ONTARIO
SUPERIOR COURT OF JUSTICE
BELLEVILLE COURT FILE NO.: 0568/03
DATE: August 5, 2015
BETWEEN:
LESLIE GAIL LLOYD and JASON LLOYD
Plaintiffs
– and –
DAVID P. BUSH, 818601 ONTARIO INC. c.o.b. as MacDONALD’S PROPANE, THE CORPORATION OF THE COUNTY OF LENNOX AND ADDINGTON, and THE CORPORATION OF THE TOWN OF GREATER NAPANEE
Defendants
R. Steven Baldwin, for the Plaintiffs
David G. Boghosian and Laura M. Day, for the Defendants, Town of Greater Napanee and County of Lennox & Addington
BASED ON WRITTEN SUBMISSIONS
tAUSENDFREUND, j.
SUPPLEMENTARY REASONS
- Following an 18 day trial in October with written submissions in December 2014, Reasons for Judgment in this action were released on February 6, 2015. The parties have since been unable to resolve the matter of costs. In addition, several issues have surfaced which require resolution. Therefore, these supplementary reasons:
NET PAST LOSS OF INCOME DAMAGES
The judgment awarded $300,000.00 as past loss of income for the Plaintiff, Leslie Lloyd (“Leslie”). It also provided that the Defendants were to be credited with Income Replacement Benefits (“IRB’s”) in the amount of $219,707.50 paid to Leslie to the start of trial.
The assessment of liability against the Defendant Bush was 30 %. Contributory negligence was assessed at 10 % against Leslie. The Municipal Defendants (collectively “L&A”) and the Plaintiffs agree that Bush is responsible for $90,000.00 of the $300,000.00 finding of past loss of income. Bush is a “protected defendant” under ss. 267.3 and 267.5(1) of the Insurance Act. As such, Bush is entitled to deduct 100 % of the available Accident Benefits (“AB”) credits from his share of the past income loss award. That leaves $129,707.50 ($219,707.50 - $90,000.00) of IRB credits.
Liability of L&A was found to be 60 %, which is $180,000.00 of the $300,000.00 past loss of income award. L&A states that the balance of the available IRB credit of $129,707.50 should leave an outstanding balance of $50,292.50 ($180,000.00 – $129,707.50) owing to the Plaintiffs by L&A on the past loss of income part of the judgment.
The Plaintiffs have a contrary view. They state that Leslie, as the owner and occupant of the vehicle involved in this collision, is also a “protected defendant” pursuant to ss 267.3 and 267.5 of the Insurance Act. The Plaintiffs state that the collective 40 % liability found as against Bush and Leslie which is $120,000.00 of the $300,000.00 past loss of income finding should be deducted from $219,707.50 of IRB’s paid to Leslie. The balance of $99,707.50 should then be deducted from the 60 % of L&A’s liability which is $180,000.00. This would result in an amount of $80, 292.50. This sum, the plaintiffs state, should be L&A’s obligation of the past loss of income claim.
I cannot accede to the position the Plaintiffs here advance.
Applicable sections of the Insurance Act, are these:
Section 267.3: In sections 267.4 to 267.12,
“Protected defendant” means a person who is protected from liability by subsections 267.5(1), (3) and (5).”
Section 267.5(1)
“. . .the owner of an automobile, the occupants of an automobile and any person present at the incident are not liable in an action in Ontario for the following damages for income loss or loss of earning capacity from bodily injury or death arising directly or indirectly from the use or operation of the automobile:
Damages for income loss suffered in the seven days after the incident.
Damages for income loss suffered more than seven days after the incident and before the trial of the action in excess of,
i) 80 % of the net income loss during that period, . . .”
Section 267.8(1):
Section 267.8(1): “ 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 damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:
- All amounts in respect of the incident that the Plaintiff has received or that were available before the trial of the action for statutory accident benefits in respect of the income loss and loss of earning capacity”
Section 267.8(8):
“The reductions required by subsections (1), (4), (6), shall be made after any apportionment of damages required by section 3 of the Negligence Act.”
- Section 3 of the Negligence Act reads:
“In any action for damages that is founded upon the fault or negligence of the defendant, if fault or negligence is found on the part of the plaintiff that contributed to the damages, the Court shall apportion the damages in proportion to the degree of fault or negligence found against the parties respectively.”
I find that the above referenced sections of the Insurance Act must be read in conjunction with and are subject to the application of section 3 of the Negligence Act.
As Leslie was found to be 10 % contributorily negligent, her entitlement to past loss income is $270,000.00. This sum, less the $219,707.50 already received in AB, amounts to a further payment of $50,292.50, the amount L&A states should be its obligation on this point. I agree.
CALCULATION OF TRIAL JUDGMENT BEFORE COSTS
The parties agree on the calculation of the trial judgment except for the issue of net past income loss on which I have now ruled and the pre-judgment interest on the judgment at 3 % since January 2003, which I calculate to be $9,122.92.
The summary of the trial judgment before costs is as follows:
a)
General damages
$300,000.00
b)
FLA damages
130,000.00
c)
Pre-judgment interest
260,150.00
d)
Future care
408,886.00
e)
Future attendant care
2,000,000.00
f)
Future income loss
1,260,000.00
Sub-Total
$4,359,036.00
Reduced for apportionment of Liability of 60 %
$2,615,421.60
Net past income loss
$50,292.50
Pre-judgment interest on past income loss
$9,122.92
Total judgment (excluding costs and disbursements)
$2,674,837.02
- The plaintiffs settled with MacDonald’s Propane during the course of the first trial. Both sides agree that the Municipal Defendants receive no credit for the settlement with MacDonald’s Propane, as this trial award of damages against MacDonald’s Propane exceeds the amount of the settlement. Accordingly, the obligation for this judgment is entirely that of the Municipal Defendants.
COSTS
COSTS OF FIRST TRIAL
The Judgment following the first trial dismissed the plaintiffs’ action with costs to the defendants fixed at $392,683.00 including disbursements.
The plaintiffs appealed. The Court of Appeal allowed the appeal and ordered a new trial. The costs awarded to the defendants for the first trial were set aside with the exception of $1,200.00 which had been awarded to L&A following a successful motion. The Court of Appeal further ordered that each party was to be responsible for their own costs at trial.
The plaintiffs state that their success at the second trial entitles them to have included in their costs award those costs applicable to the first trial. They state that there was no determination by the Court of Appeal on the merits of the first trial. For that reason the costs in relation to that trial, they state, should be included as costs awarded to the plaintiffs for the second trial. They also note that the Court of Appeal did not expressly direct that the costs of the first trial were to be costs thrown away. L&A urges that if the Court of Appeal had intended to leave the issue of costs of the first trial to be decided by the Judge hearing the second trial, it would have expressly said so. It did not. The defendants rely on Schmidt v. Robb (1983), 21 A.C.W.S. (2d) 444 (Ont.S.C.) cited at para. 105.5 in Orkin on The Law of Costs. The author of that text stated that an Order of the Divisional Court awarding “costs of this hearing” meant that, in the absence of any clear limitation, these costs included preparation for the hearing as well as costs of the hearing itself. However, this was not a decision of the Divisional Court, but a costs decision of the Taxing Officer following a Divisional Court decision.
Preparation for the first trial encompassing all necessary measures from the start of the action, including pleadings, discoveries, interlocutory proceedings and preparation for trial are necessarily all matters required for trial, be it for first or the second trial. The Court of Appeal set aside the first trial based entirely on its finding of reasonable apprehension of bias resulting from comments made by the trial Judge. In setting aside the first trial and awarding no costs to either side, I interpret the Court of Appeal’s intent in that regard to not visit the result of that trial on either side.
In my view, that intent would not affect the necessary steps of trial preparation for the second trial. That would include the preparation leading up to the first trial. I also note the language of the Court of Appeal that each party should be responsible for their own costs at trial rather than using the phrase “the proceedings”. I distinguish Schmidt v. Robb from the matter before me and I hold that it does not apply to these facts.
In my view, the plaintiffs are and shall be entitled to the preparation for the first trial, but not to costs of the trial itself.
COSTS AWARD – GENERAL PRINCIPLES
The award of costs is governed by s.131(1) of the Courts of Justice Act, R.S.O. 1990, c.43 and by Rules 49 and 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Although the award of costs is a matter of judicial discretion, I remind myself that it must be exercised in a principled fashion as detailed in Rule 57.01.
The Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 stated at para 26:
“The objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.”
- I am also mindful of these comments by the Court of Appeal in Clarington v. Blue Circle Canada Inc., 2009 ONCA 722:
Para 20
. . . the principles established in Boucher [supra] and Moon v. Sher (2004), 2004 39005 (ON CA), 246 D.L.R. (4th) 440 (Ont.C.A.). . . are that the fixing of costs is not merely a mechanical exercise; that the result of applying the costs grid must be considered, in particular whether in all the circumstances the result is fair and reasonable; and that in deciding what is fair and reasonable, the expectation of the parties is a relevant factor
Para 28
. . . elevated costs are warranted in only two circumstances. The first involves the operation of an offer to settle under Rule 49.10, where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction
“Para 51
In Anderson v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC), 264 D.L.R. (4th) 557, the Divisional Court set out several principles that must be considered when awarding costs:
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). . .
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. . .
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.).
The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.”
The parties agree that the plaintiffs served a Rule 49 Offer to Settle on September 26, 2014, more than seven days prior to the commencement of trial on October 6, 2014. This offer was less than the award granted to the plaintiffs in this trial. Accordingly, the plaintiffs are entitled to substantial indemnity costs as of September 27, 2014.
This trial is an example of “hard-fought litigation”. As “no quarter was given and none expected”, based on their success at this trial, counsel for the plaintiffs urges that I should consider an elevated amount of costs. However, I decline to do so. In that decision, I am guided by the principle Dubin, J.A. expressed in Foulis v. Robinson (1978), 1978 1307 (ON CA), 21 O.R. (2d) 769 at p. 776 that
“Under our system, defendants are entitled to put the plaintiff to the proof, and there is no obligation to settle an action.”
Having touched upon the principle that elevated costs may be warranted if the losing party has engaged in behaviour worthy of sanction, I emphatically note that this does not apply in the facts of this case.
- Applying the above factors and excluding the period April to June 2009, which encompasses the time for the first trial, I have these comments concerning the plaintiffs’ Bill of Costs:
a) Preparation For The Trial:
- March 2003 to April 2009
i) Steven Baldwin has practised civil litigation since 1993. Based on the hourly rates suggested by the Costs Subcommittee of the Civil Rules Committee, he would be entitled to $356.00 per hour, applying the intervening inflation factor.
ii) Lorraine Thomson is a licenced paralegal and is the assistant to Mr. Baldwin. She has worked in that capacity since 1982. As an assistant to Mr. Baldwin, Ms. Thomson will be entitled to an hourly rate of $180.00. This is an amount somewhat less than a junior lawyer, but higher than a law clerk.
iii) Disbursements for the first trial in the amount of $53,530.00 including interest will be excluded.
iv) Trial time for the first trial will be excluded.
- Applying the above factors and comments, I assess the costs due to the plaintiffs as follows:
a) Fees including initially GST and then HST $750,000.00
b) Disbursements including interest from the date of
payment of each disbursement item ( those
disbursements incurred for the period April to
June 2009 including interest having been excluded) 167,937.00
Total: $917,937.00
The plaintiffs shall be entitled to post judgment interest at 3 % per annum commencing February 6, 2015.
L&A has raised the issue of the plaintiffs’ entitlement to future Statutory Accident Benefits under 267.8(9) and (10) of the Insurance Act. That is not a matter that was raised before me at this trial. I decline to rule on the possible future obligation of the plaintiffs as trustees for any payments they may receive under these sections of the Insurance Act.
Honourable Mr. Justice W. Tausendfreund
Released: August 5, 2015
BELLEVILLE COURT FILE NO.: 0568/03
DATE: August 5, 2015
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LESLIE GAIL LLOYD and JASON LLOYD
Plaintiffs
– and –
DAVID P. BUSH, 818601 ONTARIO INC. c.o.b. as MacDONALD’S PROPANE, THE CORPORATION OF THE COUNTY OF LENNOX AND ADDINGTON, and THE CORPORATION OF THE TOWN OF GREATER NAPANEE
Defendants
SUPPLEMENTARY REASONS
Tausendfreund, J.
Released: August 5, 2015