ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 51358/09
DATE: 2013/07/12
BETWEEN:
KRISTEN HANSEN, RANDY
CHEYNOWSKI and CALLUM
CHEYNOWSKI, a minor by his litigation
guardian KRISTEN HANSEN
Christopher A. Richard, for the Plaintiffs
Plaintiffs
- and -
ROBERT D. WILLIAMS
Kieran C. Dickson, for the Defendant
Defendant
The Honourable Madam Justice W.L. MacPherson
COSTS ENDORSEMENT
[1] The plaintiff, Kristen Hansen, had commenced a proceeding claiming damages for personal injuries arising out of a motor vehicle accident which occurred on July 19, 2007. Liability for the accident was admitted by the defendant and the only issues to be decided were what injuries were sustained by the plaintiff as a result of the accident and what amount of damages should be awarded for same.
[2] Following a two week jury trial, the jury rendered a verdict with general damages being assessed at $200,000.00; zero was awarded for past and future income loss; $5,600.00 was awarded for past housekeeping expenses and $28,000.00 was awarded for future housekeeping expenses; with zero being awarded for loss of care, guidance and companionship for the plaintiff’s son.
[3] The defendant brought a threshold motion which was heard while the jury was deliberating, and after the jury’s verdict was received and further submissions were heard, an order was made to dismiss the motion with costs to the plaintiff.
[4] I invited counsel to provide me with written submissions if they were unable to agree on the issue of costs. I have now had the benefit of those written submissions.
Position of Parties
[5] The plaintiff seeks costs in the amount of $365,845.17 (comprised of fees of $322,694.10, inclusive of HST of $37,124.10; and disbursements of $43,151.07 inclusive of HST of $2,237.16). There is a claim for partial indemnity costs to March 20, 2013, being the date that the plaintiff made an Offer to Settle (in the amount of $80,000.00 inclusive of interest, plus costs and disbursements) and substantial indemnity costs thereafter.
[6] The defendant concedes that the plaintiff is entitled to costs and that an award of substantial indemnity costs after the date of the Offer would be appropriate, but disputes the amount of fees as being excessive in all of the circumstances and disputes that all disbursements should be recovered.
Order
[7] Under section 131 of the Courts of Justice Act, it is within the general discretion of the Court to determine whether and to what extent costs are to be paid.
[8] Under Rule 57.01 (1) of the Rules of Civil Procedure the general principles to be considered in making a costs order are set out. These factors include: the principle of indemnity to include the experience of the lawyer for the party entitled to costs as well as the rates charged and the hours spent; the amount of costs that an unsuccessful party could reasonably expect to pay; the amount claimed and the amount recovered in the proceeding; the complexity of the proceeding; the importance of the issues; the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding; a party’s denial of or refusal to admit anything that should have been admitted; and any other matter relevant to the question of costs.
[9] There is no doubt that the issues in the action were very important to the plaintiff and her family.
[10] It is also clear that as the defendant had made no Offers to Settle, other than to have the action dismissed, the plaintiff had no choice but to proceed to trial.
[11] I accept the submissions made by plaintiff’s counsel that while proportionality is one of the factors to be considered, in certain cases, it is appropriate that the costs awarded exceed the damages which were awarded, with that being “a foreseeable risk of litigation and it should not accrue to the benefit of the losing party”.
[12] However, despite Rule 57.01 (5) which sets out that a party who is awarded costs shall serve a Bill of Costs, this was not done by plaintiff’s counsel. Instead, a summary of each lawyer’s involvement was provided and a summary of the time spent, together with a notation as to whether it was being claimed on a partial indemnity basis or substantial indemnity basis and the applicable hourly rate.
[13] This is further complicated by the fact that the plaintiff was represented by three different law firms during the course of the litigation. On the basis of the material filed, it is impossible to ascertain what amount of overlap there was in the steps taken, whether there was duplication of services and whether the amounts claimed were reasonable and necessary in all of the circumstances.
[14] The further difficulty in not being provided with a detailed Bill of Costs is that the Court is left with nothing to support the assertion made that it was necessary for the plaintiff to have two counsel in attendance throughout the trial. While the partial indemnity rate of $300.00 per hour and the substantial indemnity rate of $450.00 per hour may be entirely appropriate given the years of experience, the effect of granting the costs requested would essentially double the hourly rate to $600 per hour and $900.00 per hour and increase the cost award from $120,000.00 to more than $215,000.00, with no opportunity to assess whether there was duplication or overlap of services and whether the work done by each counsel was reasonable and necessary.
[15] With the question of liability being admitted, the remaining issue of whether the plaintiff had thoracic outlet syndrome as a result of the car accident was not overly complex nor did it warrant two counsel.
[16] Some consideration is to be given to the amount of costs that a losing party would reasonably expect to pay in costs. Defendant’s counsel submitted that his solicitor-client fees for the entire litigation were approximately $70,000.00. However, without a Bill of Costs, the court has no real ability to assess this as there was no indication as to the hours spent and the applicable hourly rate.
[17] After considering the written submissions made and the relevant principles of Rule 57.01 and as set out in Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634 (Ont. C.A.) “the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”, I find that the appropriate amount of fees for a trial of this complexity and of this duration to be $100,000.00 plus HST of $13,000.00.
[18] The plaintiff is also entitled to costs on the threshold motion. The amount claimed was in excess of $20,000.00 including HST. That is excessive in the circumstances, and again without a Bill of Costs, I would award an additional amount of costs of $10,000.00 inclusive of HST.
[19] With regard to the disbursements, I accept the position of the defendant’s counsel that to the extent that the reports of Dr. Berbrayer and Ms. Phillips were not referenced or used at trial, the costs associated with obtaining their reports (Dr. Berbrayer ($5,187.50) and Ms. Phillips ($708.50)) cannot be recovered against the defendant.
[20] Finally, and with regard to the report and involvement of Dr. Katz, while the plaintiff was not successful in obtaining an award for past and future income loss, both in his report and in his evidence given at trial, he dealt with the value of past and future housekeeping expenses, for which an award was made. As such, I find it appropriate that one-half of the costs associated with Dr. Katz should be awarded in the amount of $2,962.50.
[21] For those reasons, the allowable disbursements would be $34,292.57.
[22] An Order shall be made that the defendant shall pay costs in the amount of $157,292.57 inclusive of HST and disbursements.
MacPherson J.
Released: July 12, 2013
COURT FILE NO.: 51358/09
DATE: 2013/07/12
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KRISTEN HANSEN, RANDY
CHEYNOWSKI and CALLUM
CHEYNOWSKI, a minor by his litigation
Guardian KRISTEN HANSEN
Plaintiffs
- and -
ROBERT D. WILLIAMS
Defendant
COSTS ENDORSEMENT
W.L. MacPherson J.
Released: July 12, 2013