BARRIE COURT FILE NO.: 10-1103

DATE: 20131007

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: GREG GLASS and LEANNE GLASS, Plaintiffs

AND:

JASON GLASS and HARRY GOLZIN and TWD ROAD MANAGEMENT INC., Defendants

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL:

M. Elkin and N. Skupsky, for the Plaintiff

J.C. Blouin and H. Nguyen, for the Defendant

HEARD: By written submissions

COSTS ENDORSEMENT

[1] This matter proceeded by way of a jury trial. The plaintiff was successful in obtaining an award of $125,000 in general damages and $150,000 for future cost of care. Plaintiff’s counsel submits that the total judgment, with interest, is $291,178.40. The plaintiff was unsuccessful in his claim for past and future wage loss. The parties have not reached an agreement with respect to costs and have now made written submissions.

[2] The plaintiffs submits the cost should be awarded on a substantial indemnity basis in the total amount of $247,949.00 broken down as follows:

• Legal Fees including HST $189,836

• Disbursements plus HST $58,119

[3] The defendant submits that there is no basis for award of substantial indemnity and the plaintiff’s costs should be considered on the basis of partial indemnity. The defendant does not take issue with the amount of hours claimed by the plaintiff except for hourly rates with respect to the correspondence aspect of the account. The defendant further submits that as a general principle the costs sought are out of proportion to the award made by the jury and that the hourly rate claimed by the plaintiff’s counsel are in excess of the costs grid and exceed the defendant’s lawyer’s own hourly rates.

[4] The defence also takes issue with certain disbursements incurred by the plaintiff but concedes that disbursements including HST should be allowed at $37,500. After making allowances for the legal fees on a partial indemnity basis and a lower hourly rate the defence submits that costs should be awarded in the amount of $60,000 plus HST together with the disbursements of $37,500 inclusive of HST for a total award of $105,300.

[5] The plaintiff responds that although its settlement offer was not matched by the jury award, the award came very close to what the plaintiff was prepared to accept. The plaintiff also submits that there was conduct by the defendant that caused trial delay and inefficiencies. The plaintiff also submits that the hourly rates charged were appropriate for plaintiff’s counsel and the hourly rates charges by plaintiff’s counsel cannot be easily compared to rates for defence counsel acting on a regular retainer for a large insurance company. Plaintiff’s counsel submits that it took substantial risk by paying for all disbursements with no prospect of more than minimal recovery if they were unsuccessful.

ANALYSIS

[6] It’s well settled at s. 131 of the Courts of Justice Act, R.S.O. 1990 c.C.43 provides considerable judicial discretion of the issue of fixing costs. The principles set out in rule 57.01 of the Rules of Civil Procedure also give guidance to the court.

[7] In Serra v. Serra, [2009] O.J. No. 1950 the Ontario Court of Appeal provided the following guidance on costs principles at para. 8:

Modern cost rules are designed to foster three fundamental purposes:

1. To partially indemnify successful litigants for the costs of litigation;

2. To encourage settlement; and

3. To encourage and sanction inappropriate behaviour by the litigants.

[8] The Court of Appeal in Boucher et al v. Public Accountants Counsel for the Province of Ontario, 2004 14579 (ON CA), [2004] 71 OR (3d) 291 (C.A.) provided comments on cost issues. As Armstrong J.A. sets out at para. 24:

While it is appropriate to do the cost grid calculation, it is also necessary to step back and consider the result produced and then question whether, in all the circumstances, the result is fair and reasonable. This approach was sanctioned by the court in Zesta Engineering Ltd. v. Cloutier 2002 25577 (ON CA), 2002 O.J. No. 4495 which stated:

In our view the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual cost to the successful litigant.

[9] The Court of Appeal spoke to the issue of reasonableness in Clarrington (Municipality) v. Blue Circle Canada Inc. 2009 ONCA 722, [2009] O.J. No. 4236. Epstein J.A. reviewed the leading authorities with respect to the reasonableness principle and stated at para. 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 cost of the successful litigant.

[10] The awarding of costs on a substantial indemnity basis is only granted in rare and exceptional circumstances. As Fedak R.S.J. stated in Dyre v. Mekindas Snyder Partnership Inc., 1998 14847 (ON SC), [1998] O.J. No. 2204 para. 4:

That it is only in the rare and exceptional case that costs are awarded on the solicitor and client scale rather than on a party and parties scale…only conduct of a reprehensible nature has been held to give rise to an award of solicitor and client costs.

In cases where solicitor and clients costs were awarded, there were specific acts or a series of acts that clearly indicated the defendants abuse of the process, thus warranting such costs as a form of chastisement.

[11] In Davies v. Clarrington (Municipality), 2009 ONCA 722, [2009] O.J. No. 4236 Epstein J.A. reviewed the issue of the awarding of costs on an elevated scale. As stated at para. 28:

This court, following the principle established by the Supreme Court, has repeatedly said that elevated costs are warranted only in two circumstances. The first involves the operation of an offer to settle under rule 49.10 where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction.

[12] In my view there is nothing in the conduct of the defendant that warrants a substantial indemnity award of costs. This was a hard fought trial, the plaintiff received a level of success but was unsuccessful with respect to his claim for past and future wage loss.

[13] Having considered the submissions of both counsel, the actual jury award and the principles of reasonableness I am satisfied that a costs award for fees to the plaintiff on a partial indemnity basis of $100,000 inclusive of HST is fair and reasonable under the circumstances.

DISBURSEMENTS

[14] The disbursements claimed by the plaintiff totalled $58,118.83 including HST. The defendant suggested that certain disbursements should not be allowed reducing the disbursements claimed to $38,500 inclusive of HST. Counsel for a plaintiff in preparing a case is entitled to call upon such experts as he may feel necessary to prepare the case however, if those experts are not called to trial or their evidence is of limited assistance to the plaintiff then clearly the costs of these experts should not be borne by the defence. Such costs would be beyond what a unsuccessful defendant should be expected to pay when costs are ordered. I would therefore reduce the disbursements inclusive of HST to $50,000.

[15] It is therefore ordered that the defendant pay the plaintiff’s costs of $150,000 for fees and disbursements inclusive of HST within 30 days of the release of this Endorsement.

MULLIGAN J.

Date: October 7, 2013