Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MELISSA WILLOUGHBY, Plaintiff
AND:
THE DOMINION OF CANADA INSURANCE COMPANY and KAREN ROBINSON, Defendants
BEFORE: The Honourable Justice D.A. Broad
COUNSEL: J. Harrison, for the Plaintiff
B. Kurpis, for the Defendants
COSTS ENDORSEMENT
1The parties have not been able to agree upon costs and have now delivered their respective submissions on costs in accordance with my Endorsement released February 20, 2014. The following is my disposition with respect to the costs of the defendants’ motion.
2In her Statement of Claim, the plaintiff claims entitlement to a non-earner benefit under a policy of insurance issued to her by the defendant the Dominion of Canada General Insurance Company (“Dominion’). She also claimed against Dominion and against the defendant Karen Robinson (“Robinson”) the employee of Dominion who was given responsibility for the adjustment of the plaintiff's claim, damages for wrongful infliction of mental distress, negligent delivery of benefits, bad faith for unreasonable conduct in the claims process, and aggravated, punitive and exemplary damages. The total claim for extra-contractual damages against Dominion and Robinson, in her personal capacity, totaled $6,800,000. I am advised that the maximum value of the base claim for non-earner benefits if the matter were tried in July, 2014 would be less than $150,000 exclusive of interest.
3The defendants moved for summary judgment of all of the claims against them. On the evening prior to argument of the motion counsel for the plaintiff advised that she would be abandoning the claims for extra-contractual damages. Notwithstanding this, the plaintiff did not consent to the dismissal of the action as against Robinson until after an exchange of correspondence between counsel following completion of the argument of the motion.
Governing Principles
Governing Principles
4Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that “subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the cost shall be paid."
5The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1), including, the principle of indemnity and the amount of costs that an unsuccessful party could reasonably expect to pay.
6The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan (1999) O.J. No. 3707 (CA) at para. 24).
7It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario) 92004) O.J. No. 2634 (CA) at para. 26 and Coldmatic Refrigerator of Canada Ltd. v. Leveltek Processing LLC 2005 1042 (ON CA), [2005] O.J. No. 160 (CA)).
8The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson 2002 41469 (Ont. C.A.) and Macfie v. Cater 1920 401 (ON SC), [1920] O.J. No. 71 (H.C.J.) at para 28).
Discussion
Discussion
9I consider that the defendants were the more successful parties on the motion. They were successful in obtaining dismissal of, by far and away, the major portion of the damages claimed by the plaintiff. The defendants were entitled to assume that the plaintiff was seriously intent upon recovering up to $6,800,000 in non-contractual damages against them, and very serious allegations were made against them in the Statement of Claim in support of those claims. The defendants were not required to regard the non-contractual claims as being advanced only for strategic or leverage purposes and therefore not to be taken seriously. They were entitled to take the plaintiff at her word and assume that she fully intended to seek substantial damages against them based upon her very serious allegations of misconduct in the way in which her claim was handled by the defendants.
10Conversely, the plaintiff must be taken to be aware that, having advanced serious allegations of misconduct and bad faith dealing against not only Dominion but also against the individual defendant Robinson, a failure to establish the veracity of those allegations could have costs consequences to her. I accept the submissions of counsel for the defendants that the entire lawsuit has been particularly hard on Ms. Robinson as she was personally exposed to a substantial damage award. In addition, it is noted that the nature of the allegations went directly to her integrity and professionalism.
11The plaintiff fully abandoned the extra contractual claims on the eve of the date set for argument of the motion, suggesting that there never was any basis for them.
12The defendants seek partial indemnity costs of the motion and of defending the action in the sum of $19,116.90 inclusive of HST and disbursements, comprised of $8,315.70 for the motion and $10,801.20 for the rest of the action.
13The costs claim of the defendants for the defence of the action appears to relate to the entire action, with no recognition that the contractual claim for non-earner benefits was not dismissed and remains outstanding. In addition, the defendants’ costs claim for the motion is not reduced in recognition that the plaintiff was successful on the one aspect of the motion which was required to be argued, namely the defendants' claim for summary judgment dismissing the claim for non-earner benefits.
Disposition
Disposition
14In the exercise of my discretion, taking the factors referred to above into consideration, I fix the defendants' costs in defending the action and in prosecuting the motion in reference to the aspects of the plaintiff's action which were dismissed in the sum of $8,500 inclusive of fees, disbursement and HST. This amount reflects an appropriate reduction to reflect the success of the plaintiff in resisting the defendants’ claim for dismissal of her claim for non-earner benefits. The costs are to be paid by the plaintiff to the defendants within 30 days hereof.
D.A. Broad J.
Date: April 11, 2014