ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 24731/09

DATE: 2013-02-20

BETWEEN:

WANDA OLIVIER

Plaintiff

– and –

803295 ONTARIO INC., O/A PAT AND MARIO’S RESTAURANTS INC.

Defendants

O. Rosa, for the Plaintiff
S. Shoemaker, co-counsel

M. Nanne, for the Defendants

HEARD: September 10 – September 20, 2012

reasons ON COSTS

JUSTICE E. GAREAU:

[1] On January 16, 2013, I released a 17-page decision dealing with the issues that proceeded to trial before me, initially with a jury which was later discharged, spanning from September 10, 2012 to September 20, 2012.

[2] Subsequent to the release of my Reasons, I have received and reviewed written submissions from counsel for the parties on the issue of costs.

[3] The plaintiff enjoyed the overwhelming preponderance of success in this litigation. On the issue of liability, the court held the defendant 75% liable. The defendant’s position at trial was that it had no liability for the accident. On the issue of damages, the court awarded an amount in the range suggested by the plaintiff and not the lower amount suggested by the defendants. Although the defendants, on the issue of costs, suggest that success was divided on the issue of liability, this is really not the case given the defendant’s position advanced throughout the trial that the plaintiff was solely responsible for the accident and therefore solely responsible for her injuries.

[4] As set out in Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. 43 costs are in the discretion of the court subject to any provision in the Rules that may assist the court in the exercise of its discretion.

[5] In the exercise of its discretion under Section 131 of the Courts of Justice Act, to award costs, the court may consider the result in the proceeding, any offer to settle made in writing and the factors set out in Section 57.01(1) of the Rules of Civil Procedure.

[6] In deciding the issue of costs, it is important for the court to consider the offers to settle submitted by the parties prior to the trial of the action. In this regard, it should be noted that the plaintiff submitted the following offers to settle:

(a) February 24, 2012 - $30,000.00 inclusive of pre-judgment interest and costs;

(b) April 12, 2012 - $22,500.00 inclusive of pre-judgment interest and costs;

(c) April 23, 2012 - $20,000.00 inclusive of pre-judgment interest and costs;

(d) September 9, 2012 – (the day prior to the trial commencing) - $30,000.00 plus pre-judgment interest and costs.

[7] The defendants’ offers to settle were all premised on the basis that it had no liability for the accident. The defendants submitted the following offers to settle:

(a) December 17, 2009 – dismissal without costs;

(b) January 22, 2010 – “as there is no liability in this matter, we have received instructions from our client to agree to a dismissal on a without costs basis. The mediation shall be a formality in order to repeat this offer.”;

(c) September 5, 2012 – “Please note that all previous offers made by the defendant are hereby withdrawn.”

[8] It is very clear from a review of the offers to settle that the result the plaintiff achieved at trial exceeded all offers which were made prior to trial. The closest to the trial result is the offer made by the plaintiff on September 9, 2012, one day before trial, in which the plaintiff offered to resolve the action by payment of $30,000.00 plus pre-judgment interest and costs. The award at trial was $38,261.99 for general and special damages which, with pre-judgment interest added, totaled $47,833.23.

[9] The offers exchanged alone should entitle the plaintiff to her costs. I have carefully considered the submissions of the defendant with respect to Rule 76 of the Rules of Civil Procedure. Rule 76 provides for a simplified procedure for claims up to $25,000.00 (prior to January 1, 2002), claims up to $50,000.00 (prior to January 1, 2010) and claims up to $100,000.00 effective January 1, 2010. The limits are amounts excluding pre-judgment interest and costs. Under the simplified procedure, there is a limit to discovery and strict requirements as to production of documents. Rule 76 allows for a summary trial designed for very short trials in simple cases. In a summary trial, the examination in-chief is adduced by affidavit with time limits imposed on cross-examination (50 minutes) and re-examination (10 minutes).

[10] The statement of claim in this action was issued on March 2, 2009 and the judgment obtained fell within the $50,000.00 limit contemplated in Rule 76.

[11] Rule 76 specifically sets out costs consequences for judgment awards of money. that is $50,000.00 or less, exclusive of interest and costs (for actions commenced prior to January 1, 2010). Specifically, Rule 76.13(3) reads as follows:

(3) The plaintiff shall not recover any costs unless,

(a) the action was proceeding under this Rule at the commencement of the trial or

(b) the court is satisfied that it was reasonable for the plaintiff (i) to have commenced and continued the action under the ordinary procedure, or (ii) to have allowed the action to be continued under the ordinary procedure but not abandoning claims or parts of claims that do not comply with subrule 76.02(1), (2) or (2.1).

[12] Rule 76.13(4) provides that “subrule (3) applies despite subrule 49.10(1) (plaintiff’s offer to settle).

[13] Therefore, the court can deny the plaintiff its costs under Rule 76 (13) despite the fact that the plaintiff made favourable offers to settle under Rule 49 to resolve the litigation. As noted by Spiegel, J. in the case of Kincses v. 32262 B.C. Ltd. (c.o.b. Macey Leon) [1998] O.J. No. 6582 at paragraphs 11 and 12 of that decision:

“11 In my view the purpose of these provisions is to impose a continuing obligation on a party commencing an action under the ordinary procedure to make a realistic appraisal from time to time of the outcome of the action and to amend pursuant to Rule 76.03(1), if at any time prior to commencement of trial it appears unreasonable to continue the action under the ordinary procedure. This may involve some adverse costs consequence under Rule 76.03(5), but they are far less drastic than those that flow from Rule 76.10. As long as the action is under the simplified procedure at the commencement of trial the plaintiff is relieved of the costs consequences of Rule 76.10(2).

12 It is significant that Rule 76.10(2) applies despite Rule 49.10(1). Thus the negative costs consequences to a plaintiff for unreasonable failure to commence or to continue an action under the simplified procedure override the normally favourable costs consequences to the plaintiff of having made an offer to settle which meets the criteria of Rule 49.10(1). Similarly the costs which the court may award the defendant under subrule 5, are in addition to those which the plaintiff may be required to pay under Rule 49.10(2), for having refused a defendant’s offer to settle.

[14] Rule 76.13(3)(b) provides the court with discretion not to apply Rule 76.13 to deny the plaintiff its costs if the court is satisfied that it was reasonable for the plaintiff to have commenced and continued the action under the ordinary procedure and not the simplified procedure under Rule 76. In examining the totality of this action, I am satisfied that Rule 76.13(3) (b)(i) applies and that it was reasonable for the plaintiff to have commenced and to have continued this litigation under the ordinary procedure. The plaintiff’s statement of claim pled damages outside the $50,000.00 limit. This action involved an elderly plaintiff with significant injuries and it was reasonable for the plaintiff to do so. It was not in the interests of the plaintiff to be restricted in the discovery process given the nature of this case. It would have been unreasonable to expect the plaintiff to adhere to the confines in evidence and timelines that a summary trial provides given the nature of this case, the defendant’s entrenchment on the issue of liability and the fact that the defendant filed a jury notice in this action on April 14, 2009. This matter proceeded before a jury who heard all the evidence prior to being discharged. It would have been an impracticality to have a jury hear the evidence in this case under a summary trial procedure under the simplified Rule 76. This case required an ordinary trial and the ordinary litigation procedure and it was reasonable for the plaintiff to proceed in this fashion.

[15] I am not satisfied that the application of Rule 76 should deprive the plaintiff of her costs of this action. The plaintiff is entitled to her costs on a partial indemnity basis prior to February 24, 2012 and on a substantial indemnity basis after February 24, 2012 when the first written offer was made, followed by subsequent offers – all of which were more favourable to the defendant than the ultimate outcome of this trial and should have been accepted by the defendant.

[16] In reviewing the bill of costs submitted by the plaintiff and the appropriate quantum of costs, I am guided by Rule 57.01(1) of the Rules of Civil Procedure. Although this was not a complex proceeding, it was lengthened and turned into a difficult proceeding by the conduct of the defendant. The trial was plagued by ongoing issues concerning lack of disclosure, both of evidence and documents by the defendant. Ultimately, the jury had to be discharged in this case. As noted in paragraph 14 of my decision to dismiss the jury, dated October 16, 2012, “the failure of the defendant to disclose this evidence seriously impaired the fairness of the trial.” This case was unduly complicated by the defendant’s non-disclosure and its position on the apportionment of liability, which became increasingly untenable as the evidence of its very own witnesses, in particular, George Moustasos, unfolded.

[17] The plaintiff has submitted a bill of costs totalling $111,798.43 for fees, excluding H.S.T. and disbursements. Of these costs $13,760.63 are submitted as partial indemnity costs incurred before February 23, 2013 and $98,037.50 is for substantial indemnity costs incurred after February 24, 2012. The latter costs include the counsel fee for both Mr. Rosa and Mr. Shoemaker at trial, which spanned over 8 days from September 10, 2012 to September 20, 2012. In reviewing the bill of costs, I take no issue with the hourly amounts claimed as follows:

Melanie Borowicz $200.00/hour

Steven Shoemaker $225.00/hour

Orlando Rosa $450.00/hour

Articling Student $150.00/hour

[18] I do take issue with some of the hours claimed in the bill of costs, which I view to be excessive, given the nature and complexity of the issues in this case. In particular, I am not prepared to allow a counsel fee for Mr. Shoemaker’s attendance at the trial which was unnecessary given Mr. Rosa’s experience, although I am prepared to allow some of the time claimed for Mr. Shoemaker for attendances on the file out of court to assist Mr. Rosa, while the trial was underway. I have also allowed a counsel fee at trial for Mr. Rosa of $4,000.00 per day, which I deem to be the appropriate amount on a substantial indemnity basis. In summary, my view of the appropriate amounts given the nature of this case are as follows:

Pre-February 23, 2012 (partial indemnity) $ 7,000.00

Post February 23, 2012 to the commencement of trial 16,000.00

Including pre-trial preparation (substantial indemnity)

Trial - counsel fee $32,000.00

• preparation 9,000.00 41,000.00

(during the course of the trial)

Post-trial attendances

(including receipt of judgment, submissions as to costs) 6,000.00

(substantial indemnity)

TOTAL: $70,000.00

[19] Therefore, the costs to the plaintiff are fixed at $70,000.00 plus H.S.T. of 13% or $9,100.00 for a total of $79,100.00. Added to this amount are disbursements fixed in the amount of $5,000.00, inclusive of H.S.T. The total, inclusive of fees and disbursements and H.S.T., is $84,100.00.

[20] There shall be an order that the defendants pay to the plaintiff costs of this action which are fixed at $84,100.00 payable forthwith.

Justice E. Gareau

Released: February 20, 2013

COURT FILE NO.: 24731/09

DATE: 2013-02-20

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

WANDA OLIVIER

Plaintiff

– and –

803295 ONTARIO INC. O/A PAT AND MARIO’S RESTAURANTS INC.

Defendants

REASONS ON COSTS

Justice E. Gareau

Released: February 20, 2013