Ayub v. Sun, 2015 ONSC 2369
CITATION: Ayub v. Sun, 2015 ONSC 2369
COURT FILE NO.: CV-11-427143
DATE: 20150415
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MOHAMMAD MOHAMMAD AYUB
Plaintiff
– and –
YI-WEN SUN and 1638940 ONTARIO INC.
Defendants
COUNSEL:
Shahen A. Alexanian for the Plaintiff
K. Bruce Chambers for the Defendants
WRITTEN SUBMISSIONS ON COSTS
COSTS ENDORSEMENT
DIAMOND J.:
[1] Following the release of my Endorsement dated March 20, 2015 granting the defendants’ “threshold motion”, I have now received and reviewed the costs submissions of the parties.
[2] As previously summarized, the trial of this action proceeded before a jury over a five day period. Liability was admitted by the defendants, with the issues to be determined by the jury limited to causation and damages. On March 18, 2015, the jury awarded the plaintiff $25,000.00 for general damages and $5,000.00 for future health care expenses.
[3] For reasons set out in my Endorsement, I found that the plaintiff’s impairment was not “permanent, important and serious”, and that the plaintiff’s injuries did not fall within the exceptions to the statutory immunity contained and provided for in sections 267.5(3)(b) and 267.5(5)(b) of the Insurance Act R.S.O. 1990 c.I.8.
[4] Both the plaintiff and defendants now claim entitlement to costs of this proceeding.
[5] There is no mention in the plaintiff’s costs submissions of any offer(s) to settle having been delivered by the plaintiff during the currency of this proceeding.
[6] Both parties acknowledge that on January 23, 2015, the defendants served a formal offer to settle upon the plaintiff. The salient terms of that offer to settle were as follows:
(a) payment by the defendants to the plaintiff in the amount of “$5,000.00 for all claims” plus interest in accordance with the Courts of Justice Act; and
(b) payment by the defendants to the plaintiff of his costs to the date of the offer as agreed upon or assessed.
[7] As a preliminary matter, the plaintiff relies upon the decision of the Court of Appeal for Ontario in Rider v. Dydyk (2007) 2007 ONCA 687, 87 O.R. (3d) 507 in support of the principle that the mandatory, statutory $30,000.00 deduction is not to be taken into account when determining whether a party is entitled to costs pursuant to the provisions of Rule 49.10 of the Rules of Civil Procedure. The relevant provisions of the Insurance Act disentitle compensation up to the first $30,000.00 of any award. At this stage of the analysis, for the purpose of the determination of the parties’ respective claims for costs, the plaintiff’s total recovery amounted to $30,000.00, which is in excess of the “$5,000.00 plus interest” offer made by the defendants.
[8] However, this is not the end of the inquiry. As stated, I granted the defendants’ threshold motion. The plaintiff relies upon the decision in Dennie v. Hamilton et al. (2008) 2008 CanLII 5964 (ON SC), 89 O.R. (3d) 542 (S.C.J.) in support of his argument that findings on threshold motions are also not to be considered when determining a party’s entitlement to costs under Rule 49.10 of the Rules of Civil Procedure. In Dennie, the Court held that both the statutory deductions and threshold issues under the Insurance Act had no application to the determination of entitlement to costs. No appellate authority was provided to this Court dealing with the Dennie case.
[9] The Dennie case was considered by Justice Crane in the trial decision of Westerhof v. Gee Estate 2011 ONSC 7437 (S.C.J.). As stated by Justice Crane in Westerhof:
I respectfully disagree however, with the conclusion of the trial judge in Dennie v. Hamilton that s.267.5(9) applies to heads of damages in addition to non-pecuniary under s.257.5(7) of the Insurance Act. In my view s.267.5(5) of the Insurance Act is a distinct enactment fundamental to motor vehicle insurance in Ontario of primarily a first party scheme, with the exceptional resort to third party judgments for those with very serious injuries.
[10] The recent decision of the Court of Appeal for Ontario in Westerhof v. Gee Estate 2015 ONCA 206 did not comment on Justice Crane’s findings in his costs decision.
[11] In the case before me, as a result of the defendants’ successful threshold motion, and to use the words of Justice Crane, the plaintiff “did not have legal entitlement to prosecute or obtain a judgment on his claim for general damages”. As a result, the plaintiff obtained a nil judgment for this Court’s determination of the entitlement to costs of this proceeding.
[12] Having obtained a nil judgment, the provisions of Rule 49.10 do not apply to the parties’ claims for entitlement to costs. The rationale behind the cost consequences of Rule 49.10 was canvassed by the Court of Appeal for Ontario in S & A Strasser Ltd. v. Richmond Hill (Town) (1990) 1990 CanLII 6856 (ON CA), 1 O.R. (3d) 243 (C.A.):
At first glance it seems an anomaly that the plaintiff should be awarded solicitor-and-client costs following the date of an offer, while the defendant only receives party-and-party costs. The answer is found in appreciating that this rule assumes that the plaintiff has recovered a judgment of some value. Without the rule, that plaintiff would normally recover party-and-party costs. The rule gives that plaintiff a bonus for an offer lower than the recovery by elevating costs to the solicitor-and-client level following the offer. The bonus to a defendant who makes an offer higher than the recovery is that the defendant pays no costs following the offer and, in addition, recovers party-and-party costs for that period of time. That rationale does not fit a case where the plaintiff is totally unsuccessful because, without the rule, the defendant is normally entitled to party-and-party costs. The words in the rule “and the plaintiff obtains a judgment as favourable” make it clear that the rule has no application where the plaintiff fails to recover any judgment.
[13] In this proceeding, as a result of the defendant’s successful threshold motion, the plaintiff failed to recover any judgment. As a result, the provisions of Rule 49.10 do not apply.
[14] Pursuant to the defendants’ Bill of Costs, they are seeking fees (inclusive of HST) in the amount of $36,386.00 plus disbursements (inclusive of HST) in the amount of $6,440.85. The total amount sought by the defendants from the plaintiff is $42,826.85.
[15] It is trite to state that the fixing of costs is not simply a mechanical exercise, and the Court must consider the reasonable expectations of both the successful and unsuccessful parties in determining a fair and reasonable result. Pursuant to Rule 57.01 of the Rules of Civil Procedure, the Court may consider the following factors when exercising its discretion to award costs:
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
[16] Costs are in the absolute discretion of the court, and a successful party has a right to a reasonable expectation of costs.
[17] Liability for the accident was admitted. This was a straightforward case of moderate complexity.
[18] In his costs submissions, the plaintiff did not take issue with the amount sought by the defendants, which “appears reasonable for the work done”.
[19] In my view, there is no reason to depart from the usual result that costs follow the event. As stated above, the plaintiff obtained a nil judgment. The defendants are therefore entitled to their costs of this proceeding on a partial indemnity basis.
[20] In the circumstances of this case, and in the interests of justice, I order that the plaintiff shall pay the defendants their costs of the action fixed in the all-inclusive amount of $32,500.00.
Diamond J.
Released: April 15, 2015
CITATION: Ayub v. Sun, 2015 ONSC 2369
COURT FILE NO.: CV-11-427143
DATE: 20150415
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MOHAMMAD MOHAMMAD AYUB
Plaintiff
– and –
YI-WEN SUN and 1638940 ONTARIO INC.
Defendants
COSTS ENDORSEMENT
Diamond J.
Released: April 15, 2015