SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 61916/09
DATE: 2014/04/28

RE: PAMELA MAYER, RALPH WELCH and ALICIA LAUZON, a minor by her Litigation Guardian PAMELA MAYER (Plaintiffs)

- And –

1474479 ONTARIO INC. and ANWAR GEWARGIS SHEMON (Defendants)

BEFORE: JUSTICE I. F. LEACH

COUNSEL:
Gordon Good, for the Plaintiffs

Brian Sunohara and Moussa Sabzehghabaei, for the Defendants

HEARD: In writing

ENDORSEMENT (COSTS)

[1] This action stemmed from a motor vehicle accident in March of 2008, (in respect of which liability was admitted), and proceeded to resolution by a civil jury trial; a trial which began with selection of a jury on September 16, 2013, and concluded with a jury verdict and corresponding judgment on October 10, 2013.

[2] In particular, despite the very substantial sums claimed for injuries and losses alleged to have been caused by the motor vehicle accident, (sums totaling well over two million dollars), the jury awarded the following:

1. For the plaintiff Pamela Mayer:

a. general non-pecuniary damages in the amount of $5,800, (reduced to zero after application of the statutorily mandated deductible);

b. special damages for past income loss to date of trial in the amount of $15,500, (reduced to zero after applying a credit for collateral income replacement benefits);

c. damages for loss of future income, (loss of earnings, earning capacity and competitive advantage), in the amount of $45,000;

d. zero damages for alleged pecuniary loss from loss of interdependent relationship;

e. damages for future housekeeping care costs in the amount of $15,000; and

f. damages for other future care costs in the amount of $56,000;

2. For the plaintiff Ralph Welch, (Ms Mayer’s now estranged spouse):

a. zero damages for nursing, housekeeping and other services provided to Pamela Mayer; and

b. zero damages for loss of care, guidance and companionship; and

3. For the plaintiff Alicia Lauzon, (Ms Mayer’s severely disabled daughter): damages for loss of care, guidance and companionship in the amount of $3,300, (reduced to zero after application of the statutorily mandated deductible).

[3] In short, Ms Mayer was awarded $137,300 (reduced to $116,000 by deductibles and collateral benefits), Mr Welch recovered nothing, and Alicia was awarded $3,300, for a total plaintiff recovery of $119,300.

[4] As the parties were not prepared to make cost submissions in the immediate wake of the jury’s verdict and discharge, I made an endorsement, pursuant to Rule 57.01(7), inviting written cost submissions in the absence of party agreement.

[5] Those gradually were delivered by both parties. In particular, I received written cost submissions from the defendants dated October 25, 2013, written responding cost submissions from the plaintiffs dated November 8, 2013, and written reply cost submissions from the defendants dated November 12, 2013. Other demands of my docket unfortunately have prevented my addressing those submissions in a finalized ruling before now.

Overview of Positions

[6] In broad terms, the plaintiffs say they should receive an award representing their partial indemnity costs throughout this litigation, and that those costs should be quantified at $265,393.21 for fees (inclusive of tax), and $156,662.20 for disbursements (inclusive of tax), for a total all-inclusive cost award of $422,055.41.

[7] The plaintiffs say those costs are entirely reasonable in the circumstances, in that the matter “clearly demanded” considerable care and attention, (despite the jury’s assessment of the case), and having regard to additional considerations such as hardship and the “manifest unfairness” of making any cost award that will result in the plaintiffs effectively being deprived of any benefit from the amounts awarded by the jury, or leave them in substantial debt.

[8] The plaintiffs also say there were no relevant settlement offers, satisfying the requirements of Rule 49.10, to dictate a different approach and result.

[9] The defendants say the amounts claimed by the plaintiffs are not only grossly excessive in any event, but also entirely disproportionate to the jury’s assessment of the case and the amounts recovered by the plaintiffs in the litigation.

[10] The defendants also rely, in particular, on numerous settlement offers, (outlined below). In their submission, the offers clearly establish that the defendants were making sustained and generous efforts to resolve the litigation on a basis that would have left the plaintiffs in a far better position than the one in which they now find themselves. The plaintiffs nevertheless refused to adopt a more realistic view of the case or risks involved, in order to arrive at a reasonable compromise.

[11] The defendants say that, at the very least, any entitlement of the plaintiffs to partial indemnity costs should end as of September 20, 2012, after which the defendants should be entitled to partial indemnity costs, (which they quantify, via an appropriate bill of costs, in the all-inclusive amount of $181,406.76). They also say that the defendants’ cost entitlement in that regard should be set off against any award of costs made to the plaintiffs.

Analysis

GENERAL PRINCIPLES

[12] Pursuant to section 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43, as amended, and 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 costs shall be paid”.

[13] This is supplemented by the provisions of Rule 57.01, subsection (1) of which lists a broad range of factors the court may consider when exercising its discretion to award costs pursuant to section 131.

[14] Our courts repeatedly have emphasized that cost awards must not be a simple mechanical or mathematical calculation; e.g., focused merely on details of time spent multiplied by hourly rates, or a tabulation of disbursements actually incurred.

[15] Rather, all cost claims are subject to the “overriding principle of reasonableness”, as applied to the factual matrix of the case, pursuant to the ultimate “cross check” required by such authorities as Boucher, Moon and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.), and Anderson v. St Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557 (Ont.Div.Ct.).

[16] The overall goal is to award costs in an amount that is “fair and reasonable for the unsuccessful party to pay in a particular proceeding”, rather than a sum tailored to an exact measure of the actual costs of a successful litigant. See Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] O.J. No. 2634 (C.A.), at paragraph 26, and Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. no. 4495 (C.A.), at paragraph 4.

[17] In arriving at a global determination of a cost award that is “fair and reasonable” in this particular case, having regard to all the circumstances, my considerations therefore include but are not limited to those outlined below.

(The full judgment continues verbatim with identical wording and paragraph numbering through paragraph [141], concluding with the order denying costs to both parties.)

“Justice I. F. Leach”

Justice I. F. Leach

DATE: April 28, 2014