Court File and Parties

Court File No.: 06-CV-323766
Date: 2013/02/11
Superior Court of Justice - Ontario

RE: ELEANOR BAINES
Plaintiff

- AND -

NAVDEEP SINGH HEHAR and MANMOHAN S. HEHAR
Defendants

Before: Justice Moore

Counsel:
Eleanor Baines, In Person
Jeff Booth, for the Defendants

Heard: 1 February 2013

Endorsement

[1] Ms. Baines was involved in a motor vehicle accident on 26 January 2000. She brought this action for damages arising from that accident and asserts that her ongoing limitations are permanent serious impairments of important physical, mental or psychological function, within the meaning of those terms as used in the Insurance Act.

[2] Following a jury trial that continued over twelve days, I ruled in favour of the Defendants on their motion for a determination that Ms. Baines’ claims did not meet the tests of severity and permanence, the “threshold” for recovery of certain of her damages. The result of that determination, coupled with the findings of the jury, meant that Ms. Baines could not recover damages from the defendants at all.

[3] This outcome left open the matter of costs. I directed that if the parties could not agree upon costs issues, I could be spoken to. Having now received written and oral submissions on costs, this endorsement will describe my reasons and decision on costs.

[4] To begin with, the parties accept that costs usually follow the event and the successful party is ordinarily entitled to expect an award of costs. This case, however, is no ordinary case. This case presents unique circumstances and competing concerns that require analysis and balancing in order that fairness be achieved for the parties.

[5] In considering costs, the starting point for the process is Section 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43 and the General Principles outlined in Rule 57 of the Rules of Civil Procedure, R.R.O., Reg. 194. The court is empowered to exercise discretion to determine by whom and to what extent costs shall be paid. And, in exercising its discretion, the court may consider the outcome of the proceeding, any offer to settle made in writing and other factors, including:

• The amount of costs that an unsuccessful party could reasonably expect to pay;

• The amount claimed and the amount recovered in the proceeding;

• The apportionment of liability;

• The complexity of the proceeding;

• The importance of the issues; and

• Any other matter relevant to the question of costs.

[6] The list of factors enumerated here is not complete but is reflective of factors that are relevant in this case and that I have carefully considered.

[7] Ms. Baines’ claims arose from a motor vehicle accident which can be described fairly as a low speed, two car collision in a parking lot. The dynamics of the impact were straightforward but the consequences to Ms. Baines’ health and well-being were very complicated.

[8] The jury heard the evidence of the two drivers and apportioned liability between them. 90% of the liability was found to rest with Mr. Hehar and 10% with Ms. Baines. She submits that the defendants should have admitted liability and saved time and expense thereby at trial.

[9] Ms. Baines testified to the movements of her head and body following from the impact and the discomfort she felt immediately and thereafter. She told the jury at length and passionately of her health care assessments and treatments following the accident and the course of her recovery from the many injuries she submitted were the result of the accident.

[10] She described her life before and after the accident in terms of her day-to-day functioning and her vocational, social and home life functioning as the result of her abilities and limitations. She called expert evidence to support her assertions and met expert evidence called for the defence.

[11] The injuries alleged were many and complicated and their after effects were contested, in terms of severity and duration, throughout the trial.

[12] Although she recovered no general damages at trial, the amounts in issue in the case were significant throughout the life of the action. In April of 2010 Ms. Baines offered to settle her claims for damages and interest for $775,000 plus costs. In that same month, the Defendants offered $100,000 inclusive of damages and interest plus costs and also the Defendants offered to waive any right to an assignment of any future collateral benefits that Ms. Baines might be entitled to. Both Plaintiff and Defendants were clearly viewing Ms. Baines’ claims to be, potentially, very substantial indeed.

[13] It cannot be doubted that the issues involved in this case were important to the parties. Quite apart from the money at issue, it was clearly important that the injuries and damages alleged to have been caused or contributed to by the accident be identified and understood, to the extent possible, upon the available, admissible evidence.

[14] For Ms. Baines, this action also presented an access to justice issue. She testified that she had legal representation for eight years during the course of the action but as the time of trial approached, she found herself without legal representation and faced the daunting prospect of preparing for and presenting her case in person at trial. She was not legally trained. I provided her with an outline of the trial process as the trial began and she comported herself very well in following the procedures described and my rulings given throughout the trial. This said, however, she was entirely self-reliant in her trial preparations and presentation.

[15] Ordinarily, the outcome that followed from this trial would see the unsuccessful plaintiff ordered to pay costs of the action to the successful defendants. This would be preceded by a judicial focus upon the reasonable expectations of the costs that Plaintiff should have anticipated that she could be exposed to. In that regard, Ms. Baines submitted receipts and a summary showing that she spent $61,849.32 in disbursements; the Costs Outline filed by the Defendants tabulates disbursements of $44,134.77. Clearly Ms. Baines could reasonably have anticipated that the Defendants’ claims to disbursement items of costs would be substantial.

[16] In her oral submissions, she allowed that, at the commencement of the trial, she anticipated the defendants’ costs would approximate $100,000, inclusive of fee and disbursements claims.

[17] Ms. Baines contests aspects of the Defendants’ fees. She properly points out that the cost of two counsel for the defendants throughout the trial was not warranted, for example. She argued as well that the numerous timekeepers involved duplicated efforts; they were disorganized and perhaps not sufficiently experienced in trial work.

[18] While there may be dockets that, upon close scrutiny, one could question, it must be remembered that in fixing costs the trial judge will not attempt a line by line analysis of the Costs Outline of the successful party. As well, I note that the hourly rates claimed for the timekeepers involved in this matter at the Sigurdson firm, counsel for the Defendants, are very low as compared to those of litigation counsel of similar experience and expertise in Toronto.

[19] In this case, the Defendants seek costs of well over $100,000. If successful in satisfying this court that the amount of that claim is reasonable, the question becomes how much of that amount should the Defendants recover? The answer to that question depends upon a consideration of the competing principles necessarily involved.

[20] In Agius,[2] Ricchetti J. well summarized this court’s concerns in fixing costs:

Fixing costs is not merely a mechanical exercise in reviewing the receiving party’s Costs Outline. In Anderson v, St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557, the Divisional Court set out several principles to be considered in making an award of costs:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher, Moon, 2004 39005 (ON CA), [2004] O.J. No. 4651, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.).

2. A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont.C.A.), at para. 4.

3. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).

4. The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantial results”: Murano v. Bank of Montréal (1998), 1998 5633 (ON CA), 41 O.R. (3d) 222 (C.A.), at p. 249.

5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.

The Court of Appeal has identified the overriding principle to be that the amount of costs awarded be reasonable in the circumstances. In Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 Epstein J.A. stated at paras. 52:

As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigants. In Boucher [Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.)], this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings at para. 37, where Armstrong J.A. Said “[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice.

[21] Perell J. has recently added his helpful analysis to the issue in the Doe case.[3] At paragraphs 10 and 11, he addressed the purpose of awards of costs as follows:

[10] The court's discretion to award costs is designed to further three fundamental purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants in their conduct of the proceedings: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371; Fong v. Chan (1999) 48 O.R. (3d) 330 (C.A.); Fellowes, McNeil v. Kansa General International Insurance Co. 1997 12208 (ON SC), (1997), 37 O.R. (3d) 464.

[11] Costs are designed as to be a tool to administer justice and to control access to justice. In British Columbia (Minister of Forests) v .Okanagan Indian Band, supra, LeBel J. for a majority of the Supreme Court of Canada stated in para. 26:

Indeed, the traditional approach to costs can also be viewed as being animated by the broad concern to ensure that the justice system works fairly and efficiently. Because costs awards transfer some of the winner's litigation expenses to the loser rather than leaving each party's expenses where they fall (as is done in jurisdictions without costs rules), they act as a disincentive to those who might be tempted to harass others with meritless claims. And because they offset to some extent the outlays incurred by the winner, they make the legal system more accessible to litigants who seek to vindicate a legally sound position. These effects of the traditional rules can be connected to the court's concern with overseeing its own process and ensuring that litigation is conducted in an efficient and just manner. In this sense it is a natural evolution in the law to recognize the related policy objectives that are served by the modern approach to costs.

[22] Of course, encouraging settlements and appropriate behavior on the part of litigants in accessing justice in connection with the trial of actions presupposes that the litigants are able to make the informed decisions necessary to act reasonably. In this case, Ms. Baines opted not to accept a substantial offer to settle her case, an offer outstanding right up to the commencement of trial. She made that decision for reasons known only to her but she clearly made it upon an incomplete understanding of the legal consequences that could befall her. And she alleged in this action that she suffered injuries that impaired her ability to focus and to reason normally.

[23] As is clear from my reasons on the threshold motion, Ms. Baines did not lose this case because of a finding that she did not suffer injuries and serious permanent impairments of important bodily functions as the result of the accident, she lost because she failed to marshal and adduce the evidence necessary to make out her case at trial.

[24] She may well have applied compromised cognitive functioning in considering whether to settle her case rather than pursuing her day in court. I cannot decide that question but I note that, by the size and longevity of their offer, the Defendants appear to have contemplated an exposure consistent with ultimate success for the plaintiff.

[25] But a factor often drawing little discussion in costs decisions is the ability of the paying party to bear the financial burden of the award. In my view, the evidence in this trial requires consideration of that concern here.

[26] Lane J. stated his concern about an unsuccessful plaintiff’s ability to pay a costs award in Walsh[4]:

The plaintiff is said to be a single mother with no employment-related skills beyond minimum wage employment and no assets. Costs of a 23-day trial on any scale would be an impossible burden for her to discharge and no doubt enforcement efforts would swiftly lead to her bankruptcy. Costs are always in the discretion of the Court and I am reluctant to make an order which has no utility because it cannot be met, but which may deter others from venturing to sue their employers when they believe they have a genuine grievance. On the other hand, there may be matters unknown to me presently which ought to influence such a decision. Accordingly, I reserve any fixing of the amount of such costs at the present time.

[27] Having received further submissions, including affidavit evidence of impecuniosity of the plaintiff, Lane J re-visited the matter[5] and said:

The plaintiff is unable to pay and will likely remain so as she lacks both skills and the time and money to acquire them so long as she must care for her children on public support. She incurred this potential liability in the pursuit of the restoration of her employment and her reputation after being dismissed. She has been unsuccessful after a proceeding which no one could have imagined would cost what it did. A costs order against her in the amounts sought, or indeed in any lesser, but significant amount, would have no practical utility to the defendants, but would send a message which would deter others, who may have better cases, from pursuing a remedy because of the disastrous impact of costs if they lose the case. The courts exist to hear the complaints of the people. It is not in the public interest to deter the people from using their own courts for fear of the costs consequences if they lose the case.

[28] In the instant case, the evidence of impecuniosity is compelling. Ms. Baines testified and I accept that:

• Ms. Baines was born in Toronto, in 1956; she became a single mother at age 21 and her only child, a daughter, was, at the time of trial, 33 years of age. She had three grandchildren aged one, five and eight. She showed pictures of her family to the members of the jury

• Ms. Baines has lived in a cooperative housing project in the St. Lawrence neighbourhood since 1983. Her housing is subsidized and she pays about 32% of her income on rent.

• Before the accident she aspired to earning higher wages in order that she might pay full rental. She had worked for about 15 years before the accident on temporary assignments for various companies, mainly temp agencies.

• In 1997 and 1998, she determined to return to school. She had spent about seven months working at a high school where she truly enjoyed working with students. At that time she was 42 years of age and was finding a low demand for her work and low pay scale.

• Ms. Baines lives alone. Her mother had lived with her for four years before the accident until she went into a nursing home, in the month before the accident. At that time, Ms. Baines’ daughter was 22 and was still living at home with her.

• Ms. Baines confirmed that she had three other lawsuits outstanding before Ontario courts. One arises from denial of CPP benefits and there was to be a judicial review hearing scheduled for late March of 2011. That Federal Court action involved an appeal from the Commissioner of Review Tribunals [Ms. Julie Gagnon] who, in turn, sat on appeal of the original application for CPP benefits made to the Ministry. The issue for the Federal Court of Appeal was the denial of retroactive payments of benefits. Ms. Baines pointed out that to the extent that she has been or will be successful in her claims made against CPP, money received will have to go and has gone to ODSP.

• She collects CPP and ODSP benefits but has no other sources of income. Ms. Baines received about $750 per month from CPP and a further $270 per month from ODSP; with student credits applied on her income tax returns she did not end up owing or paying income tax.

[29] I see no utility to awarding costs against Ms. Baines in the amounts sought by the Defendants or in any amount. She simply does not possess the financial wherewithal to pay an award of costs and is most unlikely ever to acquire the ability to meet a costs burden arising from this case.

[30] Even if her reasoning on considering the settlement option was not compromised following the accident, it was surely challenged by her limited understanding of the law and the strategies pertaining to putting her best foot forward in negotiations with counsel and in the courtroom. The interests of justice are not well served by visiting the consequences sought by the Defendants upon her. To rule otherwise could well produce a chilling effect upon people who, lacking in skills, training and experience, choose to or must present their cases in person in our courts.

[31] As to whether this outcome is fair to the Defendants, I note that they offered over $100,000 to Ms. Baines and left that offer open until the trial began. Had Ms. Baines wished to, she could have waited until the day of trial and then taken the offer. By that time, the Defendants had invested fully two thirds of the money spent on disbursements and a very substantial portion of the money expended on counsel fees and they would have had no recourse to Ms. Baines for recovery of any of that money.

[32] From my review the Defendants’ Costs Outline, it appears that the cost of the trial was less than the $100,000 offered to Ms. Baines. Financially, the Defendants are better off than they would have been had Ms. Baines accepted their offer immediately prior to trial.

[33] Accordingly, I am satisfied that an award of costs against Ms. Baines is not warranted in the circumstances of this case. The defendants’ application is therefore dismissed.

Moore J.
DATE: 11 February 2013

[^1]: Agius v. Home Depot Holdings Inc., 2011 ONSC 5272, at paras. 11 and 12.

[^2]: Agius v. Home Depot Holdings Inc., 2011 ONSC 5272, at paras. 11 and 12.

[^3]: John Doe v. Her Majesty the Queen in Right of Ontario and Attorney General of Canada, 2007 50279 (ON SC).

[^4]: Walsh v. 1124660 Ontario Inc., 2007 4789 (ON SC).

[^5]: Walsh v. 1124660 Ontario Inc., 2007 27588 (ON SC), at para. 25.