COURT FILE NO.: 43208
DATE: 2013/08/19
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN: LANNY STILWELL and MOIRA NEALE
Plaintiffs
- and –
WORLD KITCHEN, INC., NEWELL RUBBERMAID INC., ARC INTERNATIONAL NORTH AMERICA INC. and CORNING INCORPORATED
Defendants
BEFORE: JUSTICE I. F. LEACH
COUNSEL: Michael D. Smitiuch and Peter Cho, for the Plaintiffs
R. Brian Foster, Q.C., for the Defendant World Kitchen, Inc.
Young Park and Kathryn McCulluch, for the Defendant Corning Incorporated
HEARD: By way of written cost submissions
ENDORSEMENT – COSTS
Background
This was a product liability case, arising from injuries sustained by the plaintiff Lanny Stilwell on September 11, 2000.
Mr Stilwell and his spouse, (formally named in the proceedings as the co-plaintiff Moira Neale, but now Mrs Stilwell), alleged that Mr Stilwell was injured while he was alone in the couple’s home, washing what the plaintiffs said was a “Visions Dutch Oven” in the kitchen sink. The item was alleged to have failed, breaking into four large pieces, and severely lacerating Mr Stilwell’s wrist.
The plaintiffs’ resulting claims against the defendants World Kitchen, Inc. and Corning Incorporated, for negligence and breach of warranty, proceeded to trial before a jury; a hearing that began on May 7, 2013, and ended with a jury verdict rendered on June 12, 2013, following approximately 22 days of trial.
The trial was the culmination of more than ten years of litigation, the full details of which I will not attempt to chronicle or outline in detail here.
Suffice it to say that, throughout its extended duration, this was extremely hard fought (although professionally conducted) litigation. The plaintiffs and their counsel tenaciously pursued all arguments and possible avenues of recovery available to them, while the defendants and their counsel demonstrated a corresponding resolve to meet the claims with every legitimate defence and argument available to them.
There seem to have been few concessions on either side, such that, when the matter proceeded to trial, very few of the many wide-ranging issues raised by the litigation had been resolved.
Liability questions extended not only to the numerous alternate theories of legal liability put forward by the plaintiffs, (negligent design, negligent manufacture, failure to adequately warn, and breach of warranty), but also to more fundamental questions as to whether the product in question had in fact even been a Visions Dutch Oven, and whether the incident had occurred in the manner alleged by the plaintiffs. There was also ongoing disagreement relating to the defendants’ reliance on alleged passage of an applicable limitation period. (In that regard, the parties’ dispute extended not only to questions of whether the limitation period had operated to bar the plaintiffs’ claim, but to further questions about whether the defendants were precluded from advancing such arguments at trial, having regard to earlier rulings made in relation to preliminary motions.)
The defendants also questioned and challenged, in a vigorous way, each and every head of damages claimed by the plaintiffs. This extended not only to the plaintiffs inherently controversial claims for aggravated, punitive and exemplary damages, but also to multiple aspects of the plaintiffs’ claims for non-pecuniary general damages, past and future income loss, future care costs, and Mrs Stillwell’s claim for damages pursuant to section 61 of the Family Law Act, R.S.O. 1990, c.F-3.
Both sides called expert witnesses, (11 in total), who provided substantial opinion evidence relating to the various liability and damage issues.
In addition to all of these disputes relating to liability and damages, the parties remained fundamentally at odds over numerous and varied evidentiary issues that apparently were not the subject of any attempted resolution, either negotiated or formal, prior to commencement of trial. These included important and somewhat complex questions concerning such matters as possible application of the spoliation doctrine, the admissibility of all or part of extensive but controversial documentary evidence, (e.g., relating to reports of other alleged instances of product failure), the admissibility of all or part of anticipated oral testimony from alleged “similar fact” witnesses, and the contemplated use of demonstrative evidence.
The parties brought their respective tenacity and considerable advocacy skills to bear on these issues as well, all of which combined to make this a hard fought trial from beginning to end. Indeed, the disputes and challenges continued right up to the end, with the parties’ inability to agree on the questions to be put to the jury, and challenges made to the closing arguments of counsel.
At the close of evidence, the jury had heard from no less than 26 witnesses, (19 of them called by the plaintiffs).
Outcome at trial
In the result, the jury delivered a verdict finding that the product in question was indeed a Visions Dutch Oven, and the defendants liable in negligence for “failure to adequately warn”, (in respect of which the jury provided particulars). The jury’s answers make it clear that the plaintiffs’ additional suggestions of negligent design, negligent manufacture and breach of warranty were rejected.
However, the jury also found Mr Stilwell contributorily negligent, (for reasons also particularized by the jury, but which centred on the product being subjected to a probable impact for which Mr Stilwell was responsible).
The jury assessed and apportioned the respective degrees of fault of the parties by finding the defendants 75% responsible and Mr Stilwell 25% responsible for what had happened.
In relation to quantification of damages, the jury assigned a “zero value” to certain heads of damages that had been claimed, (e.g., in relation to some aspects of Mrs Stilwell’s claim, and the plaintiffs’ claim for punitive and exemplary damages), and far less than what the plaintiffs were claiming in relation to other heads of damages, (particularly insofar as income loss and future care costs were concerned). Even with those deductions and discounts from the amounts claimed by the plaintiffs, the total damages accepted as proven and quantified by the jury still came to $1,157,850.00; a sum that obviously would be further discounted, before any formal award of damages to the plaintiffs, by the contributory negligence factor noted above.
Cost submissions
At the conclusion of trial, following dismissal of the jury, I made directions permitting the parties to address cost issues by way of written submissions, and those now have been received.
In particular, I now have received and reviewed the following:
i. Written cost submissions of the plaintiffs, dated July 2, 2013, which attach a detailed bill of costs, a number of settlement offers exchanged between the parties, and copies of legislation and authorities relied upon by the plaintiffs.
ii. Responding written cost submissions of the defendants, dated July 23, 2013, which attach not only copies of legislation and authorities relied upon by the defendants, but also various other materials, (emails, orders and endorsements), supporting the defendants submission, addressed in further detail below, that various costs now being claimed by the plaintiffs already have been addressed and effectively determined by interlocutory proceedings in the litigation. The defendants also have included a detailed outline of the calculations and deductions that should follow if the court accepts their submission concerning the permissible hourly rates that should underlie the required cost award determination.
iii. Reply written cost submissions of the plaintiffs, dated August 1, 2013, which attach further authorities responding to points advanced by the defendants.
The defendants effectively take no issue with many important aspects of the costs sought by the plaintiff. For example, they do not dispute the plaintiffs’ entitlement to costs, or the sizeable amount of disbursements claimed. Nor do they question the amount of time devoted by plaintiff counsel to any aspect of the matter.
However, the defendants do make a number of principled objections to certain other aspects and components of the plaintiffs’ suggested cost recovery. Those objections are addressed successively, in the comments that follow.
Scale of indemnity
The defendants take issue with the plaintiffs’ suggestion that costs should be awarded on a substantial indemnity basis.
Relying on authority such as Davies v. Clarington (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.), at paragraph 28, they say that a cost award on that elevated scale would be justified only if the plaintiffs achieved a result surpassing a valid Rule 49.10 offer extended by the plaintiffs, and/or if the circumstances demonstrate that the defendants “engaged in behaviour worthy of sanction”, and that neither consideration applies here.
I agree.
Although the plaintiff made reference to the settlement offers exchanged before trial, the simple truth of the matter is that neither operates, in the circumstances, to trigger the additional cost consequences addressed by Rule 49.10. The outcome at trial fell short of the plaintiffs’ offer to settle, and surpassed that of the defendants’ offer to settle.
In the result, neither offer suggests that either side acted unreasonably, at least in the sense of putting all concerned to the needless expense of a trial that might have been avoided by acceptance of an offer shown to have been reasonable, after the fact.
Nor do I think it sufficient or appropriate to suggest, as the plaintiffs effectively do, that substantial indemnity costs are appropriate merely because the result achieved at trial greatly exceeded the amount of the defendants’ Rule 49.10 settlement offer.
The Rule itself shows why such offers may be made and set at certain amounts for largely tactical reasons, (to increase the risks and pressures on an adverse party in order to induce settlement), without necessarily revealing a party’s true assessment of what the claim may well recover if the matter proceeds to trial.
Moreover, while there should be and usually are cost consequences for failure to accept an offer that could have made a trial unnecessary, (had the offer been accepted by the unsuccessful party), there is no similar and corresponding rationale for imposing enhanced responsibility for costs on a party simply for making an offer that falls short of the eventual outcome at trial, (even by a large amount).
To the contrary, if the eventual outcome at trial lies between what a plaintiff was willing to accept and what a defendant was willing to pay before trial, (as suggested by their respective offers), the pre-trial expectations and demands of both parties effectively necessitated a trial.
In my view, the settlement offers therefore have little or no relevance to the cost determination before me, at least insofar as a determination of the appropriate scale of costs is concerned.
If there is any justification for awarding costs to the plaintiff on an elevated scale, it therefore would have to focus on some kind of conduct by the defendants that merits condemnation.
In that regard, although the court has a broad discretion in relation to costs, confirmed by s.131 of the Courts of Justice Act, R.S.O. 1990, c.C.43, as expanded by Rule 57.01 of the Rules of Civil Procedure, our appellate courts repeatedly have emphasized that awards of costs on a partial indemnity basis generally strike the proper balance as to the burden of costs that should be borne by the “winner”, and that elevated cost awards should be reserved for “rare and most exceptional” cases. See, for example, Foulis v. Robinson (1987), 1978 1307 (ON CA), 21 O.R. (2d) 769 (C.A.), and Isaacs v. MHG International Ltd., (1984), 1984 1862 (ON CA), 45 O.R. (2d) 693 (C.A.)
The sort of conduct meriting elevated cost awards has been described in various ways.
In Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p.134, McLachlin J. indicated that elevated cost awards are warranted “only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties”.
In Mortimer v. Cameron (1994), 1994 10998 (ON CA), 17 O.R. (3d) 1 (C.A.), and McBride Metal Fabricating Corp. v. H&W Sales Co. (2002), 2002 41899 (ON CA), 59 O.R. (3d) 97, whose principles were echoed and emphasized again by the Court of Appeal in Davies v. Clarington, supra, conduct warranting elevated cost awards was described as “reprehensible”, “egregious”, or “acts that clearly indicated an abuse of process”, justifying enhanced costs as a form of chastisement.
In this case, I saw nothing in the history of the matter, or in the proceedings that transpired before me, suggest any conduct of the defendants, in the sense required, to warrant an award of costs on a substantial indemnity basis.
In their written cost submissions, the plaintiffs do not identify any specific behavior of the defendants said to justify an award of costs on an elevated scale, apart from indirect references to the vigorous opposition mounted by the defendants in disputing and contesting the plaintiffs’ claims before and at trial.
However, the authorities make it clear that something more egregious than a tenacious but unsuccessful defence is required to constitute misbehavior warranting imposition of an elevated cost award. In particular, our Court of Appeal repeatedly has emphasized that, “under our system, defendants are entitled to put the plaintiff to the proof, and there is no obligation to settle an action”. See Foulis v. Robinson, supra, at p.776, and Davies v. Clarington, supra, at paragraph 44.
To the extent the plaintiffs are entitled to costs, they accordingly should be awarded only on a partial indemnity basis.
Hourly rates
The defendants submit that the hourly rates employed in the plaintiffs’ Bill of Costs are inappropriate and excessive, and that the rates should be reduced in the manner suggested by the detailed alternative calculation put forward by the defendants.
The particular suggestion is that:
a) the hourly rate for Mr Smitiuch (called to the bar in 1998) be reduced from $300 to $225;
b) the hourly rate for Mr Cho (called to the bar in 2011) be reduced from $225 to $150; and
c) the hourly rate for Mr Hamer (called to the bar in 2012) be reduced from $225 to $125.
In that regard, the defendants’ submission expressly relied on the “former cost grid”, and case law released shortly after the Cost Grid’s formal repeal in 2005; i.e., Monks v. ING Insurance Co. of Canada (2005), 2005 31991 (ON SC), 80 O.R. (3d) 609 (S.C.J.), wherein Justice Lalonde expressly indicated his entitlement to “inspire [him]self to fix hourly rates on the former costs grid”.
Such an approach may have made sense in relation to cost determinations made in the immediate wake of the grid being repealed, when its suggested approach remained somewhat contemporaneous with matters before the court requiring cost determinations.
However, that rationale inherently fades with the passage of time. Indeed, the necessarily “static” nature of the repealed grid means that it cannot and likely will not keep pace with the ongoing and changing dynamic of fees actually charged to clients. This in turn means that continued adherence to the cost grid per se is likely to undermine, over time, the “principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged”, now expressly emphasized by Rule 57.01(1)(0.a).
Such considerations, and a general rejection of approaching cost determinations as a “mechanical exercise”, (as opposed to making a global assessment of what costs are fair and reasonable in the particular circumstances, on a “case by case” basis), favour rejection of any suggestion that costs should still be assessed, and underlying rates determined, in accordance with “some notional grid”. See Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634 (C.A.), and Forbes & Manhattan v. URSA Major Minerals, 2011 ONSC 3911 (S.C.J.), at paragraph 29.
This is not to say that the courts may not still be guided to some extent, in appropriate cases, by the “Costs Bulletin”, (formerly entitled “Information for the Profession”), issued by the Costs Subcommittee of the Rules Committee when the Costs Grid itself was being repealed in 2005. Although the bulletin has advisory status only, and may not have been updated since 2005, (despite its stated intention that the guidelines would be “reviewed periodically so that their currency can be maintained”), parties and courts still refer to the bulletin for guidance in determining appropriate hourly rates to be used for cost award determinations. See, for example, Wright v. Wal-Mart Canada Corp, 2010 ONSC 2936, [2010] O.J. No. 2206 (S.C.J.), at paragraphs 127-128, and Livent Inc. v. Deloitte & Touche, 2011 ONSC 648 (Master), at paragraphs 111-112.
For present purposes, I note that the Costs Bulletin suggests the following:
a) a maximum hourly rate of $300.00 per hour for lawyers having more than 10 but less than 20 years of experience; and
b) a maximum hourly rate of $225.00 per hour for lawyers with less than 10 years of experience.
In formulating their request for costs in the case before me, the plaintiffs therefore effectively have used the maximum hourly rates suggested by the Cost Bulletin for Messieurs Smitiuch, Cho and Hamer, having regard to their respective years of experience.
I nevertheless also note that, even when the formal and binding “Costs Grid” was in place, there was marked reluctance by the judiciary to limit use of the maximum indicated hourly rates to counsel with the most accumulated years of experience, (applying progressively lower rates to counsel of more limited experience), without any regard to the nature or demands of the particular matter in respect of which costs were being determined.
See, for example, the following comments of Justices Feldman and Simmons in Celanese Canada Inc. v. Canadian National Railway Co., 2005 31991 (ON SC), [2005] O.J. No. 3749 (C.A.), at paragraph 61:
Although there is case law from the Superior Court that suggests that the maximum rate in the costs grid is reserved for the most experienced counsel and the most important cases, we do not agree that only a small, elite group of lawyers in the province arguing the most financially significant cases is entitled to that rate. Instead, the trial judge is to assess the seniority of counsel and the significance of the case in monetary, jurisprudential and procedural terms, and to decide on a case-by-case basis the appropriate rate for senior and junior counsel on the applicable scale. [Emphasis added.]
If such an approach was not only permissible but mandated under the former binding “Costs Grid”, its rationale and wisdom would seem to apply a fortiori to voluntary application of the approach to hourly rates suggested by the advisory “Costs Bulletin”.
As noted above, this particular case involved product liability litigation of substantial duration and complexity, involving difficult issues of liability, damages and evidence.
The challenges inherent in the case were heightened by the fact that it proceeded to trial before a jury, (which for claims of this nature appears to be something of a rare occurrence, at least in the Canadian common law jurisdictions).
The stakes were high, as indicated not only by the monetary amounts claimed and recovered, but by other evidence led at trial by the plaintiffs, (emphasizing the desperate financial straits to which they claimed to have been reduced by the underlying incident), and by the defendants, (who emphasized the importance they placed on the quality and reputation of their product).
In my opinion, all counsel did an outstanding job for their respective clients, and to the extent the plaintiffs achieved a generally favourable verdict and significant award of damages, (notwithstanding considerable resistance mounted by the defence), this was in large measure due to the considerable preparation and skill demonstrated by plaintiff counsel that put the plaintiffs’ case before the jury in the best possible light.
In these particular circumstances, the $300 hourly rate suggested for Mr Smitiuch seems entirely appropriate, particularly given his level of experience.
While similar considerations relating to the challenging “monetary, jurisprudential and procedural” significance of the matter apply to Messieurs Cho and Hamer as well, use of the bulletin’s suggested maximum $225 hourly rate for lawyers of one or two years’ experience still seems somewhat excessive to me. Having regard to all the circumstances, I think it appropriate in this case to employ an hourly rate of $190 for the time expended by Mr Cho, (who participated actively in the trial), and an hourly rate of $150 for Mr Hamer, (whose participation was confined to work done “behind the scenes”).
Plaintiff entitlement to a “premium”
Relying on authorities such as International Corona Resources Ltd. v. Lac Minerals Ltd., [1989] O.J. No. 1324 (H.C.J.), and Berendsen v. Ontario, [2008] O.J. No. 2760 (S.C.J.), the plaintiffs suggest that the circumstances also justify awarding a “cost premium” to the plaintiffs, “in recognition of the complexity and importance of the issues which were presented to the court by counsel”.
However, I agree with the defendants that such a premium would not be appropriate here.
As highlighted by the following extract from the Law of Costs, (2nd ed.), by Mark Orkin, at p.3-57, the court unquestionably has jurisdiction to award such a premium in rare cases, but an exceptional and extraordinary methodology and result are required:
If by the exercise of ingenuity and imagination, a solicitor can achieve an outstanding result for the client, he may be entitled to a bonus or premium in excess of the ordinary value of the time expended, but not for merely acting competently or achieving a result, that while satisfactory, is not spectacular. [Emphasis added.]
A case therefore may be “relatively complex”, involve significant monetary values, be important to a seriously injured plaintiff, entail considerable financial risk, and achieve a “good result” as a result of “great skill” demonstrated by plaintiff counsel, yet still fall short of justifying the award of a cost premium. See Brown v. Flaharty, [2005] O.J. No. 260 (S.C.J.).
Similarly, a case generating a “very good but not extraordinary result” for a claimant, in part because of a finding of significant contributory negligence, will not warrant a cost premium. See Murray v. Ontario, [2002] O.J. No. 4268 (S.C.J.).
In this case, I already have commented on the commendable performance by plaintiff counsel, which certainly was very important to the degree of success achieved by the plaintiffs.
However, I note again that three of the four grounds of liability vigorously pursued by the plaintiffs were rejected by the jury, that the jury found Mr Stilwell contributorily negligent and 25% at fault for what happened, and that the jury’s quantification of damages fell far short of the numbers sought by the plaintiffs in significant respects.
On the last point, the defendants highlight, for example, that the plaintiffs sought a future loss of income award in the range of $323,900 to $410,700, but the jury assigned a value of $240,000 to that head of damages. Similarly, the plaintiffs sought $1,018,500 for future care costs, but the jury assigned a value of $270,000 in that regard.
In my view, looking at the matter as a whole, the result achieved by and for the plaintiffs was “very good” in the circumstances, but it was not “spectacular” or “extraordinary”.
Reduction of plaintiff cost award for contributory negligence
The defendants say that costs sought by the plaintiffs also should be subject to an overall reduction of 25% commensurate with the jury’s assessment of Mr Stilwell’s contributory negligence.
In that regard, the defendants rely on the provisions of Rule 57.01(1)(c), which expressly includes “the apportionment of liability” as one of the many factors “the court may consider”, (emphasis added), in exercising its general cost discretion pursuant to s.131 of the Courts of Justice Act, R.S.O. 1990, c.C.43, as amended.
The defendants also point to section 7 of the Negligence Act, R.S.O. 1990, c.N.1, as amended, which reads as follows:
Where the damages are occasioned by the fault or negligence of more than one party, the court has power to direct that the plaintiff shall bear some portion of the costs if the circumstances render this just. [Emphasis added.]
As the highlighted portions of the above legislative provisions make clear, imposing any reduction on a plaintiff’s cost award because of contributory negligence is a matter of court discretion, as is the quantum or percentage of any such reduction.
Certainly, it is by no means a “given” that a plaintiff’s costs will be subject to a percentage deduction commensurate with the degree of his or her contributory negligence.
As an example of such an approach being taken, the defendants point to Gallant v. Fanshawe College of Applied Arts & Technology, [2009] O.R. No. 5339 (S.C.J.), where the trial judge simply agreed with the defence submissions that the costs and disbursements sought by and awarded to the plaintiff should be reduced by 20 percent, in line with the jury’s finding of 20 percent contributory negligence. The court offered no further analysis or reason for the reduction.
However, universality of the suggested approach is belied not only be the underlying legislative provisions noted above, but also by the court’s decision in Wright v. Wal-Mart Canada, supra, where the court expressly declined to reduce the plaintiff’s costs and disbursements because of her contributory negligence, even though the jury had found her 5 percent at fault for the underlying accident.
In that regard, the court in the Wright case used a more nuanced analysis to determine whether or not there actually was any “purpose or rationale” for making the proposed reduction, such that its imposition would be “just” in the particular circumstances of that case. In particular, the court asked and considered such matters as:
a) Whether the plaintiff’s own contribution to the accident and resulting injuries was minimal, or substantially contributed to the need for litigation;
b) Whether addressing the plaintiff’s contributory negligence substantially affected the amount of costs incurred, (e.g., by raising “discrete” issues akin to a plaintiff’s failure to wear a seat belt or properly maintain his or her vehicle in the context of a motor vehicle accident), necessitating additional lay and expert witness testimony that might otherwise not have been required; and
c) Whether or not the plaintiff’s contributory negligence materially affected the prospects for settlement of the action as reflected in offers of settlement; i.e., insofar as the quantum of damages associated with contributory negligence effectively created an unbridgeable gap or difference between the parties’ respective positions, thereby necessitating a trial that might otherwise have been avoided.
In my view, this more detailed and reasoned approach to possible application of a “contributory negligence reduction” is much more consistent with the discretionary nature of the relevant legislative provisions, as well as the Court of Appeal’s general admonition in Boucher v. Public Accountants Counsel (Ontario), supra, that determination of a fair and reasonable cost award in any particular case should not be a simple “mechanical exercise”.
In this particular case:
a) The jury found Mr Stilwell 25% at fault for what happened, and his “own contribution to the accident and resulting injuries” accordingly was not “minimal”. However, the jury also found the defendants 75% to blame for the accident, despite their vigorous and unyielding denial of any responsibility whatsoever for what happened, such that the “need for litigation” was inevitable regardless of Mr Stilwell’s contributory negligence.
b) In the circumstances of this case, it is not easy to isolate discrete matters associated with Mr Stilwell’s contributory negligence, (akin to seatbelt issues in motor vehicle accident litigation), that necessitated evidence or argument that probably would not have been presented and addressed in any event. From the outset of the litigation, the plaintiffs essentially contended that the product in question reacted in a completely unexpected, extreme and dangerous way to the application of minimal forces; i.e., by the manner in which Mr Stilwell was simply holding and rinsing the product, between setting it down gently on surfaces. The defendants consistently denied such a possibility, and maintained that the incident therefore must have been caused in a manner substantially different from that described by the plaintiffs; i.e., through the application of significant force caused by an impact, (there being no suggestion or possibility of thermal stress at the relevant time). The forces applied to the product and the manner of their application accordingly were in dispute from the outset, in relation to both negligence and contributory negligence, and in my opinion the corresponding evidence was inextricably bound together, in the sense that it almost certainly would have been led in any event.
c) Prior to the commencement of trial, the plaintiffs had offered to settle the matter in exchange for the defendants’ payment of $1,128,513.00, for damages and interest, plus costs and disbursements. For their part, the defendants had offered to settle the dispute in return for an all-inclusive payment to the plaintiffs of $100,000.00; (i.e., inclusive of any and all applicable damages, interest, costs and taxes). Thus, even if the plaintiffs had conceded the existence of contributory negligence by 25% and discounted their claims accordingly, the gap between the parties’ respective pre-trial settlement positions was still so vast that a trial would have been required in any event to resolve the dispute. To use the wording employed in the Wright case: “the amount of [Mr Stilwell’s] damages that was attributable to [his] own negligence, in the percentage found by the Jury, did not approach the difference between the amounts that each side offered to the other. [His] negligence therefore did not materially affect the prospects for settlement of the action or contribute in a general way to the costs that the parties subsequently incurred.”
- Having regard to all these considerations, and the ultimate goal of arriving at a cost determination consistent with the “overriding principle of reasonableness” for such an action, I am not persuaded, on balance, that the “circumstances render [it] just” to apply a global reduction for contributory negligence.
Further deductions and adjustments related to pre-trial motions
The defendants submit that costs awarded to the plaintiff at this stage of the proceedings should not include those associated with earlier motions in respect of which there was either an order as to costs, or an agreement between the parties as to costs. Details of the relevant motions, the corresponding cost endorsements and agreements, and the associated costs now being claimed by the plaintiffs, (totaling $22,955.00), are set forth at paragraph 12 of the defendants’ written cost submissions.
On this point, I agree with the defendants.
Where motions have resulted in an order awarding and quantifying associated costs, or indicating that no costs would be awarded, no further costs for steps taken in relation to such motions may be awarded or assessed. A trial judge has no jurisdiction to award costs for a prior contested event for which costs were decided. See: Orkin, The Law of Costs, (2nd ed.), at paragraph 402; Kordic v. Bernachi (2007), 161 A.C.W.S. (3d) 692 (Ont.S.C.J.), at paragraph 5; and Hollinger Inc. v. Ravelston Corp. (2008), 54 C.P.C. (6th) 211 (Ont.C.A.).
Alternatively, even if the plaintiffs were correct in their conflicting assertion that at least some of these motion costs actually were not addressed when the motions were substantively addressed and decided, (and the plaintiffs say in their reply that this was the case in relation to the motion to add parties), I disagree with the plaintiffs’ suggestion that such costs may be addressed and made payable at this stage of the proceedings, “given that the motions were necessary steps in order to prosecute this action”.
To the contrary, where motions have resulted in an order making no express provision for costs or relating to costs, the law is clear that no costs shall be awarded or assessed for steps taken in relation to such motions. See: Orkin, The Law of Costs, (2nd ed.), at paragraph 402; Delrina Corp. v. Triolet Systems Inc. (2002), 2002 45083 (ON CA), 165 O.A.C. 160 (C.A.); and Radvar v. Canada (Attorney General) (2006), 145 A.C.W.S. (3d) 208 (Ont.S.C.J.).
At paragraph 13 of their written cost submissions, the defendants identify a further $10,690 in costs claimed by the plaintiffs in relation to an earlier motion, (the motion for production of documents from World Kitchen, heard and decided by Justice Leitch on April 23, 2013), in respect of which the parties reached an earlier cost agreement. In their reply submissions, the plaintiffs voluntarily indicate their agreement not to pursue costs of that motion in the current context; an indication apparently acknowledging that the plaintiffs’ original cost request should be discounted by that $10,690 amount.
At paragraphs 14 and 15 of their written cost submissions, the defendants suggest that Corning should be awarded $2,500 in costs for succeeding on its cross-motion, brought and heard by Justice Leitch on April 23, 2013, (with a further suggestion in paragraph 20 that this amount should represent a further deduction to be applied against the plaintiffs’ cost award, by way of set-off). However, this ignores the following provisions of Justice Leitch’s endorsement, made following a paragraph expressly referring to both the motion and the cross-motion:
I trust the issue of costs can be resolved but if necessary brief written submissions can be made within 30 days.
Justice Leitch accordingly reserved the question of costs to herself, effectively imposing an obligation on the parties to follow up if and as necessary within the indicated time limit, failing which no cost order would be made.
I gather from the defendants’ submission that no such efforts were made to follow up with Justice Leitch as required. The situation therefore involves either an effective or deemed “no costs” disposition in relation to Corning’s cross-motion.
The defendants’ submission on this point accordingly falls to be decided by the principles and law set about above; i.e., a trial judge has no jurisdiction to revisit the costs of a motion in respect of which a cost disposition was made by the motions judge, or in respect of which no costs were awarded.
Further deductions – costs of preparation for earlier trial
Finally, the defendants argue that the plaintiffs should not recover $33,420 in costs associated with the plaintiffs preparation and pre-trial conference attendance associated with an earlier trial date in 2007; a trial that then had to be postponed because the plaintiffs took steps to add further defendants beyond World Kitchen, (including Corning).
The defendants say they should not be held responsible for costs that were “thrown away due to the plaintiffs’ failure to add all necessary defendants by 2007 and through no fault of the defendants”.
In reply, the plaintiffs submit that extensive preparation for the earlier trial clearly was necessary, and that its adjournment and any associated waste or duplication of preparation time was brought about by late disclosure, from the defendant World Kitchen, indicating why the involvement of additional parties was required.
In effect, the parties continue to argue indirectly, by their competing cost submissions on this point, similar issues raised by the interim and final limitation period motions. In particular, they effectively continue to dispute, (now in the context of costs), whether or not the plaintiffs should be faulted for not discovering and/or realizing, at an earlier date, that additional defendants were required. (As noted in the earlier context of the limitation period motions, the plaintiffs attribute any failings in that regard to the complex manner in which the defendants structured their corporate affairs, and/or the defendants’ failure to provide accurate and complete disclosure as to the nature of that structure in a timely way.)
Consistent with the earlier limitation period rulings made by Justice Bryant and myself, I do not think the plaintiffs can be faulted in the circumstances, and that the earlier trial preparation, reasonable at the time, is trial preparation necessitated by the litigation in respect of which costs may be recovered. I accordingly decline to make the further discount suggested by the defendants in that regard.
Disposition
By tracking and sequentially addressing the various objections raised by the defendants, I do not mean to suggest that the final cost determination necessarily should be the simple product of starting with the amounts sought by the plaintiffs, and adjusting that figure only by the particular adjustments and deductions proposed by the defendants, with which I agreed.
At the end of the day, my cost discretion must still be exercised not according to any “mechanical application” of accepted time entries multiplied by accepted hourly rates, but by having regard to the “overriding principle of reasonableness” for such an action, as applied to the factual matrix of the case.
This is the ultimate “cross check” required by such authorities as Boucher, Moon and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.), and Anderson v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Ont.Div.Ct.).
However, the defendants’ general acceptance of the plaintiffs’ cost requests, subject to resolution of particular objections, obviously is of considerable importance in a determination of what is reasonable in the circumstances.
Having reviewed the parties’ cost submissions in detail, and in light of the various considerations outlined above, I think it appropriate to quantify the costs of the plaintiffs as follows:
a) The defendants shall pay the plaintiffs the costs of their disbursements and applicable tax, fixed in the amount of $157,450.81, (inclusive of tax);
b) The defendants shall pay the plaintiffs their fees, on a partial indemnity basis, fixed in the amount of $387,140.00, together with applicable HST of $50,328.20.
- I am grateful to all counsel, once again, for their detailed and helpful submissions.
“Justice I. F. Leach”
Justice I. F. Leach
DATE: August 19, 2013