BRACEBRIDGE

COURT FILE NO.: CV-300-05

DATE: 20131002

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HUBA JANOS VANCSODY, MAGDOLNA VANCSODY, KRISTISZYTINA VANCSODY, ATTILA VANCSODY, and ORSOLYA VANCSODY

Plaintiffs

– and –

STEVEN J. WRIGHTMAN

Defendant

S.J. Smith, for Magdolna Vancsody and Attila Vancsody, Defendants by Counterclaim

R.S. Baldwin, for the Defendant

HEARD: at Barrie on September 30, 2013

REASONS FOR DECISION ON MOTION

R. MacKINNON, J.

Background

[1] Counsel for the defendants by counterclaim moves for an order granting judgment following the trial and the receipt of my January 23, 2013 reasons on costs. She also seeks an order that those costs be paid by or on behalf of the defendant Wrightman forthwith to Allstate as the insurer for her clients of record.

Preliminary Motion to Strike Affidavit

[2] Mr. Baldwin, for the defendant, brought a preliminary motion to strike the September 18, 2013 affidavit of Sheldon Gilbert are filed in support of the moving parties’ motion. That affidavit will not be struck. The motion now before me deals with the issue of trial costs, which is the essential reason why the form of trial judgment has remained outstanding so long and has not been settled. The Gilbert affidavit specifically dealt with how costs should be paid, from the point of view of the defendants by counterclaim. It is, seen in that light, relevant, material, and admissible.

Settling the Form of Judgment

[3] It will be obvious to the reader of my January 23, 2013 Costs Reasons that the wording in para. 21 cannot stand with the reasoning and wording in paras. 12, 13, 16, and 17.

[4] I clearly found in those latter paras. that there was nothing in the record to justify a costs award against Magdolna Vancsody. Her participation at trial to assert her derivative claim, although unsuccessful by virtue of her failure to meet the Insurance Act threshold, did not expose her to a costs award. As I wrote in paras. 10 and 13 of my January 23, 2013 costs reasons, Magdolna Vancsody and Attila Vancsody were thoroughly successful at trial on liability. They required Ms. Smith’s firm as separate distinct counsel retained by their insurer as there existed a clear conflict of interest which prevented their own plaintiffs’ counsel from also acting for them on the counterclaim. Allstate was required by law and by the terms of its policy insurance to retain separate counsel for them, and did so. The defendant Wrightman and his insurer, State Farm, could not have thought otherwise. As defendants by counterclaim, Magdolna and Attila Vancsody fully succeeded in defending the main action and, as such, cannot now be required to pay for their success.

[5] I turn now to the wording in para. 21 of my January 23, 2013 reasons. It was clearly an accidental slip to have written, as I did, that costs to the defendant Wrightman were ordered against both Huba and Magdolna Vancsody. I have reread all costs submissions and my reasons in their entirety in this reconsideration. I am not functus officio as the judgment has not yet been perfected by formal entry.

[6] I accordingly amend para. 21 to read as follows:

[21] I fix partial indemnity costs of the defendant Wrightman against the plaintiff Huba Vancsody from October 11, 2011 onwards to the end of the trial in the sum of $75,000 inclusive of fee, disbursements, and HST/GST.

Paragraph 6(b) of the draft judgment at Tab F of this Record shall be amended accordingly.

[7] I repeat that the defendant Wrightman was totally unsuccessful in the counterclaim asserted by his insurers, State Farm. He argues, even in that context, that the court should confine its costs orders only to parties in a lawsuit, not to their insurers. He posits that insurers are not generally entitled to costs and that only parties to litigation can be liable for costs. He argues that Allstate, as insurer for the defendants by counterclaim Magdolna and Attila Vancsody, cannot put itself in a better situation than the parties. Accordingly he seeks set off from the $30,000 costs order against Mr. Wrightman in para. 22 of my costs reasons. I disagree.

[8] The costs which I awarded to the defendants by counterclaim in para. 22 were not for costs actually personally incurred by them on the counterclaim but rather were costs incurred by Allstate on their behalf pursuant to their policy of insurance which provided both a defence and indemnity to them. It is entirely appropriate in the circumstances, and I order, that the $30,000 costs set out in para. 6(c) of the draft judgment at Tab F of this Record be paid by State Farm as insurer of the defendant Wrightman to Allstate as the insurer of the defendants by counterclaim in the amount of $30,000 plus post-judgment interest at 3 percent per annum from January 23, 2013. To order otherwise in these circumstances would be to ignore reality.

[9] Counsel for the moving party shall forthwith prepare a fresh draft judgment for my signature in accordance with the draft at Tab F and with this ruling. She shall seek approval of Mr. Baldwin as to form and content. If that approval is not forthcoming by October 8, 2013, she shall forward the judgment to me in care of my secretary at Barrie for my signature. Mr. Baldwin shall have until October 18, 2013 noon to forward his written comments to me on that draft, if at all.

[10] Counsel for the moving party seeks costs of this motion. While I believe it was clear on the totality of my January 23, 2013 costs reasons that no costs set-off was available to Wrightman and his insurers, I acknowledge that some of counsel’s confusion may have resulted from my accidental slip in para. 21. In the circumstances there are no costs ordered on this motion.

R. MacKINNON, J.

Released: October 2, 2013