CITATION: Doran v. Melhado, 2016 ONSC 2010
COURT FILE NO.: CV-09-05628-00
DATE: 2016 03 24
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PATRICK DORAN, personally, and as Litigation Guardian of CAITLIN DORAN, and JANE DORAN
Plaintiffs
- and -
IAN MELHADO
Defendant
COUNSEL:
Stewart C.E. Gillis, for the Plaintiffs
Leon Wickham, for the Defendant
HEARD: January 22, 2016
ENDORSEMENT RE: COSTS AND RULING UNDER S. 178 OF BANKRUPTCY AND INSOLVENCY ACT
EMERY J
[1] The plaintiffs seek two orders from the court to complete the determination of all issues in this action.
[2] First, the plaintiffs seek costs on a substantial indemnity basis in the amount of $128,411.06 against the defendant Ian Melhado. In the alternative, the plaintiffs seek those costs on a partial indemnity scale in the amount of $98,298.56.
[3] Second, the plaintiffs seek the declaration requested in the amended statement of claim that the battery committed against the plaintiff, Patrick Doran, caused “bodily harm intentionally inflicted” within the meaning of Section 178.1(a.1)(i) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. If they are successful, any damages, interest and costs awarded to one or more of the plaintiffs arising out of the action shall survive an order of discharge of bankruptcy should the judgment debtor make an assignment.
[4] For the reasons that follow, I award the costs of the action to the plaintiffs on a partial indemnity basis, fixed in the amount of $65,000 for fees, plus HST and $10,000 for disbursements. I further grant the declaration requested that the damages awarded at trial to the plaintiff Patrick Doran and all costs shall survive any discharge of bankruptcy should the defendant Ian Melhado make an assignment in bankruptcy before such indebtedness is paid.
RELEVANT BACKGROUND
[5] This action first came before me for trial on December 3, 2014. On that date, the plaintiffs brought a motion for summary judgment on notice to the defendant Melhado for a finding of liability. Mr. Melhado did not file a responding affidavit or other evidence in response to the motion for summary judgment.
[6] I granted summary judgment upon finding liability against Mr. Melhado based on the affidavit of Patrick Doran in support of the motion. I also based my decision on the transcript of evidence before Justice Cavion in the Ontario Court of Justice at Mr. Melhado’s trial for assault under section 266 of the Criminal Code on the same facts. Justice Cavion found Mr. Melhado guilty as charged. I relied upon the reasoning of Justice Sharpe in Franco v. White, [2007] O.J. No. 847 (Ont. C.A.) as authority to find there to be no genuine issue requiring a trial to determine liability in this action on the basis of evidence given and findings made on the criminal charges. I also granted summary judgment as a proportionate means to adjudicate that issue for the parties on a timely and affordable basis.
[7] After I delivered my ruling on the motion for summary judgment, the parties held further discussions outside the court. Later that day, counsel filed Minutes of Settlement with respect to damages they agreed upon, and a payment plan for those damages. Paragraph 3 of those Minutes read:
- In the event of default, the action shall forthwith be returned to the Brampton Trial List for a contested damage assessment.
[8] The Minutes of Settlement contemplated that Mr. Melhado pay to the plaintiffs the sum of $18,000 for a full and final settlement. He was to pay the sum of $5,000 by the close of business on December 10, 2014, and the balance of $13,000 payable by December 31, 2014.
[9] Neither amount was paid by the required dates and the action was restored to the trial list for trial on April 9, 2015 for a contested trial on damages. Mr. Melhado brought a motion with respect to the admissibility of medical reports at the same time. My ruling on that motion in his favour was released on May 4, 2015.
[10] The trial proceeded before me on damages between November 17 and 20, 2015, after which I reserved my decision until December 18, 2015. On December 18, 2015, I granted judgment to the plaintiffs against Ian Melhado as follows:
General damages to the plaintiff Patrick Doran in the amount of $30,000;
Damages for Loss of Patrick Doran’s care, guidance and companionship under the Family Law Act in the amount of $2,500 to each Caitlin Doran and Jane Doran;
Damages to OHIP in the amount of $2,016 for its subrogated interest; and
Pre-judgment interest on the damages in paragraphs 1 and 2 under Section 128 of the Courts of Justice Act, since January 1, 2010.
[11] The trial was then adjourned to January 21, 2016 for counsel to argue both costs and the plaintiff’s motion for declaratory relief under section 178 of the Bankruptcy and Insolvency Act. The plaintiff was seeking relief under section 178 of the Bankruptcy and Insolvency Act on the evidence given at trial. That relief had only been requested in an amendment to the Statement of Claim for which I granted leave on a consent basis at the end of trial. I considered it only fair to give the parties the additional time to make submissions on that relief.
COSTS
[12] Generally, costs follow the event in civil actions in Ontario, meaning they are normally awarded to the successful party: Bell Canada v. Olympia and York Developments Ltd. (1994), 1994 239 (ON CA), 17 O.R. (3d) 135 (Ont.C.A.). Ordinarily, those costs are awarded to the successful party on a partial indemnity basis, unless there is good reason recognized at law to award elevated costs on a substantial indemnity or full recovery basis.
[13] Mr. Wickham concedes on behalf of Mr. Melhado that the plaintiffs are entitled to their costs. The only issues are therefore the appropriate scale of those costs, the actual amount the court should award, and considerations with respect to whether those costs should be proportionate to the damages for which judgment has been granted. Mr. Wickham argues that $50,000 would be a fair and reasonable amount to award for costs on a partial indemnity basis.
[14] When called upon to award costs, the court exercises a wide discretion permitted by Section 131(1) of the Courts of Justice Act. However, the opening words of Section 131 make that discretion “subject to the provisions of an Act or rules of court.” Therefore, I shall be giving consideration to the claim for costs of the plaintiffs having regard to any applicable statute, and any relevant provision in the Rules of Civil Procedure.
Appropriate Scale
[15] In Davies v. Clarington (Municipality of), 2009 ONCA 722, the Court of Appeal made a clear statement of principle that elevated costs are warranted in only two circumstances. The first circumstance would arise from the operation of an offer to settle served at least seven days before trial under Rule 49.10 that contains terms that match or exceed the ultimate result. If these conditions are met, the plaintiff is entitled to substantial indemnity costs from the date of the offer, unless the court orders otherwise.
[16] The second circumstance arises where the unsuccessful party in the action has engaged in behaviour worthy of sanction by the court. Elevated costs have been affirmed by the appellate courts in Young v. Young, 1993 34 (SCC), [1993] 4 SCR 3, [1993] SCJ 112 and Mortimer v. Cameron, (1994), 1994 10998 (ON CA), 1993 568, 17 O.R. (3d) 1 [1994] O.J. 277 (Ont.C.A.), as where there has been reprehensible, scandalous or outrageous conduct by an applicable party. The relevant conduct can arise in the facts relative to the cause of action, or in the proceedings themselves, where the court considers it desirable to chastise that party.
[17] Without seeking to add or to or alter the general statements made by the court in Davies v. Clarington (Municipality of) or the cases that precede it, I would add a third circumstance, being that situation when elevated costs are authorized by statute. This additional circumstance is consistent with the opening words of Section 131(1) of the Courts of Justice Act that makes the power and discretion for the use of that power to award costs subject to an Act. In this action, the plaintiffs rely upon Section 4 of the Victims’ Bill of Rights, 1995, S.O. 1995, c.6. Sections 4(1) and (6) of the Victims’ Bill of Rights, 1995, read as follows:
- (1) This section applies to a civil proceeding in which the victim of a crime seeks redress from a person convicted of the crime for harm suffered as a result of the commission of the crime. 1995, c. 6, s. 4 (1).
(6) A judge who makes an order for costs in favour of a victim shall make the order on a solicitor and client basis, unless the judge considers that to do so would not be in the interests of justice. 1995, c. 6, s. 4 (6).
[18] Mr. Wickham argues that the general rule that costs be awarded on a partial indemnity basis should apply in this case. He argues that there was no offer to settle served by the plaintiffs that would serve as a basis for making a costs order under Rule 49.10. I would agree with that submission.
[19] Mr. Wickham also argues that Mr. Melhado did not conduct himself in a reprehensible or egregious manner, either in the facts leading up to the cause of action or in the course of the legal action, to warrant a costs award at an elevated level. I shall take this submission into consideration when making a determination on the plaintiffs’ submissions whether his behaviour was reprehensible and egregious to justify such an award.
[20] Mr. Wickham argues in the alternative that if section 4(6) of the Victims’ Bill of Rights, 1995, should apply, the court should not exercise the power given by subsection 4(6) to order costs on a solicitor and client basis as it would not be in the interests of justice to do so.
[21] I propose to deal first with the plaintiff’s claim for substantial indemnity costs under Section 4 of the Victims’ Bill of Rights, 1995. Mr. Gillis made a persuasive argument for the plaintiffs that Section 4 must be considered within the context of the statute as a whole, and that its preamble sets out the statutory objective for the court to enforce. The preamble reads as follows:
Preamble
The people of Ontario believe that victims of crime, who have suffered harm and whose rights and security have been violated by crime, should be treated with compassion and fairness. The people of Ontario further believe that the justice system should operate in a manner that does not increase the suffering of victims of crime and that does not discourage victims of crime from participating in the justice process.
[22] The court in K.T. v. Vranich, 2011 ONSC 683, involved a university student who was sexually molested by her manager. In that case, the court awarded substantial indemnity costs to the plaintiff under the Act. In K.T. v. Vranich, the court made reference to the preamble of the Act when finding that the cost of litigation should not be borne by someone like K.T.
[128] The preamble to this statute stipulated a long held belief in the administration of justice namely, that the victims of crime, “should be treated with compassion and fairness.” It is believed that the justice system should not operate in a manner that adds to the suffering of such victims.
[23] In this action, Mr. Doran as the victim of a crime was seeking redress from the person convicted of that crime for harm Mr. Doran suffered as a result of the crime committed against him. These ingredients meet the requirements of Section (4)(1) of the Act. Mr. Gillis was emphatic in his submissions that where the section applies, subsection 4(6) contains mandatory language that a judge who makes an order for costs in favour of a victim “shall make the order on a solicitor and client basis”. This statutory imperative is subject only to circumstances where the judge considers that to do so would not be in the interests of justice.
[24] The legislated intent of section 4(6) is to enhance access to justice by victims of crime in the civil context. The preamble to the Act makes that clear. Mr. Melhado was convicted of assaulting Patrick Doran under Section 266 of the Criminal Code of Canada. Now that this court has made a finding of liability and has awarded damages to the plaintiffs, it would seem that the Victims’ Bill of Rights, 1995, and Section 4(6) would apply.
[25] In the present case, the defendant Melhado did not testify or call other evidence at any stage in the action. The court has only the evidence given by the plaintiffs and the other witnesses called by them at trial. While I might have considered factors relating to the exception to Section 4(6) if the defendant had called evidence, there is nothing in the evidence called by the plaintiffs to suggest that an award of costs on a solicitor and client basis would not be in the interests of justice.
[26] I cannot consider the sentence Mr. Melhado received upon conviction at the trial of his criminal charges when determining costs because that factor is not provided as an exception to the mandatory language in Section 4(6). By analogy, I also note Section 4(3) provides that a judge shall not consider the sentence, if any, imposed on a convicted person when ordering that person to pay damages to a victim of the crime committed.
[27] I note that the plaintiffs withdrew their claim for punitive damages during the trial. It cannot be said that Mr. Melhado has already been ordered to pay a higher amount for punitive damages independent of the other damages granted, to preclude an award of costs on a solicitor and client basis against him as a ground to argue that it would not be in the interests of justice.
[28] I am therefore compelled by operation of Section 131(1) of the Courts of Justice Act and Section 4(6) of the Victims’ Bill of Rights, 1995, to make an order for costs on a substantial indemnity basis in favour of the plaintiffs. I do not consider that making an order for costs on this scale would not be in the interests of justice.
[29] I wish to be clear that I consider Mr. Melhado’s behaviour leading up to and forming the evidentiary basis of the cause of action to be reprehensible. However, he has been found liable and he must pay damages to the plaintiffs for the harm he has caused by his acts, words and deeds. I shall be giving reasons later in this endorsement on why the judgment to Patrick Doran and these costs shall survive a discharge from bankruptcy should Mr. Melhado make an assignment. This is a legal effect he shall suffer independently of the damages he caused to the plaintiffs. On the premise that an individual should only be punished once for the same act, I do not consider Mr. Melhado’s behaviour on the night of April 11, 2009 to be part of the reasons for ordering substantial indemnity costs against him.
[30] I also wish to make it clear that I found no reprehensible or egregious conduct on the part of Mr. Melhado or his counsel Mr. Wickham in the course of the legal proceeding itself. In spite of the evidence against him, Mr. Melhado and his counsel conducted themselves with civility and decorum throughout the trial.
Quantum
[31] An overarching principle of general application requires that a costs award must be fair and reasonable. This principle encompasses other considerations for the court. The fixing of costs is not merely a mechanical exercise of reviewing a bill of costs on a line by line basis, or calculating the number of hours claimed by counsel at an applicable rate. It requires the court to take into account all the circumstances to make the result fair and reasonable. In deciding what is fair and reasonable, the expectation of the parties is a relevant factor. This includes a careful consideration of what the unsuccessful party could or should have reasonably expected to pay in costs. These principles emanate from appellate cases such as Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), Moon v. Sher, 2004 39005 (ON CA), [2004] O.J. 4651 (Ont. C.A.), and Davies v. Clarington (Municipality), supra, among others.
[32] The court is called upon to determine what would be a fair and reasonable amount to award the plaintiffs for costs in this case. The court must consider the factors set out in Rule 57.01(1) as guidelines to make this determination. In this way, the amount claimed by the plaintiffs for costs can be tested on objective criteria to determine what amount would be fair and reasonable, and what amount, if any, would not.
Amount Claimed and Amount Recovered
[33] The plaintiff, Patrick Doran, claimed general damages for pain, suffering and loss of enjoyment of life in the amount of $200,000, special damages, damages for past and future loss of income and punitive damages. The plaintiff Jane Doran claimed damages in the amount of $35,000 for the loss of care, guidance and companionship of her husband. The plaintiff Caitlin Doran claimed damages for nervous shock in the amount of $50,000, and damages under the Family Law Act in the amount of $35,000 for the loss of care, guidance and companionship of her father.
[34] The trial proceeded on damages before me on consent of all parties notwithstanding my knowledge of the terms of the Minutes of Settlement. The plaintiffs collectively recovered damages in the amount of $35,000, having abandoned the claim for punitive damages. No evidence was led on Patrick Doran’s past or future loss of income as he is self-employed. I further note that no evidence was given on special damages claimed by Patrick Doran, or general damages for nervous shock and emotional upset claimed by or on behalf of Caitlin Doran.
[35] In my view, the amount recovered is significant notwithstanding the original claims made by the plaintiffs in the statement of claim. The total damages recovered are almost double the amount the defendant agreed to pay in December 2014. I consider the amount of the failed settlement as the baseline to compare with the amount recovered at trial.
Complexity of the Proceeding
[36] This was an action for damages arising from an assault by Mr. Melhado upon the plaintiff Patrick Doran, and dependant relief claims made by the other plaintiffs under the Family Law Act. Despite several court appearances to bring the various claims to judgment, the cause of action was relatively straightforward, as were the respective claims of the plaintiffs in terms of evidence and proof.
Importance of the Issues
[37] It was clear from the evidence given by the plaintiffs at trial on the assessment of damages that the claims made in this action were of significant importance to their lives. This assault not only caused a partial loss of vision in one eye to the plaintiff Patrick Doran and scarring to his face, it also altered his perception of himself and changed his relationship with members of his family. He is no longer the father who actively engaged in family activities. When spending an evening with the family at home, he retires alone to his bedroom early. The assault has deprived him of his confidence to continue with coaching hockey, which was his joy in life as an adult.
[38] The issues were also of great importance to the plaintiffs Jane and Caitlin. Their claims arose from the assault on their husband and father. They went through the legal process seeking damages and recognition for the loss they have experienced as a family.
[39] This action was of great importance to Mr. Melhado as well, but for a different reason. In addition to any remorse he may feel, he owes damages for his conduct and now he must pay costs. This is a legal obligation that likely jeopardizes the financial security for himself and his family for so long as it takes to pay the judgment in full.
Conduct of any party to shorten or lengthen the action
[40] The plaintiffs were justified in bringing the motion for summary judgment at the opening of trial to have the issue of liability determined. This motion should have served as a catalyst to settle and pay damages once and for all. Unfortunately, Mr. Melhado breached the settlement, necessitating the parties to attend before the court in April 2015.
[41] I consider it a credit to the plaintiffs to front-load the trial of the action by bringing the motion for summary judgment that resulted in a finding of liability against the defendant in December 2014. However, Mr. Melhado was substantially successful on the ruling I made after the court appearance in April of 2015. Even though I ordered at the end of that ruling that costs for that motion should be in the cause, if the plaintiffs had called viva voce evidence from the doctors who had examined the plaintiff Patrick Doran as medical experts in April 2015, the trial process would have been shortened and substantial costs saved. I must take all of these considerations into account under this factor during my determination on what costs would be fair and reasonable.
[42] On reviewing the plaintiffs’ costs outline, I observe that Mr. Gillis has provided an itemized account with corresponding time for steps taken since June 21, 2009. I propose to approve or review those itemized steps and corresponding times given on a year by year basis, unless noted otherwise.
[43] I approve the time spent to take instructions, commence the action and investigate the facts of the case set out in the costs outline for 2009 and 2010. I also approve the time taken to prepare the affidavit of documents of the plaintiffs, to organize productions and to prepare for and complete examinations for discovery in 2010 and 2011. I consider the time taken by Mr. Gillis to prepare the pre-trial conference memorandum, to attend at the pre-trial conference and to confer with medical experts to obtain reports and to prepare for trial between 2012 and 2013 to be reasonable.
[44] In October 2013, Mr. Gillis and his office prepared a notice of intention under the Evidence Act and a request to admit, and undertook other steps to prepare for trial and to comply with their professional obligations under the Rules of Civil Procedure before trial. In December 2013, Mr. Gillis also prepared the motion for summary judgment. In January 2014, when this action was initially scheduled for trial, Mr. Gillis incurred significant time and expense to prepare for trial, and engaged in further pre-trial conference procedures.
[45] In December 2014, this matter first came up for trial before me. I find the time of 5.5 hours for preparing for trial and review of the motion for summary judgment is reasonable, and the counsel fee for the motion for summary judgment of 10 hours to be satisfactory. There followed a claim for one hour for drafting the minutes of settlement and attending upon the execution of those minutes to finalize the settlement that would be finalized upon full payment by the defendant in December 2014.
[46] Personnel in Mr. Gillis’ office spent 4 hours in February 2015 to draft a motion record restoring the action for a damages assessment, and a further 2.5 hours to finalize and serve the motion record. I do not consider these amounts and times to be reasonable. Mr. Gillis claims 8 hours to refresh his trial preparation including a review of the defence motion with respect to expert reports. Mr. Gillis claims a further 7 hours to attend at the return of trial to argue the defendant’s motion. An associate in his office also claims 3.5 hours to refresh trial preparation with a review of the defence motion. I do not allow any of these time claims as the plaintiffs were not successful on the ruling.
[47] In November 2015, Mr. Gillis claims 15 hours to refresh his trial preparation once again, which involved a full review of the file regarding evidence to be given at trial. I consider at least half this time to be redundant as the claim for refreshing trial preparation would be similar to the refreshed trial preparation Mr. Gillis had undertaken in April 2015. To award the plaintiffs costs for trial preparation that was not used because medical evidence was not called as required on that occasion should not be rewarded at a later date.
[48] I further consider the 5 hours claimed to prepare a costs outline to be excessive. Further, there is a claim for 3.8 hours on November 17, 2015 for which there is no description. I therefore give no weight to the claim for this time.
Other Considerations
[49] I award Mr. Gillis a counsel fee for the trial on November 18 to 20, 2015 in the amount of $3,500. I also allow the 8 hours claimed by the clerk Kevan Wylie for preparing the draft motion record and affidavit to amend the statement of claim and for the application of Section 178 of the Bankruptcy and Insolvency Act. The 3 hours claimed by Mr. Gillis for attending before the court on December 18, 2015 to argue the application of s.178 to the case on December 18, 2015, and to complete that argument on January 21, 2016 is also approved.
[50] The actual rate for Mr. Gillis shown in the costs outline would appear to be $650 an hour between 2009 and 2016. Mr. Gillis was called to the bar in 1977. I consider this rate to be on the high side, even for counsel with the seniority of Mr. Gillis practicing so close to the City of Toronto. Although the grid in the Rules Committee Report “Information for the Profession” sets out a suggested maximum rate for counsel of 20 or more years at the rate of $300 an hour, sheer gravity should pull the rate Mr. Gillis is charging for costs down to $500 an hour at the substantial indemnity level.
[51] After an overall assessment of what is fair and reasonable and taking into account the factors set out in Rule 57.01(1), the plaintiffs are entitled to costs on a substantial indemnity basis in the amount of $65,000 plus HST for fees. I award a further $10,000 for assessable disbursements, inclusive of HST. I have reduced the claim made by the plaintiffs for disbursements by the amount claimed for the medical report of Dr. Eisenstat, who was not called at trial. Therefore, the cost of Dr. Eisenstat’s report and related HST is disallowed.
PROPORTIONALITY
[52] Now that I have determined the appropriate scale and amount for the costs to award to the plaintiffs, I must consider whether those costs are proportionate to the result obtained. Rule 1.04(1.1) directs that the court shall make orders that are proportionate to the importance and complexity of the issues, and to the amount involved. This raises the question of whether proportionality considerations under Rule 1.04(1.1) apply to the award of costs in this case.
[53] The plaintiffs rely upon the decision of this court in Elmardy v. Toronto Police Services Board et. al., 2015 ONSC 3710. In Elmardy, the plaintiffs were awarded $9,000 for general damages and punitive damages of $18,000, together with various declarations under the Charter of Rights and Freedoms. Notwithstanding the amounts awarded, the court went on to award $60,000 inclusive of fees, disbursements and taxes on a substantial indemnity basis against the defendants, after weighing the factors under Rule 57.01 as a fair and reasonable amount.
[54] In Elmardy, Justice Myers addressed the defendant’s argument that the costs consequences of Rule 76.13 should apply since the plaintiff’s claim was not bought under simplified procedure, and the damages awarded were less than the specified limit. Justice Myers found under all of the circumstances that the costs penalty under Rule 76.13 should not be applied based on access to justice considerations. He found that it is very much in the interests of society that litigants not be dissuaded from bringing claims with merit, particularly where there are formidable barriers to overcome. In his view, Justice Myers found that the plaintiff in Elmardy was reasonable in bringing the case under the ordinary procedure to take him outside the costs consequences under Rule 76.13. Rule 76.13 provides certain costs consequences that includes being deprived of costs or, in the judge’s discretion, being ordered to pay all or part of the defendant’s costs unless the action had proceeded until Rule 76 at the commencement of trial. This argument was not raised by Mr. Wickham on behalf of the Defendant Melhado. I therefore give it no consideration with respect to this action.
[55] It has also been held that proportionality should not automatically serve to reduce the costs to which a plaintiff is entitled simply because of the amount claimed is excessive in relation to the damages awarded. In this regard, I refer to Justice Daley in A & A Steelseal Waterproofing Inc. v. Kalovski, 2010 ONSC 2652 at para. 21:
Further, while costs awarded must be reasonable, it is not the case that the mere fact that costs exceed the damages awarded renders such an award inappropriate: Bonaiuto v. Pilot Insurance Co., 2010 Carswell Ont 1039. As has been stated, the fact that costs significantly exceed the amount at stake, at least in the main action, is regrettable but it is well known to counsel that this is one of the risks involved in pursuing or defending a case. As was noted by Lane J. in 163972 Canada Inc. v. Isacco, [1997] O.J. No. 838: "to reduce the plaintiff's otherwise reasonable costs on this basis would simply encourage the kind of intransigence displayed by the defendants in this case." These words are most apt in the circumstance of this case.
[56] The plaintiffs also referred to Dennie v. Hamilton, (2008) 2008 5964 (ON SC), 89 O.R. (3d) 542 (SCJ) where the court awarded $106,000 to the plaintiff for costs despite the fact that the plaintiffs damages recovered at trial, net of the applicable deductibles under the Insurance Act, amounted to only $20,000. Justice Whalen stated at para. 47 that:
In assessing costs, the court must “stand back and view the result in broad fashion with respect to the impact on all parties, including the defendants, and recognizing too that costs involve a question of access to justice: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634.
[57] Proportionality does not apply to the determination of the costs in this case. Section 131(1) of the Courts of Justice Act provides me with discretion that is subject to the rules of court or any Act. Section 4(6) of the Victims Bill of Rights 1995 mandates that I award costs on a solicitor client or substantial indemnity basis unless it is not in the interests of justice to do so. As I have already found that the interests of justice do not preclude an award of costs on this scale, considerations of proportionality under Rule 1.04(1.1) to reduce the costs award to the plaintiffs in this case are not applicable. Where Section 4(6) of the Act applies, a costs award that enhances access to justice trumps proportionality under the Rules.
SECTION 178 OF THE BANKRUPTCY AND INSOLVENCY ACT
[58] The plaintiffs seek a declaration by the court under Section 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act as a precaution in the event Mr. Melhado makes an assignment in bankruptcy. Section 178(1)(a.1)(i) reads as follows:
178 (1) An order of discharge does not release the bankrupt from
(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
(a.1) any award of damages by a court in civil proceedings in respect of
(i) bodily harm intentionally inflicted, or sexual assault, or
(ii) wrongful death resulting therefrom;
[59] In order to make this declaration, the court must find that the bodily harm for which the plaintiff Patrick Doran was awarded damages by this court was “bodily harm intentionally inflected” for the statute to apply. This essential element and what is required to prove it was discussed by the Court of Appeal in Leighton v. Best, 2015 Carswell (3646) (Ont.C.A.).
[60] In Leighton v. Best, the appeal concerned the judgment from a civil action arising from an assault consisting of a punch thrown by the defendant to the plaintiff in the context of a hockey game. The Court of Appeal upheld the finding of the trial court that one punch was enough to bring the award of damages within the ambit of Section 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act. The Court of Appeal was careful to draw the distinction between an intentional punch, which does not bring the damage award within Section 178(1), and the requirement that the defendant must have also intended for the punch to cause bodily harm. The court reviewed its findings in Dickerson v. 1610396 Ontario Inc. (Casey’s Pub and Grill), 2013 ONCA 653 to trace the development of the law:
[11] Admittedly, the fact that the punch was intentional does not bring the damage award within s. 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act; the respondent must also have intended for the punch to cause bodily harm. Nonetheless, in this case, as inDickerson, the inference that the respondent intended to cause significant bodily harm is inescapable. The respondent pulled off the appellant’s helmet during a recreational hockey game. The force of the punch sent a six feet and two inch tall, 225 pound man to his knees and broke his jaw in three places. These circumstances are substantially similar to the facts in Dickerson. The punch was delivered in retaliation for a high stick by the appellant, which the trial judge found was not deliberate.
[12] Here, as in Dickerson, the motion judge erred in concluding that there was no intent to inflict bodily harm and that the respondent should not have to suffer “this life long penance for what was one punch” and that damages for a single punch in the heat of the moment should not survive bankruptcy. The fact that there was only a single punch does not preclude the finding that the respondent intended to, and did, cause bodily harm to the appellant. An intention to cause significant bodily harm is sufficient to bring the damage award related to that conduct within the exception in s. 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act.
[61] In Dickerson, the court reversed the judge below on finding that it had not been proven that there was intent to inflict bodily harm by holding that:
[44] The evidence in this case established that the appellant was not involved in the fight that broke out between the two groups. He had left the vicinity of the fight and called for police assistance on his cell phone. The respondent, who was physically much bigger than the appellant, ran up to him at this point, and punched him with a closed fist once in the head with sufficient force to cause the appellant to lose consciousness and fall to the ground. In my view, it does not matter whether the appellant’s permanent brain damage resulted from the punch or from the impact of his head against the curb when he fell unconscious to the ground. When one person hits another with a closed fist with sufficient force to cause the unsuspecting recipient of the punch to lose consciousness and fall to the ground, it cannot be seriously doubted that the person intended to inflict bodily harm.
[62] It takes but one lapse in judgment to change a life. I find that Mr. Melhado’s blow caused Mr. Doran bodily harm that was intentionally inflicted because of the events that preceded it:
(1) Caitlin recalls Mr. Melhado calling out to Mr. Doran as he was leaving the hockey banquet that night, “I’m going to f---ing kill you, I can take you any day.”
(2) when Mr. Melhado followed Mr. Doran off the sidewalk and into the parking lot, he flicked his cigarette against the back of Mr. Doran’s head;
(3) when Mr. Doran turned around, Mr. Melhado “horked” on him, expelling a bodily substance from his mouth consisting of spit and perhaps other fluid into Mr. Doran’s face; and
(4) thereafter, Mr. Melhado forcibly struck Mr. Doran on the side of his head with his fist.
[63] I can only conclude when these events are viewed in sequence and as a whole, that Mr. Melhado intentionally inflicted the bodily harm he caused to Mr. Doran when he “sucker punched” him that night. Each act built on the taunt Mr. Melhado first made, and coalesced into his intention to harm Mr. Doran. Mr. Melhado manifested this intention by adding injury to the insults he had directed at Mr. Doran. These events count as evidence of, or provide the basis to infer, an intention to inflict bodily harm that brings Mr. Melhado within the reach of section 178.
[64] I therefore grant the relief requested in the amendment to the statement of claim. A declaration is made that an order of discharge shall not release Ian Melhado from the damages awarded by this court to the plaintiff Patrick Doran. I consider the award of costs I have made to the plaintiffs to be directly related and arising from the civil proceedings in respect of bodily harm intentionally inflicted, and the declaration extends to and includes all prejudgement interest on the damages awarded to Patrick Doran and the costs awarded herein.
[65] This declaration does not extend to those damages granted to Jane Doran or Caitlin Doran. Those damages were not damages for bodily harm. They were each awarded damages for a derivative claim made under provincial legislation that is not contemplated under Section 178 of the Bankruptcy and Insolvency Act.
EMERY J.
Released: March 24, 2016
CITATION: Doran v. Melhado, 2016 ONSC 2010
COURT FILE NO.: CV-09-05628-00
DATE: 2016 03 24
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PATRICK DORAN, personally, and as Litigation Guardian of CAITLIN DORAN, and JANE DORAN
Plaintiffs
- and -
IAN MELHADO
Defendant
ENDORSEMENT RE: COSTS AND RULING UNDER S. 178 OF BANKRUPTCY AND INSOLVENCY ACT
EMERY J
Released: March 24, 2016