil Procedure provides costs consequences where a party fails to accept an offer. In particular, where a plaintiff makes an offer that is not accepted and obtains a judgment as favourable as or more favourable than the terms of the offer to settle, rule 49.10 provides that the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs thereafter, unless the court orders otherwise.

[ 13 ] A court should depart from the prima facie costs consequences in rule 49.10 only where, after giving proper weight to the policy of the rule and the importance of reasonable predictability and considering the even application of the rule, the interests of justice require a departure. The good faith of the party who did not accept the offer should not be given significant weight. [1]

[ 14 ] The intent of rule 49.10 is to induce settlements and avoid trials. Tinkering with the prima facie operation of rule 49.10 will destroy the predictability necessary for the rule to accomplish its purpose. [2]

[ 15 ] The general principle is that the substantial indemnity scale “is intended to be a complete indemnification for all costs (fees and disbursements) reasonably incurred in the course of prosecuting or defending the action or proceeding, but is not, in the absence of a special order, to include the costs of extra services judged not to be reasonably necessary”. [3]

[ 16 ] It is only where it can be concluded that the plaintiff was unreasonable in calling an expert that the cost of doing so may be disallowed. [4]

[ 17 ] Efforts of counsel that demonstrate a collaborative approach as opposed to duplication of effort, and are reasonable and beneficial to the plaintiff, do not support a finding of duplication. [5]

[ 18 ] Ultimately, in fixing an amount for costs, the overriding principles are fairness and reasonableness. [6]

PRINCIPLES APPLIED

[ 19 ] I see no reason to depart from the prima facie cost consequences in rule 49.10. Predictability is necessary for the rule to accomplish its purpose.

[ 20 ] As demonstrated by the jury’s verdict, the plaintiff’s offer was reasonable and represented a true compromise as anticipated by rule 49. The plaintiff achieved a result that was more favourable than the terms of the offer to settle. The position taken by the defendants does not support a departure from the general rule.

[ 21 ] As noted in Rajic v. Atkins , [7]

[i]t is a well-known principle that the purpose of rule 49 is to encourage parties to make reasonable offers to settle to resolve litigation short of a trial. If a party chooses to proceed to trial in the face of a reasonable offer to settle from the adverse party, he or she does so knowing that there may be adverse cost consequences. The Court has a wide discretion with respect to making orders of costs and the particular facts of the situation giving rise to the entitlement of costs must be scrutinized.

[ 22 ] I turn now to the question of quantum. I find that the hourly rates sought by the plaintiff, on both a partial indemnity and substantial indemnity basis, are reasonable and in line with what other courts have awarded. [8]

[ 23 ] I agree with the plaintiff’s position that the defendants’ failure to admit any facts regarding liability made the within action more difficult. The jury had to deal with the issues of both liability and damages. This had the effect of lengthening unnecessarily the duration of the proceeding. The plaintiff was required to prepare for a number of witnesses who were not ultimately called by the defendants. The plaintiff had to respond to a late motion, with short notice, to exclude expert evidence.

[ 24 ] Some trial time was lost as a result of evidence given by the plaintiff. However, a portion of that time was sought by the defendants to obtain instructions on whether to seek a mistrial that they ultimately chose not to pursue.

[ 25 ] I am satisfied, on a review of the dockets and a consideration of the division of responsibilities at trial, that there was no unnecessary duplication between lead and junior counsel. [9]

[ 26 ] The hours claimed by each counsel for the plaintiff are nevertheless excessive. A total of 380 hours were claimed by lead and junior counsel, for steps taken after discoveries to and including trial preparation. Over 200 hours were claimed for clerks’ time. Even though those steps included settlement discussions, mediation, pre-trial and trial preparation, I find that is excessive.

[ 27 ] The overriding principles are fairness and reasonableness. Such costs are an amount well beyond what an unsuccessful party could reasonably expect to pay.

[ 28 ] Insofar as the disbursements are concerned, I find that the amount claimed for the attendance of the treating physician ($5,474.82) is excessive. Three reports of the economic loss expert are claimed yet only two reports were provided. The quantum claimed for that expert for preparation and attendance at trial for less than one day ($14,147.50) is far in excess of the amounts claimed by the other experts. The plaintiff has provided no basis for the payment of travel costs of counsel, especially given the fact that they have an office in Barrie where the trial was held.

[ 29 ] The assessment process is ultimately not a mechanical exercise. [10] Taking the contextual approach that appellate courts have suggested, and considering the factors outlined above, I find that a fair and reasonable figure to award in all the circumstances is $250,000 for costs and $80,000 for disbursements.

[ 30 ] Accordingly, the defendants shall pay the plaintiff his costs in the amount of $330,000 inclusive of HST and disbursements.

ISSUE REGARDING DIRECTIONS

[ 31 ] The parties cannot agree on the amount that is to be deducted, if any, for amounts paid to the plaintiff for accident benefits by way of settlement.

[ 32 ] Should the parties be unable to resolve this issue, they may make arrangements through the trial co-ordinator to bring the matter before me for argument after the filing of brief written submissions.

QUINLAN J.

Date: January 31, 2012

[1] Niagara Structural Steel (St. Catharines) Ltd. v. W.D. Laflamme Ltd. (1987), 58 O.R. (2d) 773 (C.A.)

[2] Jacuzzi Can. Ltd. v. A. Mantella & Sons Ltd. (1988), 31 C.P.C. (2d) 195 (Ont.H.C.)

[3] Apotex Inc. v. Egis Pharmaceuticals and Novopharm Ltd. (1991) , 4 O.R. (3d) 321 at 325 (Gen.Div.) as referred to in Murano v. Bank of Montreal (1998), , 41 O.R. (3d) 222 at 247 (C.A.)

[4] Cheskin v. Schrage , [1986] O.J. No. 680 (H.C.)

[5] Dybongco-Rimando Estate v. Lee , [2003] O.J. No. 534 (S.C.J.) at para. 29-32

[6] Boucher v. Public Accountants Council for the Province of Ontario (2004), , 71 O.R. (3d) 291 (C.A.); Moon v. Sher (2004), , 246 D.L.R. (4 th ) 440 (Ont.C.A.)

[7] 2011 ONSC 6771 (S.C.J.) at para. 11

[8] Moore v. Cote , [2008] O.J. No. 3541 (S.C.J.)

[9] Counsel’s time is verified through their dockets and confirms a collaborative approach as opposed to duplication of effort.

[10] Zander Sod Co. Limited v. Solmar Development Corp. 2011 ONSC 3874