COURT FILE NO.: 07-CV-339646PD1
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ronen Levshtein, Plaintiff
AND:
Homer Ramirez, National Car Rental (Canada) Inc., Sarah Rouselle and Darren Rouselle, Defendants
BEFORE: Madam Justice Darla A. Wilson
COUNSEL: Ian Little and Piera Segreto, Counsel for the Plaintiff
David Lauder, Counsel for the Defendant, National Car Rental (Canada) Inc.
HEARD: By written submissions
ENDORSEMENT on costs
1This was an action for damages advanced by the Plaintiff stemming from a motor vehicle accident in which he was involved. The Defendant National Car Rental [“the Defendant”] defended the action on the issue of damages only, liability having been admitted in 2009. The Defendant driver, Ramirez, had been noted in default and did not participate in the trial. The Plaintiff sustained a fracture at C2 with resulting facet damage at C3 and C4. The Defendant did not dispute that the Plaintiff sustained an injury and did not challenge whether it met the threshold. Rather, the main area of contention was with respect to the extent of the loss of income advanced by the Plaintiff.
2The trial took place with a jury from January 7, 2013 with the jury returning its verdict on January 21, 2013. The jury awarded the Plaintiff general damages and loss of income damages for a total sum of $280,525.60 exclusive of interest.
3The offer to settle from the Plaintiff was delivered November 20, 2012 in the sum of $2,250,000.00 for damages plus interest and costs.
4The offer to settle served by the Defendant on December 19, 2012 was in the sum of $375,000.00 for damages, plus interest and costs.
The Plaintiff’s Position
5The Plaintiff submits that the offer to settle made by the Defendant does not comply with Rule 49.11 in that it did not deal with the co-Defendant Ramirez and because there was simply a figure offered for damages, it was impossible to break the number down to determine interest. Further, it is submitted that the timing of the offer just prior to Christmas did not afford the Plaintiff a proper opportunity to consider the offer and it is noted that the quantum of the offer was “far less” than what one of the pre-trial judges thought the case was worth.
6The Plaintiff requests costs of $120,425.00 plus taxes on a partial indemnity scale for the period from October 19, 2005 to December 19, 2012 plus disbursements of $22,416.16. A further sum of $129,225.00 for fees plus taxes is claimed for the period from December 19, 2012 until the end of the trial January 21, 2013 plus an additional $24,036.54 in disbursements on a partial indemnity scale. The total of the fees claimed is $296,102.70.
The Defendant’s Position
7The Defendant takes the position that the Plaintiff is entitled to partial indemnity costs to the date of the offer by the Defendant in December 2012 and argues that the Defendant is entitled to its partial indemnity costs thereafter.
8The Defendant submits that it ought to be awarded costs on a partial indemnity scale for the period from December 19, 2012 to the end of the trial fixed at $78,628.50 for fees plus HST of $10,221.71 for a total fee of $88,850.21. Disbursements for the same time period are requested in the sum of $23,041.10. The total therefore of fees, taxes and disbursements sought by the Defendant is $111,891.31.
Analysis
9At the outset, I note that the solicitor for the Plaintiff has requested judgment against the driver, Ramirez. This motion ought to have been made at trial in accordance with Rule 19.05(4) and it was not. Judgment was entered in accordance with the jury’s verdict and as such, I am functus. Mr. Little in his written submissions requests costs against the Defendant Ramirez but in these circumstances, I am unable to deal with this issue and any motion for judgment and costs against Ramirez ought to be made to another judge of this court.
The Plaintiff’s entitlement to costs
10It is not disputed that the Plaintiff is entitled to his costs up to the date of the offer to settle made by National Car, December 19,2012. Mr. Little seeks costs beyond this date arguing that the offer does not comply with Rule 49.11. It is suggested that the offer did not bind Ramirez and further, that it was unclear in its terms and that it required the signing of a release without indicating who was being released.
11I reject the submission that the offer to settle of the Defendant did not comply with the requirements of Rule 49. One of the purposes of offers to settle is to encourage parties to be reasonable and to resolve cases without the necessity of proceeding to trial. There are adverse cost consequences which can be visited upon a party who elects to proceed to trial in the face of a reasonable Rule 49 offer to settle.
12I have reviewed the offer served by the Defendant in this case. In my opinion, it is clear on its face: the sum of $375,000 was offered for all damages, net of all statutory deductions including collateral benefits; interest on that sum and costs to be agreed upon or assessed. The Plaintiff could have ascertained exactly what was being offered to resolve his claim and what he would have ended up with after payment of fees and disbursements.
13The Plaintiff’s offer included the sum of $250,000 for general damages plus $2,000,000 for special damages plus interest and costs. In my view, this was not a reasonable compromise of the Plaintiff’s position based on the evidence in the file; it posed little or no risk to the Defendant of the Plaintiff exceeding his offer at trial and the Defendant having to bear the adverse cost consequences.
14There is no reason in this case to depart from the usual ramifications of Rule 49 offers. The Plaintiff is entitled to costs on a partial indemnity scale to the date of the Defendant’s offer and the Defendant is entitled to partial indemnity costs thereafter.
The Quantum of the Plaintiff’s Costs
15I state at the outset that I have taken into account the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario 2004 14579 (ON C.A.), (2004), 71 O.R. (3rd) 291 (C.A.), specifically, that the overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant. I do not propose to go through each item and conduct an assessment of the Bill of Costs. Rather, I will fix costs bearing in mind the principle of proportionality and the factors enumerated in Rule 57.01.
16In my view, this trial was not a complex matter for counsel. Both lawyers are experienced trial counsel who practice in the field of personal injury and insurance litigation. Liability vis-à-vis the Plaintiff was not in issue. The severity of his injury was not contested and there was no threshold motion brought. Rather, the trial focussed on what impact the injury had on the Plaintiff’s ability to pursue his university education and later, his employment.
17Ms. Segreto handled the file from 2005 until shortly before trial, approximately 7 years. Mr. Little became involved shortly before trial. Ms. Segreto is a 2005 call while Mr. Little was called to the Bar in 1986. Mr. Little submits that the time incurred by Ms. Segreto is reasonable, as is his own time. I do not agree.
18According to the material submitted, the Plaintiff’s counsel and law clerks had more than 1,100 hours of time docketed on the file up to December 19, 2012. It is submitted that these hours were necessary because of the WSIAT application that was launched by the Defendant and the necessity of attending at 3 pre-trial conferences. I do not accept this submission. The WSIAT application did not proceed and it is common for counsel to attend more than one pre-trial on a file such as this one. In my view, there was nothing unusual in this case that would justify spending more than 1,100 hours before the trial commenced, particularly by counsel who are very experienced in personal injury claims. In my opinion, the appropriate quantum of fees up to December 19, 2012 for the solicitor for the Plaintiff is $75,000 plus taxes.
19I turn to the disbursements totalling $21,072.80 plus HST of $1,343.36 for a total of $22,416.16. It is important to keep in mind these disbursements were incurred prior to the trial starting. In reviewing the list, I note that the accountant’s invoices total $8,690 the bulk of which appears to be for preparation of reports and revised reports as well as trial preparation. This does not include the $6,815 fee for work done post December 19. The fact that the Plaintiff’s counsel decided to revise reports at a considerable expense is not something that ought to be visited upon the Defendant. I do not dispute that the disbursements were incurred by the Plaintiff and may form part of a solicitor/client bill, but that does not mean that the Defendant must pay them as costs on a partial indemnity basis. In my view, the quantum of disbursements is excessive. The Plaintiff had a significant orthopedic injury which was not disputed by the Defendant. One wonders why it was necessary to retain another orthopedic surgeon to provide an expert report as well as a physiatrist, particularly in view of the fact that there were other therapists retained to comment specifically on any limitations caused by the injuries. It seems there was duplication in terms of opinions sought from various practitioners in different health disciplines. This is unnecessary and ought not to be countenanced by payment of the disbursements associated with these expert reports. In my opinion, a reasonable amount for disbursements up to December 19 is $20,000.00 on a partial indemnity scale.
20After taking into account the facts of this case as well as the factors set out in Rule 57, I am of the view that fees of $75,000 plus taxes as well as disbursements of $20,000 are fair and reasonable in all of the circumstances and I fix the costs of the Plaintiff to December 19 on a partial indemnity scale in that amount.
The Quantum of the Defendant’s Costs
21I turn now to the costs of the Defendant on a partial indemnity scale from the time of the offer through trial to verdict. Mr. Lauder claims for his time at a rate of $300/hour which is very fair for a solicitor called in 1992. Mr. Lauder’s time is quantified at 167 hours post-offer. The junior counsel at trial claims 121 hours at a rate of $175/hour. Clerk time is quantified at 71 hours at a rate of $80/hour. The total fee requested is $88,850.21 inclusive of HST. There is some duplication and overlap of work between senior and junior counsel. The time claimed is $78,628.50 plus HST of $10,221.71 for a total fee of $88,850.21. I would reduce the fee amount to $75,000 plus taxes.
22The disbursements claimed are $23,041.10 inclusive of HST. Of this amount, almost half is for the expert Dr. Berbrayer, a physiatrist. His bill totals $10,204.66. In my opinion, this is excessive and must be reduced.
23Bearing in mind that I am not conducting an assessment but rather attempting to arrive at a figure for costs that is fair, reasonable and proportional, it seems to me that a figure of $20,000 for disbursements is appropriate and I fix the disbursements of the Defendant in that amount.
24Counsel for the Defendant in written submissions suggests that in the specific circumstances of this case, the costs of each party ought to be fixed in very similar amounts, justifying a set off as between the parties. I agree. In my view, given the timing of the Defendant’s offer to settle, the costs of the Plaintiff to the time of the Defendant’s offer are approximately the same on a partial indemnity scale as the costs of the Defendant from December 19, 2012 forward so the amounts set each other off. I would fix each party’s costs for the respective periods of time at fees of $75,000 plus taxes and disbursements of $20,000 inclusive of taxes. This results in no net payment to either side for costs.
25If there is anything further arising out of my costs endorsement, I may be contacted through Judges’ Administration. I wish to thank counsel for the courtesy demonstrated to each other throughout the course of the trial, as well to the Court.
D.A. Wilson J.
Date: June 21, 2013