Court File and Parties

Court File No.: CV-11-428030 Date: 2016-04-18 Superior Court of Justice - Ontario

Re: Intact Insurance Company, Belair Insurance Company Inc., The Nordic Insurance Company of Canada and Trafalgar Insurance Company of Canada, Plaintiffs/Respondents

And:

Assessment Direct Inc., 2171713 Ontario Inc. carrying on business as Assessment Direct, Metro Rehabilitation Centre Inc., Osler Rehabilitation Centre Inc., Alex Smolar, Yan Krivoruk, Abram Zilber, Roman Volfson, Oleg Gavrilenko and Igor Estrah, Defendants/Moving Parties

And:

M.D. Assessment Consult Inc., M.D. Consult Inc., carrying on business as Toronto Regional Pain Management Centre, Danny Grossi, Gladshteyn Psychology Professional Corporation, Ilya Gladshteyn, George Frederick D’Onofrio, Kenneth Roy Keeling, John Doe Corporation, John Doe, Jane Doe and James Doe Doctor, Third Parties

Before: Lederman J.

Counsel: David C. Rosenbaum, for the Plaintiffs/Respondents Richard H. Shekter, for the Defendants/Moving Parties

Heard: Written Submissions

Costs Endorsement

[1] The plaintiffs/respondents, having been successful on this motion, seek $156,437.17 in costs. Their explanation for seeking such an extraordinary amount is as follows:

(a) the moving defendants added needless complexity and duration to the conduct of the motion by moving and later abandoning their motion to strike the claims against the individual defendants;

(b) the moving defendants requested numerous adjournments of the motion which required the plaintiffs to incur substantial costs in connection with such conduct;

(c) the moving defendants continued with the motion to strike the conspiracy claims in face of decisive authority against their position;

(d) Pursuant to Rule 49.13 of the Rules of Civil Procedure, the court should take into account the plaintiffs’ offer to settle (whereby the motion would be dismissed and the moving defendants would pay the plaintiffs’ partial indemnity costs to the date of acceptance of the offer); the moving parties’ conduct justifies an elevated level of costs on a substantial indemnity basis after the date of such an offer.

[2] The numerous adjournment requests were driven by the fact that there were parallel proceedings taking place which might assist in the disposition of the instant motion. There had been conflicting decisions as to whether conspiracy claims could be struck out on the basis of the doctrine of merger. Although a further adjournment had been requested at least until the leave to appeal the Jevco/StateFarm decisions to the Court of Appeal was decided, the adjournment was denied because counsel for the moving defendants were held to abide by their undertaking and agreement to seek no further adjournments after the decisions of the Divisional Court.

[3] In the face of the recent Divisional Court’s judgments in the Jevco/StateFarm cases, counsel for the moving defendants commendably recognized that the decision on this motion would be a foregone conclusion and waived the necessity of oral argument.

[4] It should be emphasized that this was essentially a pleadings motion; and one that was not even argued but rather decided on the written record. The plaintiffs were not in peril of losing their entire claim – only the conspiracy portions.

[5] Similar pleadings issues were litigated in Perth Insurance v. Osler Rehabilitation, 2013 ONSC 2825, Jevco Insurance v. Assessment Direct, 2015 ONSC 7751 and StateFarm Insurance v. Assessment Direct, 2015 ONSC 7774. In Perth, the successful party was awarded $8,000; in Jevco, the Divisional Court awarded the successful plaintiff $5,000; in StateFarm, the companion case to Jevco, an amount of $10,000 was awarded to the successful plaintiff for costs of both the Divisional Court appeal and leave to appeal application. In the same case, the plaintiffs were awarded $3,300 on the original motion.

[6] The aforesaid cases clearly indicate what was reasonable in terms of costs to a successful party on a pleadings motion of this very nature with similar facts and which turned on the narrow legal issue of conspiracy/merger. The amount sought by the plaintiffs is beyond anyone’s imagination let alone within the range of what an unsuccessful party would reasonably expect to pay in relation to such a motion.

[7] The offer to settle did not represent any real compromise on the part of the plaintiffs and is not a factor that comes into play under Rule 49.13 in the exercise of the court’s discretion with respect to costs in this case.

[8] The moving defendants submit that the costs of this motion be fixed in an amount not exceeding $10,000 and I am inclined to agree.

[9] Further, given the shocking amount sought by the plaintiffs, it was reasonable for the moving defendants to incur expense in appropriately responding to the plaintiffs’ request for costs and there should be a discount factor built into the costs award.

[10] As the costs sought by the plaintiffs were completely disproportionate and indeed overreaching, the moving defendants should be permitted a discount of $1,000 for the time and effort in preparing and responding to the plaintiffs’ demand.

[11] The moving defendants have submitted that any costs awarded to the plaintiff should be in the cause. No similar order was made in the parallel cases referred to above and it is not warranted in the circumstances of this motion.

[12] Accordingly, the plaintiffs will have their costs of the motion fixed at $9,000 (taking into account the $1,000 discount) all inclusive, payable by the moving defendants within 30 days.

Lederman J. Date: April 18, 2016