SUPERIOR COURT OF JUSTICE – ONTARIO
Mutual Automobile Insurance Co. of Canada, 2013 ONSC 5318
COURT FILE NO.: 00-1278 (Hamilton)
DATE: 2013/09/03
RE: Scott, Pichelli & Graci Ltd., Trustee in Bankruptcy for Future Health Inc., operating as Trauma Services (Plaintiff) v. State Farm Mutual Automobile Insurance Company of Canada (Defendant)
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Jane Poproski, for the Plaintiff/responding party
David S. Steinberg, for the Defendant/moving party
HEARD: By written submissions dated June 4, 2013 and July 17, 2013
E N D O R S E M E N T – COSTS
[1] State Farm Mutual Automobile Insurance Company of Canada is the defendant in an action brought by Scott, Pichelli & Graci Ltd., Trustee in Bankruptcy for Future Health Inc. By endorsement dated May 23, 2013,[^1] I dismissed State Farm’s motion to dismiss the Plaintiff’s action to the extent that it alleged bad faith and claimed punitive damages. Costs of the motion were left to be determined based on written submissions.
[2] In my reasons for dismissing State Farm’s motion, I expressed the view that the Plaintiff may have a “challenging time” establishing that the in personam claims passed to the Trustee in Bankruptcy. However, I went on to find that State Farm had not met the required onus of demonstrating that it was plain and obvious that the bankruptcy trustee did not have the legal capacity to assert those claims. Although unnecessary to do so, I also went on to consider the Plaintiff’s alternative position that the style of cause and Statement of Claim should be amended nunc pro tunc to add Future Health as a plaintiff in addition to the bankruptcy trustee. I indicated that I would not have made such an order. There was no cross motion before me requesting such relief, and I found that such an order would not be justified on the merits.
[3] In addition to dismissing State Farm’s motion, I also ordered that the style of cause be amended to reflect the fact that the action was brought by Scott, Pichelli & Graci Ltd. in its capacity as Trustee in Bankruptcy for Future Health Inc. In the original style of cause, the indicated plaintiff was Future Health Inc. as continued by its bankruptcy trustee. That style of cause was not appropriate in circumstances where the action was commenced after Future Health Inc.’s bankruptcy.
[4] As the successful party on the motion to dismiss the action, the Plaintiff seeks payment of its costs by State Farm on a partial indemnity basis. The Plaintiff filed a costs outline claiming partial indemnity costs in the amount of $7,994, including disbursements and tax.
[5] State Farm’s position is that no costs should be awarded, or alternatively that costs should only be payable in the cause. In support of this position, State Farm’s counsel argued that it was reasonable for State Farm to bring a motion to resolve an important threshold issue, that is: who is the proper plaintiff? He also referred to the comment in my reasons that the Plaintiff may have a challenging time establishing its case. As well, he argued that State Farm should not bear the costs resulting from the substantial amount of time spent addressing the Plaintiff’s alternative position requesting nunc pro tunc amendments in the absence of a cross motion and given my finding that this position had no merit in any event.
[6] Having considered the arguments of counsel, I have concluded that there should be a partial indemnity cost award in favour of the Plaintiff, payable within 30 days. However, I would not award the full amount claimed by the Plaintiff.
[7] The successful party on a motion has a reasonable expectation of being awarded costs in the absence of special circumstances.[^2] In the usual case, costs of a contested motion are fixed and ordered payable within 30 days.[^3] Had State Farm succeeded in its motion, the result would have been the dismissal of a substantial aspect of the Plaintiff’s action. Given the passage of time, the Limitations Act[^4] would have precluded a new action to assert those claims. Clearly, the Plaintiff enjoyed substantial success in its opposition to that motion.
[8] In my view, the factors cited by State Farm do not justify a variation from the expected result of awarding partial indemnity costs to the successful party. While I agree that it was reasonable for State Farm to bring this motion, that factor alone is not sufficient in this case to justify an award of no costs or costs in the cause. In addition, while I expressed my view as to the Plaintiff’s future challenges in pursuing the action, the determining factor on the motion was whether State Farm met the required onus to succeed in obtaining a dismissal of the action. My finding was that it did not. As well, while I agree with State Farm that it should not bear the costs relating to the Plaintiff’s phantom cross motion, this issue would be more appropriately addressed by reducing the amount of the costs awarded to the Plaintiff, rather than ordering that no costs be payable or that they be payable in the cause.
[9] In light of the foregoing, and taking into account what State Farm could reasonably expect to pay in relation to the motion, I fix the Plaintiff’s costs of the motion at $4,000, inclusive of disbursements and tax, payable by State Farm within 30 days.
The Honourable Mr. Justice R.A. Lococo
DATE: September 3, 2013
(Trustee of) v. State Farm Mutual Automobile
Insurance Co. of Canada, 2013 ONSC 5318
COURT FILE NO.: 00-1278 (Hamilton)
DATE: 2013/09/03
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Scott, Picheilli & Graci Ltd., Trustee in Bankruptcy for Future Health Inc., operating as Trauma Services (Plaintiff) v. State Farm Mutual Automobile Insurance Company of Canada (Defendant)
BEFORE: The Honourable Mr. Justice R.A. Lococo
COUNSEL: Jane Poproski, for the Plaintiff
David S. Steinberg, for the Defendant
ENDORSEMENT
Lococo J.
DATE: September 3, 2013
[^1]: Future Health Inc. (c.o.b. Trauma Services) (Trustee of) v. State Farm Mutual Automobile Insurance Co. of Canada, 2013 ONSC 2941.
[^2]: See Bell Canada .v Olympia & York Developments Ltd., 1994 239 (ON CA), [1994] O.J. No. 343, 17 O.R. (3d) 135 (C.A.) at para. 21.
[^3]: See paragraph 57.03(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[^4]: S.O. 2002, c. 24, Sch. B.