SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-09-381115

DATE: 20140414

RE: PAUL BRONFMAN and JUDY BRONFMAN, Plaintiffs

AND:

BFL CANADA RISK and INSURANCE SERVICES INC., Defendant

BEFORE: STEWART J.

COUNSEL:
Brian J.E. Brock, Q.C. and Eric J. Adams, for the Plaintiffs

Deborah Berlach, for the Defendant

HEARD: In Writing

COSTS ENDORSEMENT

[1] In my trial decision of November 12, 2013, I invited counsel for the parties to make submissions on the subjects of the precise calculation of the judgment, costs and interest if these could not be agreed to by them. I now have received and considered extensive submissions from the parties in response to that invitation.

Calculation of Judgment

[2] After 20 days at trial, the Bronfmans recovered judgment in the amount of $2,332,535.00, less the amount of premiums that would have been paid by them from 2005 through 2008 had insurance for their subject jewelry been purchased and the amount paid to them under their existing policy.

[3] Unfortunately, the parties have been unable to agree on what precise deduction to apply for the cost of premiums.

[4] After the robbery, the Bronfmans initially obtained extra coverage for their jewellery from AIG. Although they eventually switched to Chubb, their initial seeking of coverage by AIG is the best evidence of what they probably would have done if they had been properly advised. Accordingly, the judgment should be reduced by the percentage cost of coverage normally charged by AIG for scheduled jewellery during the years 2005 through 2008. This should involve a simple arithmetical calculation. If counsel cannot agree on that percentage, then the percentage charged by AIG on the policy obtained by the Bronfmans immediately following the robbery will apply.

Costs

[5] On September 17, 2012, the Plaintiffs served a formal offer to settle, offering to dismiss their action in return for payment in the amount of $1,950,000.00 plus pre-judgment interest and costs on an amount to be agreed upon or assessed. That offer remained open until the commencement of trial and was not withdrawn.

[6] On August 26, 2011 the Defendants delivered an Offer to settle pursuant to the Rules of Civil Procedure offering to settle the action by payment of the sum of $350,000.00 all-inclusive.

[7] The Plaintiffs’ offer reflects an amount less than that ultimately awarded to them following trial. The Plaintiffs therefore seek costs in accordance with Rule 49.10.

[8] In particular, the Plaintiffs seek costs in the range of $866,664.21 to $893,622.18. These amounts are comprised of costs on a partial indemnity scale up to their offer, and on a substantial indemnity scale following.

[9] The Defendant argues that costs should be awarded to the Plaintiffs, but in the amount of only $100,000.00 all-inclusive.

[10] Several arguments and counter-arguments are advanced by the parties on the issues of costs. Among the various considerations which have been taken into account, I consider the most applicable to this case to be the substantial success of the Plaintiffs in the action, the offer to settle delivered by the Plaintiffs, the conduct of the parties affecting the length of the trial, the duplication of effort necessitated by change of counsel by the Plaintiffs prior to trial, the refusal of a party to admit anything that should have been admitted, the reasonable expectations of the parties and the overriding principle of proportionality as articulated by the Court of Appeal for Ontario in Boucher v. Public Accountants Council (Ontario) (2004) 2004 14579 (ON CA), 71 O.R. (3D) 291 (C.A.)) .

[11] The initial failure of counsel for the Plaintiffs’ to provide copies of dockets in his submissions is ultimately of minimal importance to the exercise of fixing a fair and just determination of the amount of costs to be awarded in a case of this nature. When the issue was raised by the Defendant in responding submissions, redacted dockets were permitted to be provided by Plaintiffs’ counsel in reply submissions. The Defendant was likewise allowed to make further submissions in response so that I might have a full picture of the time said to have been expended on behalf of the Plaintiffs and a complete appreciation all of the arguments advanced by the Defendant in that same regard.

[12] Although the Plaintiffs did not recover 100% of their claim, it is evident that they achieved considerable and substantial success overall in the outcome of their action.

[13] I now turn to the factors affecting the quantum of those costs.

[14] In my view, there is no persuasive reason why the Offer to Settle delivered by the Plaintiffs should not trigger the application of Rule 49.10 which entitles them to costs on a partial indemnity basis up to the date of the offer and on a substantial indemnity basis thereafter.

[15] A great deal of time was spent at trial addressing the existence and value of each individual item of the stolen jewellery. This was dealt with in considerable and exquisite detail by counsel for the Plaintiffs, whom I cannot fault as the exercise was made necessary by the position of the Defendant which required the Plaintiffs to provide strict proof to this degree.

[16] There was no indication of any effort made or offer extended by either party to settle the value of the stolen jewellery or any other significant aspect of damages. Agreement on damages in this case would have shortened the trial considerably, but this did not happen. The existence and value of every ring and bracelet had to be documented and proven. Although the Defendant was entitled to take the position it did, the Plaintiffs should not have to contribute disproportionately to the cost of this process.

[17] Further, the Defendants did not lead expert evidence seeking to support or justify the handling of the Bronfmans insurance needs by their broker. It was not until the end of the evidence that it was clearly admitted that the criticisms advanced by the expert witness called by the Bronfmans were essentially unchallenged.

[18] It is true the Plaintiffs were successful in resisting the mistrial motion brought by the Defendant. However, the motion would not have arisen had full and timely production been made by the Plaintiffs well in advance of the commencement of the trial and before relevant witnesses were called to give evidence. This resulted in undue delay in the proceedings.

[19] The Plaintiffs switched counsel after examinations for discovery were completed and shortly after the initial date for commencement of trial had passed. Inevitably, duplication of effort had to occur of a value in excess of the estimate provided by new counsel for the Plaintiffs. Whatever the reason for the change of counsel may be, the Defendants were not responsible for this development and should not be expected to absorb the resulting additional cost.

[20] Finally, taking into account what must be considered to be the reasonable expectations of the parties and the overriding principle of proportionality, I turn to consider the respective positions of the parties in that light.

[21] The amount requested by the Plaintiffs for costs of a four-week trial of this nature is, in my view, excessive. Likewise, the position of the Defendant is so low as to be entirely unrealistic. The positions of the parties are so unrealistically divergent that any detailed examination of specific claims for hours expended and reasons therefor becomes an exercise occurring in the vacuum between those two extreme positions.

[22] The facts of the case were straightforward. The law applying to those facts is comparatively settled. In my view, although a sizeable judgment was awarded to the Plaintiffs, the amount of costs sought by them for a trial of this nature and length is disproportionate, even if a significant percentage of that amount represents costs on a substantial indemnity scale. Counsel for the Defendant has advised that her client’s actual defence costs have been approximately $275,000.00, plus disbursements.

[23] Having taken all of the factors affecting the assessment of costs into account, I consider that the fair and reasonable amount to award to the Plaintiffs for costs of the action and the trial is $125,000.00 for costs on a partial-indemnity scale prior to delivery of their offer and $350,000.00 on a substantial-indemnity basis for costs, including costs of the trial and these submissions, following.

[24] Accordingly, I fix costs at the aggregate sum of $475,000.00, plus disbursements of $23,438.12 be paid to the Plaintiffs by the Defendant.

Interest

[25] The end result reflects a money judgment. I see no reasonable basis for deviating from the general approach that pre-judgment interest should attach to the judgment in accordance with the Courts of Justice Act.

[26] If there is any issue that remains to be addressed arising out of my decision or these reasons, I may be spoken to.

STEWART J.

Date: April 14, 2014