COURT FILE NO.: 52595

DATE: 2014/10/07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: C.T. and others, Plaintiffs

AND:

K.J. and others, Defendants

BEFORE: RADY J.

COUNSEL:
V. Krkachovski, for the Defendant A

Robert H. Rogers, for the Defendants G.T. and S.T.

HEARD: July 2, 2014

AMENDED ENDORSEMENT

Introduction

[1] The defendant A seeks an Order apportioning the costs of this proceeding as between A and the T defendants.

Background

[2] This action arises from a serious motor vehicle/pedestrian accident that occurred on March 3, 2006 on York Street in London. Four year old C.T. was walking with her grandmother, D.T., on a sidewalk when they were struck by a taxicab owned by M.J. and operated by K.J. K.J. had taken evasive action to avoid a collision with a vehicle operated by G.T. and owned by S.T. G.T. turned left in front of the taxicab.

[3] C.T. and her grandmother both commenced personal injury actions seeking significant damages.

[4] In addition to the owners and operators of the vehicles involved, A was named as a defendant. The claim alleged that A was vicariously liable for the negligence of K.J. Other allegations included that A operated in partnership or an agency relationship with its owners and operators. For ease of reference, these three defendants will be identified collectively as the taxi defendants.

[5] The defendants were insured for the losses. Northbridge insured all of the taxi defendants. K.J.’s policy limits were $2 million. A’s policy limits were $8 million. The T defendants were insured by Personal with policy limits of $1 million. The individual defendants were exposed personally to any claim in excess of their policy limits.

[6] Statements of defence were delivered and examinations for discovery followed in due course. The actions were set down. A judicial pre-trial and a mediation were unsuccessful in resolving the claims. However, after persistent negotiations, a settlement was achieved on October 16, 2013.

[7] In his supplementary affidavit in support of the motion, Mr. Mancuso has sworn that counsel for C.T. had produced evidence that supported the conclusion that C.T.’s claim could be assessed for as much as $20 million.

[8] I was advised that Northbridge tendered the K.J. policy limits of $2 million and Personal paid the T limits of $1 million toward the settlement. Northbridge agreed to contribute $4 million of its policy to settlement. There can be little question that it was this latter contribution led to a settlement being concluded.

[9] Party and party costs paid to the C.T. plaintiffs of $860,000 were funded equally by the T defendants and A, subject to later apportionment. Costs of $58,000 were paid on the D.T. claim, funded by A.

The Parties’ Positions

[10] As a preliminary matter, it became clear during oral argument that the parties’ positions as reflected in their facta had been refined. Both abandoned any suggestion that the court should make a finding of the respective degrees of liability of the individual defendants. This was wise. It would be impossible to do so at this stage of the proceedings on the basis of the limited evidentiary record before me.

[11] As another example, in its factum, A advocated a 75-25 costs split in its favour. During oral argument, it submitted that it was fair and reasonable that the T defendants pay at least 50%.

[12] In their factum, the T defendants urged an 85-15 apportionment in their favour. During argument, they suggested that each group of defendants should contribute one-third.

[13] Both of the parties rely on Rule 57. They part company on whether insurance should play any role in a consideration of costs. Mr. Krkachovski submits that it is an appropriate, if not the only consideration. He points out that his client’s contribution assured settlement; it saved the parties from what would have been at least a twelve week trial; and it shielded the T defendants from personal liability and likely bankruptcy. He further submits that the other defendants’ policy limits were clearly gone early in the litigation but there was a significant triable issue respecting A’s vicarious liability.

[14] Mr. Rogers submits that the availability of insurance is not a permissible consideration and he relies on Cudmore v. Powell, [1999] 16 C.C.C.L.I. (3d) 53 (Ont. C.A.). In that case, the court made the following observation:

[3] This case concerns costs awarded to the plaintiffs (and others) and the insurers involved in this appeal represent separate defendants.

[4] These defendants are the only parties to whom issues of costs should be directed and whatever the suggested “realities” of insurance coverage may suggest as background, the litigation process would be distorted if we did not confine our application of principles to the parties.

[15] The court apportioned costs on the same basis as the defendants had been found responsible. Mr. Krkachovski responds that the case is distinguishable because unlike this case, there was a finding of the defendants’ respective degrees of liability.

[16] The essence of Mr. Rogers’ submission is that each of the three groups of defendants should bear equal responsibility.

Analysis and Disposition

[17] I consider that there is something to be said in favour of both sides of the argument. I have considered the criteria set out in Rule 57 and agree with counsel that most are not applicable or not particularly helpful to the analysis.

[18] However, I have concluded that the fair and reasonable allocation of costs between the moving and responding parties is that each bear 50% of the costs. It is not necessary to determine whether insurance is or is not a relevant or appropriate consideration. My reasons are as follows.

[19] I have reviewed the claim as pleaded against the defendants in the statement of claim. At para. 8, it is pleaded that A was K.J.’s employer; in the alternative in partnership with M.J. and K.J.; or in the further alternative in an agency relationship. The particulars of negligence articulated against A and M.J. are identical. The particulars of negligence against K.J. “for whose negligence…M.J. and A are in law responsible” are set out. As a result, it seems to me that the essence of any claim against A is founded on a theory of vicarious liability. But for K.J.’s negligence, A would not be a party.

[20] As between the individual defendants, it is clear that whatever their respective degree of responsibility for the accident, it would not have occurred but for their combined negligence.

[21] It is not possible at this juncture to determine their respective degrees of fault. The Negligence Act provides at s. 4 that where it is not practicable to determine the respective degrees of fault or negligence between any parties, they are deemed to be equally at fault.

[22] Applying that provision to this situation, I conclude that an appropriate disposition of costs is for the taxi defendants collectively and the T defendants to share costs on a 50/50 basis.

[23] If the parties cannot agree, I will receive costs submissions respecting this motion first from the moving party by July 25, 2014 and the responding party by August 8, 2014.

“Justice H.A. Rady”

Justice H. A. Rady

Date: Redacted version released October 19, 2015