SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: 185/09
DATE: 2013/07/16

RE: Wendy Berg and Jacqueline McDonald (Plaintiffs)

• and -

Loblaw Properties Limited and Loblaw Companies Limited (Defendants)

BEFORE: Justice H. A. Rady

COUNSEL:
Douglas M. Bryce, for the plaintiffs

Daniel Fife, for the defendants

HEARD: Costs Submissions received in writing May 8 and May 24, 2013

COSTS ENDORSEMENT

[1] The defendant seeks its costs following its successful defence of the plaintiffs’ personal injury action. The matter proceeded over the course of four weeks in Woodstock. The jury found the defendants not liable for the plaintiff, Wendy Berg’s orthopaedic injuries arising from a misstep and fall at the Zehrs store in Woodstock. They assessed damages, provisionally at $158,956.00 exclusive of interest.

[2] There were three relevant offers to settle. On February 18, 2012, the plaintiffs offered to settle for $340,000.00 ($300,000.00 to Mrs. Berg, and $40,000.00 to Ms. McDonald) inclusive of prejudgment interest and OHIP’s subrogated claim. The offer was severable between the plaintiffs.

[3] On March 7, 2011, the defendants offered $100,000.00 inclusive of prejudgment interest to settle the action ($92,500.00 for Mrs. Berg and $7,500.00 to Ms. McDonald or as agreed by the plaintiffs). The offer was not severable.

[4] On March 10, 2011, the plaintiffs offered to settle for $225,000.00 inclusive of OHIP and prejudgment interest on a severable basis ($200,000.00 to Mrs. Berg and $25,000.00 to Ms. McDonald).

[5] The trial had been called on two prior occasions, once resulting in a mistrial and the other an adjournment because of insufficient court time.

[6] The defendants submitted a costs outline showing costs on a partial indemnity basis of $140,351.65 (including disbursements of $25,585.35). In their brief, they seek $100,000.00 all inclusive to account for any issues that might be raised respecting time spent or disbursements incurred.

[7] The plaintiffs’ submissions can be summarized as follows:

• the plaintiffs’ impecuniosity is a relevant consideration;

• the costs of preparation for the two aborted trials should not be included;

• defence counsel’s hourly rates do not represent partial indemnity rates;

• the disbursements are unreasonable because they include investigations and reports not tendered at trial;

• the Family Law Act claimant should not bear the costs or if she does, it should be for the proportionate time spent to address her claim.

[8] I will deal with the foregoing submissions in reverse order. First, however, I remind myself of the criteria to be considered in assessing costs set out in Rule 57.01. Second, I accept that impecuniosity is not a basis to refuse an award of costs but it is a factor that can be considered in the exercise of judicial discretion. Third, an award against a Family Law Act has serious implications, although it is a permissible order available to the court.

The Family Law Act Claim

[9] Ms. McDonald asserted a claim for damages pursuant to the Family Law Act arising from the care she provided to her mother following her surgeries. Ms. Berg is fortunate, indeed, to have such a caring and devoted daughter (and son-in-law).

[10] In regard to this claim, it was clearly a modest one. Ms. McDonald was not examined for discovery and little trial time was devoted to her claim. She would have been a witness regardless because she was able to shed light on her mother’s condition and personality pre and post morbidly.

[11] I agree with and echo my colleague Perell J.’s observations in Boyuk v. Loblaw Supermarkets Ltd. (2007), 2007 5522 (ON SC), 85 O.R. (3d) 614 (S.C.J.). Ms. McDonald’s claim was derivative and entirely dependent on the success of her mother’s claim. To routinely order costs against a derivative claimant would undoubtedly discourage such claims that are statutorily available.

The Disbursements

[12] The plaintiffs submit that disbursements incurred for defence experts not called at trial (Dr. Cameron and Mr. Johnson,[^1]) should not be allowed because they have not been shown to be necessary to the defence. Similarly, the surveillance was not reasonably necessary and should not be included in an award.

[13] I disagree. As a matter of common sense, the defence was obliged to respond to the plaintiffs’ experts. Only one defence medical appears to have been conducted, which seems a reasonable and measured response. There can be no question that Mr. Johnson’s engineering expertise was required to respond to the plaintiffs’ expert. As it happened, the plaintiffs’ expert relied on an inapplicable version of the Building Code. It can hardly be said that Mr. Johnson’s assistance was unnecessary in order to properly prepare for trial. Counsel in his discretion must have considered it unnecessary to call these witnesses, following the testimony of the plaintiffs’ experts in-chief and cross-examination. That is a judgment call that should not disentitle a party to related costs. Indeed, to do otherwise would encourage counsel to call witnesses they consider unnecessary, thereby prolonging trials and unnecessarily consuming scarce trial time. It would also serve to drive up costs because the expert would be paid for time spent in court and the related expenses, such as travel and accommodation.

Hourly Rate of Defence Counsel.

[14] The plaintiffs’ submission is that partial indemnity rates should be calculated at 65% of the actual rate (rather than the 75% claimed). I do not disagree but the defendants’ reduction of the costs claim to $100,000.00 all inclusive makes short work of that submission.

The Costs of the Aborted Trials

[15] I agree with Mr. Bryce that the costs of the two adjourned trials should not be visited on the plaintiff. She was not responsible for either the mistrial or the adjournment. The first was due to a late breaking juror problem and the second related to inadequate court scheduling. Further, while I appreciate that some duplication of effort is inevitable, in my view, the request for 340.8 hours of trial preparation is excessive. Counsel did not give any breakdown of costs attributable to the mistrial, the adjournment and the trial proper but it is reasonable to conclude that some or all of that time must be included. Otherwise, the claim amounts to almost 23 hours of preparation for each of the 15 days of trial. The costs claim must be adjusted accordingly.

Impecuniosity

[16] I turn to the final and perhaps the most difficult aspect of the decision and that is the submission that Mrs. Berg’s impecuniosity justifies a reduction in the costs that would otherwise be payable.

[17] Hardship or impecuniosity is not one of the criteria listed in Rule 57.01, likely in order to avoid a situation where litigants without means can ignore the consequences of their litigation decisions with impunity. See Myers v. Toronto (Metropolitan) Police Force (1995), 1995 11086 (ON SCDC), 125 D.L.R. (4th) 184 (Ont. Div. Ct.).

[18] The comments of Wilson J. in Mark v. Bhangari, 2010 ONSC 4638 (S.C.J.). are noteworthy. She observed as follows:

I agree with the position of the defence that impecuniosity is no answer to an argument on costs. Certainly, a party’s financial situation is a factor that a court may consider when deciding the issue of costs but it is not determinative. I agree with the comments of Justice Mesbur in Amaral v. Canadian Musical Reproduction Rights Agency Limited, [2007] O.J. No. 3512 (S.C.J.) where she noted, ‘Not only do plaintiffs have a choice as to whether to start litigation, they also have choices as to when to begin it, how to conduct it and whether to settle it. All of these factors bear on the issue of costs....’

Parties cannot expect to be immune from an order of costs based on their limited financial resources. If this were the case, parties would be free to conduct litigation as they wished without fear of reprisal in the form of adverse costs orders and this would be contrary to the philosophy of the Rules as well as to their requirements. [The plaintiff] chose to “roll the dice” on the summary judgment motion and he lost. He must now bear the cost consequences of his decision.

[19] I am mindful that Mrs. Berg was represented by experienced counsel who undoubtedly reviewed with her the risks of litigation and her exposure to the defendants’ costs if unsuccessful. It must be remembered, however, that Mrs. Berg had a positive expert’s report on liability, which ultimately did not find favour with the jury but would have factored into her decision to proceed with the case.

[20] There is authority for the proposition that the plaintiff’s means are a relevant consideration in the exercise of the court’s discretion, not to eliminate costs but to reduce them to avoid hardship: Baldwin v. Daubney (2006), 2006 33317 (ON SC), 21 B.L.R. (4th) 232 (Ont. S.C.J.); Ochoa v. Canadian Mountain Holidays Inc. (1997), 10 C.P.C. (4th) 102 (B.C.S.C.); and Capostinsky (Guardian ad litem of) v. Aurora Cycle Supply Ltd. (1994), 1994 8696 (BC CA), 31 C.P.C. (3d) 144 (B.C.C.A.).

[21] In the Ochoa decision, the court was prepared to reduce an order for costs by 50% for reasons of “sympathy and hardship as well as the relative economic strength of the parties”.

[22] In this case, Mrs. Berg is in her early 60s. She sustained a very severe orthopaedic injury, the recovery from which was complicated. She is unable to work because of the injury as well as other health challenges, including a severe tremor. As I recall the evidence, Mrs. Berg and her husband sold their large home outside Woodstock and purchased a smaller one near Paris, more suited to accommodate her mobility issues. I believe her husband testified that they still have a mortgage. I accept Mr. Bryce’s submission that his client is in financial difficulty and a costs order would be a severe hardship to her and as a result, the costs order should be tempered.

[23] Having considered all of the foregoing and the factors set out in Rule 57.01, I would award the defendants costs of $40,000.00.

“Justice H. A. Rady”

Justice H.A. Rady

Date: July 16, 2013

[^1]: The plaintiffs identify the engineer as Mr. Fedy.