Court File and Parties

Citation: Saleh v. Nebel, 2015 ONSC 3680 Court File No.: CV-08-357306 Date: 2015-06-08

Superior Court of Justice - Ontario

Re: Aiyub Saleh, Plaintiff -and- Ludwig Nebel, Defendant

Before: F.L. Myers J.

Counsel: Ryan Naimark, for the Plaintiff Mark Elkin and Nicholas Mester for the Defendant

Read: June 8, 2015

COSTS endorsement

Background

[1] The plaintiff brought this action for damages arising from a motor vehicle accident. The defendant admitted liability for the accident. After an eight day trial, the jury awarded the plaintiff $30,000 for general damages but nothing on his claims for past and future loss of income or for future care. Then, by decision dated February 2, 2015, reported at 2015 ONSC 747, I ruled that the plaintiff’s claim did not meet the threshold of seriousness required to overcome the statutory immunity provided in s.267.5(5)(b) of the Insurance Act, R.S.O. 1990 c.I.8 (“the Act”). I therefore dismissed the action.

[2] Both sides now seek their costs of the action.

[3] In DUCA Financial Services Credit Union Ltd. v. Bozzo, 2010 ONSC 4601 at para. 5, Cumming J. described the basic approach to awarding costs as follows:

Costs are in the discretion of the Court: s. 131, Courts of Justice Act, R.S.O. 1990, c. C.43 and Rule 57.01 of the Rules of Civil Procedure. In Ontario, the normative approach is first, that costs follow the event, premised upon a two-way, or loser pay, costs approach; second, that costs are awarded on a partial indemnity basis; and third, that costs are payable forthwith, i.e. within 30 days discretion can, of course, be exercised in exceptional circumstances to depart from any one or more of these norms.

[4] In Lakew v. Munro, 2014 ONSC 7316 Firestone J. considered the costs in an unsuccessful motor vehicle accident case. The jury declined to award the plaintiff any damages, so the threshold motion was withdrawn. In discussing costs, Firestone J. wrote:

[57] Costs are in the absolute discretion of the court. A successful litigant has no right to costs, but only a reasonable expectation of costs. The plaintiff’s position is that the defendant should be denied his costs and should pay the plaintiff’s costs because of the way in which he conducted the litigation.

[58] In Yelda v. Vu, 2013 ONSC 5903 (leave to appeal denied, 2014 ONCA 353) at para. 11, Arrell J. confirmed the long-standing principle that a successful party is entitled to costs except for good reason. He states as follows:

The principle that costs follow the event should only be departed from for very good reasons such as misconduct of the party, miscarriage in procedure, or oppressive or vexatious conduct of proceedings.

[5] The Divisional Court listed several principles to be considered in considering costs in Andersen v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher [Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291], Moon [Moon v. Sher (2004), 2004 39005 (ON CA), 246 D.L.R. (4th) 440], and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.).

2. A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para.

3. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).

4. The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano v. Bank of Montreal (1998), 1998 5633 (ON CA), 41 O.R. (3d) 222 (C.A.), at p. 249.

5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.

[6] Two fundamental issues inform the discretion to award costs in this case: the outcome and counsels’ failure to comply with the pre-trial Case Management order of Stinson J. dated December 3, 2104.

Failure to meet the threshold.

[7] The jury awarded the plaintiff $30,000 for general damages. The plaintiff therefore argues that he ought to be entitled to costs despite the fact that the statutory deductible would have reduced his award to zero and despite the fact that my holding on the threshold issue led to the outright dismissal of the action.

[8] The statutory deductible is found in para. 3 of s.267.5(7) of the Act. Under that paragraph, a plaintiff’s general damages award is subject to a mandatory deductible that is now set at $30,000. However, s.267.5(9) of the Act is also relevant. It provides expressly that the deductible is not to be taken into account in the assessment of the costs of the lawsuit. Subsection 267.5(9) provides:

In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the determination of a party's entitlement to costs shall be made without regard to the effect of paragraph 3 of subsection (7) on the amount of damages, if any, awarded for non-pecuniary loss.

[9] In, Rider v. Dydyk, 2007 ONCA 687 the Court of Appeal held that s.267.5(9) is a balanced provision that should be applied in accordance with its terms:

21. …Section 267.5(9) supports the objective of s. 267.5(7) by discouraging litigation, while at the same time bringing balance and fairness to the system by shielding plaintiffs from cost consequences unless they have refused an offer that exceeds an accurate assessment of their actual damages.

[10] Therefore, for costs purposes, the plaintiff is to be treated as having won a judgment of $30,000 despite the fact that he would have received nothing once the deductible in para. 3 of s.267.5(7) is applied.

[11] The defendant made no offers to settle. Therefore there is no added complexity to the costs analysis. I do not believe that the failure to make an offer is an issue for costs in this case. In light of my threshold holding, the defendant’s refusal to make an offer was an appropriate, if risky, strategy.

[12] The defendant relies on the outcome of the threshold decision as a basis to entitle him to costs. As noted above, the plaintiff failed to prove that his claim met the threshold of seriousness required by s.267.5(5)(b) of the Act. The plaintiff says that his costs should be decided without regard to that section too. I disagree.

[13] Justice Diamond recently described the current state of the law on this issue in Ayub v Sun, 2015 ONSC 2369 as follows:

8. As stated, I granted the defendants’ threshold motion. The plaintiff relies upon the decision in Dennie v. Hamilton et al. (2008) 2008 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, 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.

[14] At para. 24 of Dennie, Justice Whalen held that the threshold issue should be treated the same as the deductible for costs purposes because, “[i]t would be inconsistent to take some aspects of the operation of the Insurance Act on damage assessments into account while ignoring others.” In my respectful view, the court is not being inconsistent in interpreting the Insurance Act as it is written. The statute prescribes different treatment for the deductible and the threshold. As dealt with above, s.267.5(9) of the Act provides expressly that the deductible is not to be considered for costs purposes. There is no similar provision for the threshold issue which is in the same section of the Act. Had the Legislature intended that the threshold be excluded from costs considerations, it could have readily provided for that outcome.

[15] Moreover, the threshold and the deductible are quite different in a way that is relevant to costs. A plaintiff should not be bringing a case that is not serious enough to meet the threshold. Plaintiffs’ counsel know that no matter what a jury may find, if they do not meet the threshold, the case will be dismissed. It is a hurdle which must be overcome in every case in order for a plaintiff to be entitled to sue in Ontario.

[16] The deductible, by contrast, assumes that the plaintiff’s claim meets the threshold and that the plaintiff is successful in his or her lawsuit. All successful plaintiffs’ non-pecuniary damages awards will be reduced by the deductible amount. However, as the threshold is met, the claim is serious by definition and deserved to be brought.

[17] There is also a difference in the predictability of decisions on the threshold and the deductible. Allowing the costs outcome to turn on the application of the deductible may be a harsh result given the unpredictable nature of the award. While experienced counsel are able to estimate the value of their clients’ damages, the valuation is ultimately in the hands of the trier of fact – whether a jury or the judge. The opposing parties will present arguments supported by case precedents that will show, in most cases, that there is a range of values for general damages in similar cases. Especially when juries are involved, there can be wide divergence in awards. Quantifying a value for non-pecuniary damages is very subjective and jury awards, in particular, are subject to a wide range of acceptable outcomes. A $30,000 range in most cases is not a large gulf. The Court of Appeal referred to s.267.5(9) as balanced in this respect.

[18] In this case, the jury was not told about the deductible. By awarding the plaintiff $30,000, the jury was finding that the plaintiff was entitled to some recovery for injuries suffered. The application of the deductible does not mean that the bringing of the claim was unreasonable.

[19] Unlike the deductible, the threshold decision is made by judges only. The definitions involved are very detailed in the Act and in specific regulations that define how the threshold is to be determined. See ss.4.1 and 4.3 of O. Reg. 461/96, as amended by O. Reg. 381/03 under the Act. The threshold decision is nowhere near as subjective as quantifying damages. Unlike the continuum of possible damages awards, the threshold is a binary or yes/no decision. The threshold is a matter which clients and counsel are expected to be able to predict with a fair amount of precision. Unlike the deductible, it is the law and policy of Ontario that defendants should not be sued for claims that do not meet the threshold. A plaintiff who brings an action who does not meet the threshold should be exposed to the risk of costs just like any other plaintiff who brings a lawsuit that she or he was not entitled to bring at law.

[20] Accordingly, as the plaintiff failed to meet the threshold in this case, I would be inclined to view the defendant as having been successful in this action for costs purposes. This factor therefore weighs in favour of a costs award for the defendant. Other than Mr. Elkin’s time for the pre-trial and Dr. Maharaj’s fee, the hours and rates set out in the defendants’ Bill of Costs appear to be reasonable. Accordingly, subject to the next section, I would have fixed the defendant’s costs at approximately $100,000 inclusive of disbursements and HST under the normative approach based on the outcome.

The order of Justice Stinson was breached.

[21] The civil justice system in Ontario is broken. It does not fulfil the goals of providing efficient, affordable, proportionate access to courts for the fair resolution of civil cases. Hryniak v. Mauldin, 2014 SCC 7. It is too slow and expensive to meet the needs of most Ontarians.

[22] While the Supreme Court of Canada sounded an alarm in 2014, the problem did not arise on the sudden. Case law and practice reform have tried to come to grips with unreasonable delays, the proliferation of expert witnesses, the increasing length of trials, the uncontrollable burden of e-discovery, to name but a few of the issues facing the civil justice system. There are formal processes under way to try to reform scheduling and trial management throughout the system. Some areas of the court are further ahead than others in this regard. Nevertheless, long before Hryniak was decided, many judges have embraced and sought to enhance to goals so keenly brought into focus by the Supreme Court of Canada.

[23] In this case, Justice Stinson assisted the parties ready this matter for trial. At a pretrial conference on December 3, 2014, he made a comprehensive Trial Management Order. He ordered two of the plaintiff’s treating physicians to provide copies of their up-to-date treatment records. Counsel were required to review their lists of proposed witnesses to confirm that the trial could be completed in the available ten day window failing which a new trial date would have been required. Stinson J. ordered the following steps to be completed “before the action is ready for trial:”

(1) exchange of updated medical reports after further updated medical examinations by defendant;

(2) updated financial report to be provided by plaintiff;

(3) accounting experts to confer to clarify the difference between their reports, ideally to prepare a summary highlighting the different assumptions that lead [sic] to their conclusions;

(4) order made re production of records by family doctors;

(5) Jury questions to be prepared for start of trial;

(6) Joint Document brief (10 copies) to be prepared prior to trial;

(7) Will say statements for non-party law witnesses 14 days prior to trial, where no reports have been produced;

[24] Justice Stinson had both counsel sign the Trial Management form containing the foregoing directions and orders. Counsel signed the section headed “Certificate” that provides:

I certify that I understand the contents of this report and I acknowledge the obligation to be ready to proceed on the date(s) fixed for the trial.

[25] In addition, both counsel signed the Trial Management form a second time, under the heading “Undertaking to the Court” that provides:

I undertake to advise my client(s) of:

(a) the content of the Pre-Trial Conference Report; and

(b) the obligation to be ready to proceed on the date(s) fixed for the trial

[26] Many of the steps required by Stinson J. required counsel to communicate and to cooperate. The purpose was to help reduce the length and costs of the trial by requiring pre-trial coordination among counsel. Trials can proceed faster and smoother if the lawyers have spoken to each other, identified issues, and worked through as many as they can themselves. It was apparent at the opening of the trial that they had done none of this despite the express order made by Justice Stinson.

[27] As is the usual practice in Toronto, the first meeting of the trial judge and counsel was to pick a jury. Once the jury was picked, I dealt with counsel to confirm their readiness for trial.

[28] I was presented with witness lists that were very long. If all were called, the time required for the trial likely would have exceeded the ten days available. This appeared to violate the trial direction given by Stinson J. referred to in para. 23 above.

[29] The defendant’s counsel advised that he required the plaintiff to prove the authenticity and admissibility of every single document that the plaintiff proposed to put into evidence. That is, he was requiring the plaintiff to call hospital clerical staff, treating doctors or members of their office clerical staffs, and insurance company clerical staff, all in order for each to say only that their files had been kept in the usual and ordinary course of business and that each individual record proffered from those files was made in the usual and ordinary course of business. This evidence is technically required to make business records admissible under s.33 of the Evidence Act R.S.O. 1990, c.E.23. However, unless there is reason to doubt the authenticity of business records, most counsel are able to agree on waiving technical proof issues. At one point, the plaintiff’s counsel asked me to waive the requirement for formal proof of business records. I advised that I could not do so. I also noted that in the event that any counsel required witnesses to attend to provide evidence by rote, with no real basis to be concerned about the admissibility of the records in issue, costs consequences would likely follow.

[30] Counsel also advised at the opening of the trial that joint books of documents had not been agreed upon despite the order of Justice Stinson. The plaintiff’s counsel prepared and attended with ten copies of a voluminous medical records brief. But the defendant’s counsel was not consenting to their authenticity or admissibility as noted above. The defendant’s counsel was particularly concerned that there were medical records produced from treating health care professionals that contained statements of professionals’ contemporaneous treating opinions. Prior to the recent decision of the Court of Appeal in Westerhof, which was released after the trial of this action, this was a concern to some. The plaintiff’s counsel was prepared to redact documents to remove treating professionals’ opinions. Neither counsel sought a ruling as to whether doing so was required.

[31] Counsel needed to spend time to go through the editing process. They had not met and done so before the trial as required by the order of Justice Stinson.

[32] In addition, medical reports were still being exchanged just prior to the trial. Despite the order of Stinson J. requiring the exchange of updated reports prior to trial, the defendant delivered a new report a couple of days into the trial. This report put forward a new theory of the case. The plaintiff’s counsel argued that he had been surprised by a last minute change that required him to go back to his experts. This was not one of those little hiccups that often happen in trials that counsel are expected to be resilient enough to handle. The issue went to the heart of the plaintiff’s theory of the case. The possibility of a mistrial loomed very large on this issue.

[33] Counsel had not agreed upon jury questions before trial despite the order of Justice Stinson.

[34] Counsel had agreed as between themselves to waive Justice Stinson’s requirement that they exchange will say statements of some witnesses.

[35] For the first few days of the trial, counsel were repeatedly required to take time out in the hallway to discuss these issues. The jurors sat in the jury room for significant periods of time while this happened. Ultimately counsel were able to settle upon a document briefs and find a way to deal with the new expert report(s) so as to avoid a mistrial. Unnecessary witnesses were carved off the witness lists and the trial was completed over nine days.

[36] The most obvious first observation was simply that had counsel spoken before the trial to focus on Trial Management as required, the downtime could have been avoided. The urgency could have been reduced or avoided altogether. Moreover, the document briefs settled upon still contained virtually all of the plaintiff’s medical records and hence they were thick briefs with hundreds of documents. As is the norm, very few of those documents were ever looked at or relied upon. There is no way for me to gauge how much of the downtime in this case was spent arguing about the admissibility of, or redacting documents that were never used. In view of the very few documents that were ultimately required, I expect that a fair portion of their time was spent arguing about unnecessary matters.

[37] Standard jury questions were provided to me during the trial. However, at the end of the trial, I pulled a number of the questions from the jury because no evidence was presented to support a decision on those questions. This was not an issue of weighing evidence. If there was any material evidence on an issue, it went to the jury. Counsel surely should know well before the trial, the issues upon which he or she intends to lead evidence. The point of requiring jury questions at the outset is to formulate the issues so everyone in the room knows what issues are in play. This creates a scope by which relevancy of evidence can be assessed. It also greatly assists the judge who can keep track of evidence on an issue-by-issue basis during the trial for use in the charge to the jury. The general overbroad list of questions provided during the trial was of no use to the court. Not only did counsel breach the order of Stinson J., they frustrated the purpose of that part of the order.

The court called for costs submissions concerning the order of Justice Stinson.

[38] As a result of the apparent lack of compliance with the order of Stinson J., the multiple stutter-starts to the trial, including my having drafted an endorsement declaring a mistrial that was avoided only at the last second, I determined to call upon counsel to explain why they had not complied with Justice Stinson’s order and to consider if excess costs had been incurred as a result. Rule 57.07 entitles the court to raise such issues on its own initiative.

[39] Paragraphs 44 to 46 of my threshold decision provided as follows:

[44] The defendant may deliver no more than 20 pages of written submissions on costs plus a costs outline by March 6, 2015. The defendant [sic - plaintiff] may respond with no more than 20 pages of submissions plus their own costs outline by April 3, 2015.

[45] In addition to the normal costs submissions, and regardless of whether costs are otherwise settled between the parties, both sides should make submissions concerning the effect of counsels’ failure to comply with the trial management order of Stinson J. dated December 3, 2014 and whether that should be reflected in costs. The court has a concern as to whether the clients should be held responsible in costs for inefficiencies in the trial that resulted from counsel’s failure to comply with the order of Stinson J., because the clients may already be paying their lawyers for more trial time than ought reasonably to have been necessary had counsel complied with the order instead of ignoring it. Therefore counsel are notified that the court wishes to receive submissions as to whether either or both should be subject to an order under Rule 57.07(1)(a). The inquiry is not wide ranging but relates only to their failure to comply with the order of Stinson J. If counsel are going to point fingers, then their submissions should be supported by proper evidence and cross-examinations if required. There is no page limit on evidence that may be filed. Evidence should not be adduced by administrative staff or colleagues if it is predicated on information and belief from counsel. See: Ferreira v. Cardenas, 2014 ONSC 7119. Counsel may find it appropriate for someone else in their firms to act if they wish to submit evidence. I may be contacted to convene a case conference for directions if required.

[46] All costs submissions are to be made by searchable pdf attachment to an email to my Assistant or on a flash drive delivered to Judges’ Administration at Room 170, 361 University Avenue, Toronto. Copies of case law shall not be provided to me. Cases relied upon, if any, shall be referenced by hyperlinks to another reporting service in the written submissions filed.

The defendant’s counsel ignored the time lines for this costs assessment

[40] March 6, 2015 came and went and I did not receive submissions from the defendant as I had directed. Neither was I contacted to arrange a case conference. The defendant’s counsel simply ignored another procedural direction. I therefore wrote to counsel to inquire after his submissions. I was informed that Mr. Elkin, a colleague of the defendant’s counsel, wished to have a conference call to discuss the matter.

[41] Although the defendant ought to have requested a case conference or directions prior to the expiry of the time set for its submissions, I convened a call with counsel for both parties on March 13, 2015. During the call, Mr. Elkin advised me that he is the sole partner and therefore the owner of the law firm that acted for the defendant. He advised that everything done by the defendant’s trial counsel had been done under his supervision and with his approval. Moreover, he said that his client was very pleased with the result and did not require a reduction in legal fees. Mr. Elkin said that I was interfering in his relationship with his largest client and that even if I ordered wasted costs to be refunded to the client under Rule 57.07, the client would not require him to do so.

[42] I told Mr. Elkin that the question I had raised concerned compliance or lack of compliance with the order made by Stinson J. I told him that the Supreme Court of Canada has said that the civil justice system in Canada is broken and that more intensive Trial Management is one of the mechanisms being implemented to try to repair the system. This trial did not proceed well and it appeared to me that an order of the court was ignored. As such, I said that I required submissions as set out in my endorsement. I also noted that if Mr. Elkin chose to charge his client fees when the court has found them to be unreasonable, that would be a matter for the Law Society rather than for the court. Mr. Elkin advised that he may have to seek external counsel and asked for time to respond.

[43] During the case conference call, I inquired as to the basic positions of the parties. Mr. Elkin reiterated that his client was fully satisfied with the trial. Counsel for the plaintiff advised that it would be his evidence that his efforts to comply with the order of Stinson J. were rebuffed by counsel for the defendant and that counsel for the defendant expressly refused to comply with the order. Mr. Elkin responded that if the plaintiff’s counsel put in such evidence then he would respond in kind and he would declare war with the plaintiff’s law firm. I reiterated that the issues were narrow and were related to the apparent noncompliance with the order to Stinson J. A massive escalation was not required. Having said that, it had been apparent to me that outside counsel and cross-examinations might have been necessary or desired and that was why I had given the defendant’s counsel a month to deliver his submissions and had invited a case conference for directions.

[44] In light of Mr. Elkin’s request for more time, I set April 10, 2015 as the date for the defendant’s submissions.

The defendant’s submissions

[45] On April 7, 2015, I received the defendant’s submissions supported by a brief affidavit of the defendant’s counsel Mr. Mester. Mr. Mester testified that the jury questions were agreed upon shortly after the commencement of the trial. The joint documents brief was also agreed upon within a few days of the commencement of the trial. He testified that the parties were not able to agree on a joint brief before the trial because they required a decision of the court “regarding significant portions of the brief.” At para. 8 of his affidavit, Mr. Mester swore:

8. In addition, the brief that was circulated to my office shortly before trial was created without my input, and contained numerous documents that were objectionable.

[46] Mr. Mester reiterated Mr. Elkin’s advice that “[m]y client is content with the way the trial was conducted and does not wish to impose on me any costs consequences under Rule 57.07.” Finally, Mr. Mester spoke about how he is aware of the desirability of efficiency and he pointed to how time was saved by the agreements made during trial. He finished with the following:

15. I acknowledge that cooperation among counsel is necessary to insure [sic] trials are conducted as efficiently as possible, and I believe this was achieved in this case, despite some delays.

[47] In its written argument, the defendant seeks costs due to the outcome of the trial. It reiterates the evidence of Mr. Mester and submits that ultimately the trial was concluded on a timely basis. The defendant concludes that, “[n]o added court time was taken up due to any failure to timely comply [sic] with Justice Stinson’s order.” The defendant reiterates its satisfaction with the trial outcome and that it does not believe that the provisions of Rule 57.07 should apply.

[48] I pause to note that there were no evidence rulings required or made at the trial “regarding significant portions of the brief.” There were a few issues that arose because of late delivery of records and reports on both sides. As with most evidence issues, they were resolved, in the main, by counsel taking the time to sit down and discuss the points during the trial. The court made rulings on a very few points of limited significance.

[49] I note as well that the time taken up by counsel negotiating was hours and not days or weeks. The issue was not so much the overall time used or not used on negotiations while the jury cooled its heals. That is an important issue to be sure. But I am not saying that this case was particularly egregious in that regard. Rather, what was striking was just the matter-of-fact manner by which counsel had ignored Justice Stinson’s effort to help prepare the trial in advance so as to make the trial run more efficiently. How could there be a near mistrial due to a fundamental change in expert position during the trial? Why were the experts’ reports not delivered well in advance? Why would counsel be requiring proof of authenticity of routine medical files and documents on the first day of trial? Why were issues not worked through in advance so that a definite list of evidence issues could be raised with the judge for resolution at the outset of the trial? Why were the issues in the trial not sufficiently defined so that jury questions could be prepared and ready to go? How could there be voluminous non-agreed documents briefs when less than 20 pieces of paper were really relevant and probably less than five were truly important? Why was a damages assessment with just eight witnesses going to take two weeks? Had no one spoken about the case? The case was a disorganized mess that was proceeding before it was ready despite a very detailed court order designed to help the parties bring order to the process.

The plaintiff’s submissions

[50] On May 6, 2015 the plaintiff’s counsel, Mr. Naimark, delivered a lengthy affidavit, supported by contemporaneous emails that detail his evidence on each of the particulars of Justice Stinson’s order.

The defendant’s counsel refused to cooperate on a joint document brief

[51] In an email exchange on January 8, 2015, Mr. Naimark inquired whether the defendant’s counsel would prepare the joint brief and, if not, whether the defendant would cover the cost of copying by an external service. The defendant’s counsel responded:

I am not preparing the brief, nor will be [sic] client cover your expense of this.

Moreover, I insist that you prove all documents as to authenticity and content.

[52] The plaintiff’s counsel responded reminding the defendant’s counsel that they were ordered to prepare a joint document brief at the pretrial and both counsel had agreed to do it. He also noted that the plaintiff had served the requisite notice under the Evidence Act so that the records listed in the notice “do not need to be proved and are admissible”. The defendant’s counsel responded:

I disagree with your email in its entirety.

Moreover, you have not sent me an index for my review.

[53] By disagreeing to the email “in its entirety”, defendant’s counsel appeared to be disagreeing with the assertion that the parties had been ordered to prepare a joint document brief and had agreed to do it. This is inexplicable. It is also undermined by his next sentence basically inviting a draft index. So, was the defendant’s counsel just being disingenuous and uncooperative? He was certainly not acting within the spirit or the words of Justice Stinson’s order. He was also failing to fulfil his Trial Management responsibilities to cooperate civilly with opposing counsel to ensure that a fair, efficient trial was prepared and ready to go. Moreover, in light of his own email, Mr. Mester’s complaint in his affidavit that the joint brief was prepared without his input rings rather hollow and teeters on misleading.

[54] As a result of this email and the defendant’s requirement that the plaintiff prove the authenticity and admissibility of every document, the plaintiff’s counsel concluded that the defendant’s counsel would not agree upon even routine evidentiary and procedural matters and wrote, “Lets [sic] agree to disagree and let the trial Judge decide.”

[55] Despite this statement of futility, the plaintiff’s counsel sent an index of a draft joint documents brief to the defendant’s counsel and asked the defendant to agree to share equally the costs of preparing the ten copies that had been ordered by Justice Stinson. The draft index included surveillance reports prepared for the defendant. The plaintiff’s counsel also asked the defendant’s counsel if he had any other documents to add.

[56] The defendant’s counsel responded rejecting almost the entire brief including specifically rejecting the plaintiff’s OHIP summary and prescription summary. He rejected putting expert reports into evidence when the experts would be testifying. He required that all medical opinion evidence in the treating doctors’ and hospital notes be redacted. He objected to the property damage insurer’s file being in evidence. He also refused to share the costs of the joint brief.

[57] Apart from making demands, the defendant’s counsel did not propose a way to resolve the issues. He proposed no specific redactions. He did not explain how it could be that the plaintiff’s OHIP and prescription summaries or the property damage file could be problematic. He did not propose a meeting or any alternatives.

[58] The plaintiff’s counsel therefore decided to prepare the “joint” document brief on his own. His firm incurred $882.25 for copying. The briefs were brought to the trial and were the basis of the final exhibits once counsel actually spoke to one another during the trial.

Updated medical reports before trial

[59] Justice Stinson’s order required the parties to exchange updated medical reports before the trial. The plaintiff’s counsel testifies that counsel agreed to each obtain a further report of Dr. Wong for the plaintiff, and Dr. Cameron, for the defendant, and to serve them on each other at least one week before trial. This is corroborated by an email dated December 14, 2014 from plaintiff’s counsel to the defendant’s counsel.

[60] The plaintiff’s counsel served his updated report as agreed on December 29, 2014. The defendant’s expert only saw the plaintiff on January 7, 2015. On January 15, 2015, the defendant’s counsel served two reports from his expert dated January 13 and 15, 2015 respectively. One of these reports referred to yet a third new report dated January 7, 2015 that had not yet been produced by the defendant to the plaintiff. The plaintiff’s counsel asked for the third new report.

[61] By email dated January 15, 2015, the defendant’s counsel wrote:

It is my understanding that we have already served Dr. Cameron’s January 7, 2015 report. However, if I am incorrect in my understanding, I will send you a copy immediately upon my office opening tomorrow morning.

[62] The next morning, the defendant’s counsel wrote again:

Please be advised that we have yet to receive Dr. Cameron’s report dated January 7, 2015. Our office is working feverishly to obtain said report. You will have this report as soon as we do.

[63] The question arises as to how the defendant’s counsel came to the “understanding” that the earlier report had been delivered to the plaintiff if his office had not yet even received it?

[64] The third new report was delivered about an hour later. It was 10 pages in length. It was delivered on the last business day before the trial was set to commence.

[65] The defendant had previously served an expert’s report from Dr. Maharaj dated December 23, 2013. In it, Dr. Maharaj basically agreed with the report of the plaintiff’s expert as to the cause of the plaintiff’s gastric volvulus injury. He disagreed with the plaintiff’s expert as to whether the force of the airbag inflation during the car accident was sufficient to cause the injury that precipitated the gastric volvulus. Dr. Maharaj noted that he had not seen a report of the plaintiff’s abdominal surgery and he reserved the right to change his views once he saw that report.

[66] On the second day of the trial, the defendant’s counsel delivered a new report from Dr. Maharaj in which he said that he had just been shown the surgery report and he had a new theory. He decided that the surgeon reported the wrong condition and so, instead of the only issue being whether an airbag caused an agreed problem, there was now an issue as to what the surgeon saw and treated and whether he had misidentified it. The surgeon’s evidence was now important and it had previously been an agreed fact.

[67] The surgeon’s report was produced by the plaintiff’s counsel to the defendant’s counsel in October, 2013, over 15 months earlier. There has been no explanation by the defendant’s counsel as to why he did not give it to Dr. Maharaj especially after seeing that Dr. Maharaj referred to its absence as significant in his first report in December, 2013.

[68] It was this issue that almost caused the mistrial that was averted only after counsel met and agreed on a way to deal with the problem. The delivery of a new report by the defendant during the trial based on his expert recently being shown documents that had been sent to the defendant’s counsel over 15 months earlier and were identified as missing by the expert over a year earlier bespeaks, again, a lack of attention to Trial Management and to the order of Justice Stinson requiring updated expert reports to be exchanged before the action was ready for trial.

The defendant’s counsel denies the existence of photos that he had already undertaken to produce

[69] As the main issue for the gastric volvulus experts at trial was whether the car accident and, in particular, the force of the air bag deployment, was sufficient to cause the plaintiff’s injuries, the plaintiff sought to rely on the defendant’s insurer’s property damage documentation to demonstrate the severity of the car accident. The defendant’s counsel advised there was no property damage file and that no pictures of the accident were taken. By email dated March 8, 2014, the defendant’s counsel wrote expressly:

There is no property damage file. Mr. Nebel did not have collision coverage at the time of the subject accident. As such, [my client] never took an estimate or took any photos.

These undertakings are now satisfied. [Emphasis added.]

[70] Mr. Naimark questioned this advice and referred to the transcript of examinations for discovery which recorded that the defendant’s counsel had six photographs showing the property damage to the defendant’s car. Moreover, the defendant’s counsel had undertaken to provide copies of those photographs to the plaintiff.

[71] By email dated January 13, 2015, the defendant’s counsel expressly reconfirmed that he had checked with the insurer and “…there are no coloured photos. As such I trust that you will not need to call a property damage adjuster at trial.”

[72] Two days later, on January 15, 2015, the defendant’s counsel sent an email to the plaintiff’s counsel that said, in part:

Enclosed please find the Coloured Photographs and the Estimate which are hereby being served on your pursuant to the Rules of Civil Procedure.

[73] The defendant’s counsel provided no explanation for his two clear representations that these documents did not exist. As was the case with Dr. Cameron’s January 7, 2015 report, it appears that the defendant’s counsel made statements that were not correct and, in each case, delivered important materials only on the very eve of trial despite the order of Stinson J., lawyers’ ethical obligations to fulfil undertakings, and the lawyers’ specific certification of their understanding of the need to be ready for the trial. The defendant’s counsel in each case was either deliberately misstating the truth or was careless as to the truthfulness of his representations. Neither is acceptable.

Other issues for the plaintiff

[74] The plaintiff’s counsel has provided evidence that he complied with the provisions of Justice Stinson’s order concerning the release of updated treating doctors’ files. In addition the accounting experts met as required.

[75] The plaintiff’s counsel explains his delay in preparing jury questions because of the late and unexpected experts’ reports, the late delivery of the property damage file, and his need to scramble given the lack of cooperation by the defendant’s counsel.

[76] The plaintiff’s counsel provided will say statements for his two lay witnesses late and not 14 days before trial as ordered by Stinson J. He says it was an oversight that he partly also attributes to scrambling discussed above. He also notes that counsel did agree that the plaintiff’s evidence could go in without a will say, as could an investigator’s evidence. Ultimately they agreed to admit the investigator’s video without the investigator testifying.

[77] I accept Mr. Naimark’s explanations. Having reviewed the contemporaneous correspondence, he must have been exceptionally frustrated and busy at the last minute.

[78] Finally, the plaintiff’s counsel swears that his firm has yet to be paid anything by the plaintiff.

The continued process for this hearing

[79] After receiving Mr. Naimark’s evidence, on Monday, May 11, 2015, I wrote to Messrs. Naimark, Elkin and Mester as follows:

Please communicate with each other and advise if there is to be any further evidence to be submitted on the outstanding costs motion. If so, it should be scheduled to be delivered forthwith as this matter has been outstanding for some time already. If the evidence is complete, then please just advise me accordingly. In either case may I please hear form counsel on behalf of both parties this week.

[80] The plaintiff’s counsel wrote back that morning to advise that he did not plan to deliver any further evidence. I did not receive a response from Mr. Mester or Mr. Elkin although both of their computers sent receipts for my email.

[81] At 4:02 p.m. on Friday, May 15, 2015, having not heard anything further within the week as I directed, I wrote to all counsel as follows:

Having heard nothing from Mr. Mester or Mr. Elkin within the time specified below, the record is now complete and I will reserve my decision.

I will release a decision in due course.

[82] At 7:29 p.m. on May 15, 2015, I received an email from Mr. Mester that said:

Dear justice Myers:

I apologize for not having responded sooner. I have started a trial earlier this week on Monday and was preoccupied with that. Nonetheless I will seek instructions from my client with respect to whether we will provide additional evidence on the cost of missions.

[83] Two minutes later, at 7:31 pm., Mr, Mester sent a follow-up or correction email as follows:

Dear justice Myers: I apologize for not having responded sooner. However, I was tied up in a trail that commenced Monday of this week. Nonetheless, I will seek instructions from my client as to whether we will put in additional evidence on the cost of missions.

I appreciate your understanding and your further indulgence on this matter.

[84] Ignoring typos and grammar, as atrocious as they both were, it is apparent that the defendant’s counsel does not seem to be concerned with the need to comply with procedural directions and orders of the court; be they Justice Stinson’s order or my schedules. That I had to follow-up with the defendant’s counsel after the initial deadline of March 6, 2015 had passed for his Rule 57.07 submissions under my threshold endorsement was surprising enough. Here, the defendant’s counsel did not bring a motion, formally or informally, to seek leave to file material late. He simply ignored another scheduling deadline and “appreciated” the court’s understanding and indulgence.

[85] In light of the significance and the damning nature of Mr. Naimark’s evidence, I determined that it was important to provide the defendant and its counsel with a further opportunity to respond notwithstanding their continued neglect of scheduling deadlines. By email dated May 18, 2015, I wrote to Mr. Mester (copied to Mr. Elkin and Mr. Naimark) as follows:

Two deadlines have passed in this matter without a timely response from you. If counsel cannot meet a court-imposed schedule, counsel should deal with the problem in advance on notice to counsel opposite.

Please advise by the end of day Wednesday, May 20, 2015, if the defendant wishes to adduce further evidence. In the event that he wishes to do so, please communicate with Mr. Naimark in order to agree upon a schedule for all remaining steps prior to contacting me on Wednesday. Counsel should be cooperating on matters of scheduling.

[86] By email dated May 20, 2015, the defendant’s counsel advised as follows:

We do not wish to submit further evidence on behalf of the Defendant. However, we do wish to reply to some of the legal arguments raised by the Plaintiff in Mr. Naimark's submissions. I confirm that Mr. Naimark, who has been cc'd on this email, is agreeable to a deadline of June 5, 2015 for our reply submissions.

[87] The court accepted the new deadline for submissions. By further submissions dated June 5, 2015, the defendant responded to a particular argument made by the plaintiff in which he sought to rely upon the defendant’s failure to make any settlement offer as a factor relevant to the costs assessment. As noted above, I did not find that argument persuasive in this case in any event.

[88] It is important to note that despite the additional time provided to the defendant to respond, Mr. Mester did not deny any of the emails or statements attributed to him by Mr. Naimark. Mr. Naimark’s evidence is uncontested.

Trial Management orders matter

[89] There are several standards of practice that arise on the facts of this case. There are lawyers’ duties as officers of the court at play. Lawyers also have duties under the Rules of Civil Procedure and the Law Society of Upper Canada’s Rules of Professional Conduct. Lawyers’ behaviour in litigation is also a topic of the Advocates’ Society’s Principles of Civility for Advocates. There are no airtight compartments. One act may involve issues under several different standards. While I am dealing with matters principally from the standpoint of counsels’ duties as officers of the court concerning Trial Management in particular, there is little doubt that many of the issues raised in this hearing are equally issues under all of these standards. The lack of civility to the opposite party displayed by the defendant’s counsel was palpable in his emails. Moreover, there are certainly ethical issues raised by the incorrect representations of fact made by the defendant’s counsel to the plaintiff’s counsel. Many of these questions are for a different forum. Although I refer principally to Trial Management matters, I am not to be taken as ignoring the many applicable standards that may have been violated by the defendant and his counsel.

[90] Trial Management Orders, scheduling orders and directions, and procedural orders made by the court are orders of the court to which compliance is required. It may be that Mr. Mester’s client is satisfied with the outcome of the trial. The court however had numerous concerns as to the manner by which the defendant won. After the trial, I would have been inclined to refer Mr. Mester to the Law Society of Upper Canada for mentoring and to suggest that he take the Intensive Trial Advocacy Workshop offered by Professor Garry Watson each summer. However, in light of Mr. Elkin’s advice that every position taken by Mr Mester was made under his oversight and with his support, the issue is not just inexperience or a lack of education in trial advocacy skills of a junior lawyer assigned to the trial.

[91] As the client is content with its counsel’s conduct, I agree that an order under Rule 57.07 is not required or helpful. The client chose not to obtain independent counsel for this hearing. It is standing behind its counsel’s trial and pre-trial conduct which I therefore assume was carried out with the client’s explicit or implicit approval. I will proceed to deal with costs on that basis.

[92] As officers of the court, counsel are expected and required to cooperate on matters of process and scheduling. Counsel are required to set aside the time to meet and discuss Trial Management in good faith in advance of trial. If there are real evidence issues, they should be identified and resolved in good faith if possible. The existence of issues on some documents is not a reason to refuse to agree to other documents being admissible.

[93] Counsel are not just duty bound to fearlessly raise all issues on behalf of their clients. It is equally counsels’ duty to ensure a fair hearing. That means that process issues like production and scheduling are to be approached in a cooperative basis to reduce cost and aid the most expeditious resolution on the merits available. The commentary under Rule 5.1-1 of the Rules of Professional Conduct of the Law Society of Upper Canada provides:

The lawyer must discharge this duty by fair and honourable means, without illegality and in a manner that is consistent with the lawyer’s duty to treat the tribunal with candour, fairness, courtesy and respect and in a way that promotes the parties’ right to a fair hearing in which justice can be done. Maintaining dignity, decorum and courtesy in the courtroom is not an empty formality because, unless order is maintained, rights cannot be protected. [emphasis added]

[94] In Authorson (Litigation Guardian of) v. Canada (Attorney General), 2002 CarswellOnt 1724, the Divisional Court per curiam put it this way:

A party is entitled to a fair opportunity to present its case in a focused way. Counsel, as officers of the court, are expected in furthering the best interests of their clients to present their case on its merits, its true merits.

[95] Mr. Mester’s response on the joint book of documents was unacceptable. His handling of late medical reports – without notice to the plaintiff’s counsel and actively misleading him - was also unacceptable. His response on the photographs was unacceptable. His refusal to deal with documents, to share joint costs, and his assertions that all documents would have to be proved appears to have been positions that were not adopted in good faith.

[96] Mr. Mester’s evidence for this hearing as quoted above concerning the joint book of documents and his supposed degree of cooperation was facile if not outright misleading.

[97] In UHA Research Society v. Canada (Attorney General), 2014 FCA 134 Stratas J.A. made reference to the importance of scheduling orders of the court as follows:

[8] I reiterate and underscore the fact that the end result is an order of the Court scheduling the appeal hearing. A scheduling order is no different from any other order of the Court – it is an instrument of law, on its terms mandatory and effective.

[10] Scheduling Orders of this Court are not trivial matters that can be set aside whenever something comes up for counsel.

[98] Scheduling orders are particularly important under the new processes adopted for Civil Practice Court under the Toronto Region Pilot Practice Advisory – Civil Practice Court (Regional – October 14, 2014, in effect until July 1, 2015). All significant hearings before the court are now subject to some form of case management. That is, there is greater judicial involvement in overseeing the process by which cases come to court.

[99] The practice of leaving preparation to the very eve of trial hoping that cases will settle is not acceptable. The fact that counsel have for years scheduled discoveries or trials back-to-back for months on end and left juniors or clerks to look after document and trial preparation is no longer acceptable in the main. There are processes that have to change to have cases settled or heard sooner, in less time, with more focus on the real issues. All involve some change in how the profession and the court have traditionally done things.

[100] Undertakings, for example, are ethical obligations and obligations under the Rules of Civil Procedure. The obligation is not to produce documents at the last second after the other side sends four letters and brings a motion as is the ordinary course in Toronto. The sooner undertakings are fulfilled, the sooner cases will be ready for trial and/or settle.

[101] There is no reason for a plaintiff’s entire medical history to go into evidence in a typical personal injury trial. Only documents that are to be used in evidence should be put in the joint books of documents. The parties should have their files at court so as to be ready to supplement the evidence in case unexpected matters arise. But it is wasteful and cumbersome to load the court and the jurors down with multi-volume thick briefs, when a tabbed record of 10-20 documents is all that is required in most cases. Historically, it may have been simpler for counsel to just agree to put it all in without giving thought to the cost or inefficiencies caused by doing so. That is no longer acceptable.

[102] Similarly, the expert’s report of Dr. Cameron never should have waited until January 7 with the trial scheduled just 10 days hence. His reports were unfairly obtained and delivered too late.

[103] Identifying the documents to be put into evidence requires counsel to think about their examinations and cross-examinations in advance. They need to compile a list of documents that they wish to put into evidence. Then they need to share their lists with opposing counsel to avoid duplication and to identify and iron out any admissibility concerns before trial. Trial counsel must meet and go through document and evidence issues so as to prepare their joint document briefs and to agree on the process issues to be put before the trial judge.

[104] In a case management context, the process orders of the court are orders of the court to be obeyed. Schedules are to be met out of fairness to the opposing party and to one’s own client. Court efficiency requires scheduling and adherence to schedules. Gone are the days of years long waits for motions and trials. Case management and features like active Trial Management, let the court and the profession greatly improve access to timely and affordable justice. If counsel has a trial in the way of a scheduled date, then it is incumbent on counsel to do something to either try to amend the schedule or get the work done by others. Counsel cannot unilaterally ignore a court ordered schedule and trust that the court will understand and indulge him or her.

[105] If the focus on the importance of Trial Management is not enforced, nothing will change. It takes weeks, not days, to fulfil Trial Management Orders like those made by Stinson J. I have discussed above some necessary cooperative steps along the way just with respect to joint document briefs.

[106] While it is ultimately true that this case was finished in 8 trial days, the point is that it never should have been scheduled for that long. Had counsel applied their minds to their witness lists and documents in good faith, as required by Stinson J., this case should have taken just a few days. Another trial could have been scheduled and heard in the second week. Playing uncivil, tactical, inappropriate, old-school, trial by ambush games like: threatening to require proof of obviously valid records, holding back important documents until the last second, failing to fulfil undertakings until the eve of trial, delivering new expert’s reports during the trial, saying untrue things to counsel opposite (whether knowingly or not), failing to prepare examinations in advance to “wing it” at trial, refusing to agree to the admissibility of relevant documents while requiring changes to be made to irrelevant ones, refusing to share costs of joint expenses, refusing to cooperate on court ordered process matters, are all wrongful. Most of these things have been considered unprofessional sharp practice and inappropriate for decades.

[107] In light of the defendant’s failure and unwillingness to comply with the order made by Stinson J., its late disclosure of important documents, counsel’s uncivil conduct leading up to and at the trial, and the repeated failures of the defendant’s counsel to comply with the directions and orders of the court, it is appropriate for the court to exercise its discretion to deny the successful defendant its costs. The uncontested evidence of misconduct by the defendant’s counsel is good reason to exercise the court’s discretion to depart from the normal rule that costs presumptively follow the event.

[108] In all, as a result of the manner by which the defendant’s counsel prepared for and presented this case at trial, with his client’s assent, the defendant is being deprived of a $100,000 costs award to which it would otherwise have presumptively been entitled.

[109] Moreover, the defendant shall pay to the plaintiff the sum of $441.13 for one-half of the copying costs of the joint document brief.

[110] There will be no other order as to costs.

F.L. Myers J.

Date: June 8, 2015