ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Jodina Poile,
Vlad Popescu, for the Plaintiff
Plaintiff
- and -
Guy Collins,
Ian D. Kirby, for the Defendant
Defendant
HEARD: January 27, 2015,
at Thunder Bay, Ontario
Mr. Justice F. B. Fitzpatrick
Decision On Costs
1This is a judgment respecting costs. The case settled on the morning the trial was scheduled to commence. The plaintiff accepted the defendant’s offer to settle. The offer provided that the defendant would pay the plaintiff $22,500.00, prejudgment interest on this amount, plus partial indemnity costs to the date the offer was made. The offer was dated October 29, 2014. Costs would be agreed or assessed. Despite the language of the offer referencing “or assessed”, the hearing before me proceeded on the basis that I would fix costs pursuant to Rule 57.
2This matter involved a motor vehicle accident. The defendant admitted liability. There was one day of discovery. There were two pretrials conducted totaling two hours of attendance time. The affidavits of documents exchanged between the parties involved anywhere from 50 to 100 documents. Following acceptance of the offer, plaintiff’s counsel wrote to advise defence counsel that the plaintiff was treating the full amount of the $22,500.00 as general damages.
3The plaintiff now claims $54,848.88 for partial indemnity costs and disbursements to the date the offer was made. The breakdown of the plaintiff’s cost claim is as follows:
Partial indemnity fees $26,823.60 plus HST
Disbursements $18,879.83 plus HST as applicable
Interest on a litigation loan $3,379.30.
4The defendant submits costs should be fixed as follows:
Partial indemnity fees $10,000.00 plus HST
Disbursements $15,683.64 inclusive of HST.
5There are three issues to be determined.
What are the allowable disbursements?
Should the interest on the litigation loan be allowed as a disbursement payable at all and particularly when an offer provides for payment of costs on a partial indemnity basis?
What is the appropriate amount of partial indemnity fees that the defendant should be required to pay the plaintiff?
6Before turning to a specific discussion of the issues, I will set out certain principles from the case law to which I was referred by the parties, that I view as paramount in considering the amount of costs in this particular matter. I am bound to consider all the factors set out in Rule 57.01. I was referred to the decision of the Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario. I was also referred to the decision of Belobaba J. in Mudford v. Smith 2009 CarswellOnt 7111. In Mudford, Belobaba J. gives a useful summary of Boucher at paragraph 7 where he states
7In Boucher, the Court of Appeal reminded trial and motion judges that fixing costs is not simply a mechanical exercise beginning and ending with a calculation of hourly time and rates. The costs award should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs to the successful litigant. In deciding what is fair and reasonable it is relevant to consider the expectations of the parties. When a quantum has been determined, it is then necessary to step back and consider the result produced and assess whether, in all the circumstances, the result really is fair and reasonable.
7In Boucher, at paragraph 38, Armstrong JA set out that in deciding what is fair and reasonable, the expectations of the parties concerning the quantum of a costs award is a relevant factor.
8In my view, in this case, issues of proportionality are also quite significant.
Issue No. 1
9The defence takes no issue with the majority of disbursements claimed by the plaintiff. However there are five specific disbursements, falling into 3 categories which are disputed by the defence. I identify these as falling under Categories A, B and C.
Category A
10The defence objects to two travel disbursements paid to have one of the plaintiff’s counsel travel back to Thunder Bay from Toronto to attend two pretrials in this matter. The total was $596.07. Plaintiff’s counsel having carriage of the file had left the firm and moved to Southern Ontario but was continuing to work on the file until a new lawyer from the firm could take over. Defence objects to this disbursement as being unreasonable when considering costs on a partial indemnity basis. I agree.
11This disbursement may be quite reasonable for a solicitor to charge their own client, but it is not one that the opposite side could reasonably be expected to pay. This disbursement is not allowed.
Category B
12The plaintiff was paid by her counsel an advance for expenses to attend a medical legal assessment in the amount of $320.71. The defence objects on the basis that this attendance was not required by them and it is not one they should reasonably be expected to pay. I agree.
13I am of the view that medical legal assessments are matters of tactical consideration for plaintiffs when the evidence will be used by their own experts. I appreciate that Tariff A, Part II, disbursement item 30, allows reasonable travelling and accommodation expenses ordered by a presiding judge or officer. However in this case it was difficult for me to determine the reasonableness of this expense as the matter did not proceed to trial and I did not have the benefit of assessing the quality or quantity of evidence generated by the particular visit where reimbursement of the expense is sought. In a personal injury action, disbursements associated with the plaintiff’s attendance to assist or permit the preparation of expert evidence seems to me to be a matter that should not fall to the defence, particularly where the defence has only agreed to pay partial indemnity costs. While this type of attendance may be necessary for the litigation to be pursued effectively, the principle of partial indemnity serves as a limit on some of the expenses a defendant might reasonably be expected to pay. I find this particular expense is not one that would be covered by an agreement to pay partial indemnity costs where the matter did not proceed to trial. This disbursement is not allowed.
Category C
14The plaintiff claims $2,810.89 for the preparation of two expert reports which addressed the issue of loss for past and future housekeeping function. The defence objects as he submits the amount of the accepted offer relates only to “general damages” and not for these type of damages which the defence characterizes as pecuniary special damages. The plaintiff agrees that damages for past loss of housekeeping function are not general damages, but argues that some components of a future loss of housekeeping can be categorized as “general pecuniary damages” (plaintiff’s counsel’s description in argument). The defence characterizes this as an oxymoron, as general damages and pecuniary damages are mutually exclusive.
15The plaintiff relies on the decision of the Ontario Court of Appeal in McIntyre v. Docherty (2009), O.R. (3d) 189 in support of this proposition. I disagree that this case supports the proposition put to Court by the plaintiff in this case. In McIntyre, the Court does engage in an extensive discussion of the nature of pretrial housekeeping housekeeping damages. In fact, at in paragraph 20 Lang J.A. makes it quite clear what she intends to deal with in the judgment, and the nature of future loss housekeeping damages is not included. In this case, not having heard any trial evidence, it is difficult to determine how reasonable or relevant these particular expert reports would have been. As the defendant has agreed to only pay partial indemnity disbursements, and being unable to determine the importance of these reports based only on the submissions of counsel, I decline to allow these two disbursements.
Issue No. 2
16The plaintiff seeks to have an amount of interest, $3,182.34, which she paid to a litigation finance company, allowed as a disbursement in this matter. The plaintiff borrowed a total of $15,425.89 in three separate advances. On these loans, she was charged an effective annual rate of interest of 28.3%.
17There was no evidence provided on this hearing by either party about the financial circumstances of the plaintiff. I take judicial notice of the fact that in personal injury matters in Ontario, plaintiffs often retain their counsel on the basis that no payments are made by them for fees or disbursement until the action is tried or settled. As a practical matter this means that either plaintiff’s counsel pays for and then carries the disbursements until the case is tried or settled or they arrange for the plaintiffs to obtain financing for ongoing payment of disbursements pending trial or settlement.
18The plaintiff relies on a decision of the New Brunswick Court of Appeal in Leblanc v. Doucet 2012 NBCA 88. In that matter, an assessment officer and a justice of the New Brunswick Court of Queen’s Bench had disallowed interest on a litigation loan as an allowable disbursement. A three member panel of the New Brunswick Court of Appeal allowed the plaintiff’s appeal and ordered the defendants to pay the disbursement. There was affidavit evidence before the Court concerning the financial circumstances of the plaintiff including his testimony that he had been turned down by several financial institutions before he was able to obtain a loan which charged interest at 2% per month compounded. The assessment officer found as a matter of fact that the plaintiff did not have the means to finance his action against the defendants.
19The Court considered the application of a particular portion of the disbursement tariff section of the New Brunswick Rules of Court, sub-para 2(14) of Tariff “D” of Rule 59. Plaintiff’s counsel in this case, argued this particular section of the New Brunswick Rules of Court is analogous to Tariff A, Part II, item 35, of the Rules of Civil Procedure which allows any other disbursement reasonably necessary for the conduct of the proceeding.
20Writing for the Court the Chief Justice of the Court, J. Ernest Drapeau wrote at paragraph 35:
35 Without financial assistance from a third party, Mr. LeBlanc would not have been able to enforce his rights in the courts. The loans granted by Seahold Investments were therefore essential to allow Mr. LeBlanc access to justice, which the judge of the Court of Queen's Bench described as a [TRANSLATION] "common law constitutional right" (para. 39).
21I do not accept the reasoning of Justice Drapeau as being applicable to this case. “Access to justice” is a concept that relates to matters between citizens and the state, and not to the creation of express monetary obligations between individual civil litigants. I am unaware of any Canadian legal principle that creates express constitutional obligations between two private parties, absent some specific constitutional provision, federal or provincial legislation or other state action. In this case, it is too much a stretch to equate a section of the Tariffs of the Rules of Civil Procedure to be an indication of a legislative intention to foist obligations of creating and maintaining “access to justice” for individual persons who happen to be involved in litigation with each other.
22The reasoning in Leblanc was considered in Ontario by Lauwers J. (as he then was) in the case Warsh v. Warsh, 2013 ONSC 1886, [2013] O.J. No. 1474. In that case at paragraph 34 he stated:
34 In my view the policy implications of awarding interest on litigation costs as a disbursement are significant and I decline to exercise my discretion to make such an award where the issue has not been properly argued and where a more fulsome policy development process is plainly required.
23I agree with that approach given the evidence before me in this matter.
24Further, in my view, the process and the areas of inquiry engaged in Leblanc were unhelpful for one other reason.
25Costs have a both a common law and a statutory basis. In my view, to also import a constitutional element, expands the issue well beyond its proper intent. It would cause an tremendous increase in the extent to which these issues are disputed, all of which is contrary to the direction given to the Court in the Rules, at Rule 57.01(7) which provides:
(7) The court shall devise and adopt the simplest, least expensive and most expeditious process for fixing costs and, without limiting the generality of the foregoing, costs may be fixed after receiving written submissions, without the attendance of the parties.
26Leblanc was decided based on a factual finding concerning the financial circumstances of the plaintiff. While costs cases do take the reasonable expectations of the parties, typically the losing party, into consideration, encouraging an express inquiry to the ways and means of parties regarding costs, adds an unnecessary degree of complexity to the process leading to a costs determination. Inquiring if particular parties can “afford” to litigate, and creating an obligation for the opposing party to facilitate this would mean that in any civil litigation matter where one party becomes obligated to pay “costs” to another, these costs can include anything that permits the litigant to have “access to justice”. This is a far too nebulous and loosely defined basis to approach the matter of costs.
27In my view, this could be used to attempt to create an obligation to pay any and all types of expenses that permit person to enforce their rights in court. However, Tariff A, Part II, item 35 incorporates a principle of “reasonableness”. Strictly speaking “Access to justice” is an absolute kind of entitlement. It is difficult to reconcile an absolute entitlement with concepts of reasonableness. The legislature has determined to temper the ability of the Court to order disbursements paid to those that are reasonably necessary to pursue the action. Based on the record before me I cannot find that it was reasonable for the plaintiff to expect the defendant to pay interest costs on a litigation loan.
28I, like Lauwers J. (as he then was) in Walsh, decline to exercise my discretion to allow this disbursement.
Issue No. 3
29In this case, the plaintiff has simply added up all the time of all the timekeepers who worked on this file, multiplied it by 60% and presented this as a reasonable amount for partial indemnity fees, in the amount of $26,823.60 plus HST.
30I disagree this is an appropriate methodology for approaching the fixing of partial indemnity costs in this case. I am mindful of the comments of Belobaba J. in Mudford noted above.
31To begin, I wish to comment on the amount of clerk time sought to be recovered by the plaintiff. A review of the docketed entry of the five clerks who worked on this file, reveals that the vast majority of the time entries were for a minimum of “.2”, twelve minutes. Plaintiff’s counsel quite candidly admitted that it was a firm policy that clerks would regularly docket at least this much time as it reflects the fact that changing from one task to another takes up time as much as the particular event which is docketed.
32While this may be something that is appropriate to charge a client directly, it is not an approach that I view as reasonable on this particular matter.
33This was a straightforward case. One lawyer at a time was looking after the file. In my view, many of the entries of the clerks were for work which appeared to be of an administrative nature. These are matters that should be considered as firm overhead and are compensated for in the hourly rate charged by lawyers. Also I agree with the submission of counsel for the defence that the law firm retained by the plaintiff is known for doing personal injury work. This being a relatively straightforward matter, it is difficult to understand how so much time is being requested for what appears to be routine administrative work by support staff.
34In setting the appropriate amount of fees on a partial indemnity basis I have wholly discounted all the clerk time sought by the plaintiffs.
35I then will deal with the claim for time spent by lawyers. The rates requested appear to me to be reasonable. On a strictly mathematical basis, 109.1 hours were spent by the lawyers on this file. This seems to me to be excessive for a relatively straightforward personal injury file where liability was admitted and ultimately the plaintiff accepted $22,500 (net of the deductible) for general damages. The hourly rate of the lawyers ranged from $200 to $250 per hour. This is a full indemnity rate.
36A strictly mathematical approach, multiplying the hours docketed by an average hourly rate of $225 an hour and then multiplying by 60% would yield a fee amount of $14,728.50. In my view, this is an excessive amount based on the complexity of the file and the result achieved.
37The defence argues that partial indemnity costs should be fixed at $10,000.00 plus HST. In my view this is a more reasonable amount taking all the factors of Rule 57 into account and in particular considering the concept of proportionality.
38In all, the defence position regarding partial indemnity costs has been completely accepted by me in this matter. Accordingly, costs shall be fixed and payable by the defendant Guy Collins to the plaintiff Jodina Poile as follows:
Partial indemnity fees $10,000.00 plus HST
Disbursements $15,683.64 inclusive of HST.
39At the close of submissions I asked counsel to give me a rough ballpark estimate of the costs they would be seeking if they were successful on this hearing. Counsel for the defence asked for $200.00. I agree this too is an appropriate amount for costs on this type of hearing given the matters at issue.
40The defendant shall have his costs of the day fixed in the amount of $200.00 plus HST deductible from the amount of partial indemnity costs awarded to the plaintiff as noted above.
________”original signed by”
The Hon. Mr. Justice F.B. Fitzpatrick
Released: February 9, 2015
CITATION: Poile v. Collins, 2015 ONSC 916
COURT FILE NO.: CV-10-0186
DATE: 2015-02-09
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Jodina Poile,
Plaintiff
- and -
Guy Collins,
Defendant
DECISION ON COSTS
Fitzpatrick J.
Released: February 9, 2015
/mls