Court File and Parties
Court File No.: 116/08 (Peterborough) Date: 2016-05-17 Superior Court of Justice - Ontario
Re: Zacharia Lane and Alexis Rachel Patricia Koch, Plaintiffs - and - Luke Kock and Mary-Ellen Frances Kock, Defendants
Before: Bale J.
Counsel: Robert Sugar, for the plaintiffs Martin Forget, for the defendants
Heard: October 27, 2015
Endorsement
1This endorsement relates to the costs of an action brought by Zacharia Lane (“Zach”), and Alexis Koch (“Lexie”), for personal injuries sustained at a field party hosted by Luke Kock (“Luke”), at a farm owned by his mother Mary-Ellen Kock (“Mary-Ellen”).
2Following an eleven-week trial, the jury awarded Zach general damages of $20,000, and $8,160 for past loss of income. Lexie was awarded general damages of $30,000. Both sides now claim to be entitled to costs.
Defendants’ offers to settle
The defendants made the following offers to settle:
| Date made | Plaintiff | Amount | Date withdrawn |
|---|---|---|---|
| April 28, 2010 | Lexie Koch | $250,000 plus interest and costs | September 10, 2013 |
| April 28, 2010 | Zach Lane | $175,000 plus interest and costs | September 10, 2013 |
| October 15, 2013 | Alexis Koch | $100,000 plus interest and costs | January 17, 2014 |
| October 15, 2013 | Zach Lane | $50,000 plus interest and costs | January 17, 2014 |
| April 16, 2014 | Lexie Koch | $70,000 (damages and interest); $22,500 (costs); $7,500 (disbursements) – Total $100,000 | |
| April 16, 2014 | Zach Lane | $35,000 (damages and interest); $10,000 (costs); $5,000 (disbursements) – Total $50,000 | |
| May 16, 2014 | Alexis Koch | $200,000 all-inclusive | Open until trial. |
| May 16, 2014 | Zach Lane | $100,000 all-inclusive | Open until trial. |
Plaintiffs’ position
3Zach’s position is that he is entitled to his costs of the action from Luke Kock, on a partial indemnity basis, fixed in the sum of $417,298.
4Lexie’s position is that she is entitled to her costs of the action from Luke Kock, on a partial indemnity basis, fixed in the sum of $404,317. In the alternative, if the offer made to her on May 16, 2014 is found to be as or more favourable to her than the jury verdict, she claims costs to the date of the offer of $107,881.
Defendants’ position
5Mary-Ellen’s position is that the action having been dismissed as against her, she is entitled to costs of $183,290, being 20 per cent of the defendants’ total partial indemnity costs of $916,450.
6Luke’s primary position is that he is entitled to costs of $623,000, being 80 per cent of partial indemnity costs of $779,529, incurred by the defendants subsequent to their offers to settle dated April 28, 2010. In the alternative, his position is that he is entitled to costs of $450,956, being 80 per cent of the costs of $563,695, incurred by the defendants subsequent to their offers to settle dated October 15, 2013. In the further alternative, his position is that he is entitled to costs of $369,962.54, being 80 per cent of the costs of $462,453, incurred by the defendants subsequent to their offers to settle dated May 16, 2014.
Rule 76.13(3) – Simplified procedure (not using) - costs consequences
7When this action was commenced, the simplified procedure applied to claims of $50,000 or less, exclusive of interest and costs. Because the jury verdicts for both plaintiffs were less than $50,000, pursuant to rule 76.13(3), they are not entitled to recover costs, unless the court is satisfied that it was reasonable for them to have commenced and continued the action under the ordinary procedure.
8The defendants’ position is that neither plaintiff ever had a basis to support a claim in excess of $50,000; and that therefore, neither is entitled to costs.
9I disagree. In my view, having heard the evidence at trial, the jury might well have awarded both plaintiffs an amount in excess of $50,000, and it would now be unfair, in hindsight, to say that it was unreasonable for them to make a claim in excess of that amount.
Rule 49.13 – Offers to settle – discretion of court
10Pursuant to rule 49.13, in exercising its discretion with respect to costs, the court may take into account any offer to settle made in writing, the date the offer was made, and the terms of the offer.
11Relying upon this rule, Luke argues that he should recover his costs from the dates of either the April 2010 offers to settle, or the October 2013 offers to settle, on the basis that those offers were more favourable than the jury verdicts, and remained open for most of the time until trial.
12In support of his argument, Luke’s counsel relies upon Thomas (Committee of) v. Bell Helmets Inc., [1999] O.J. No. 4293 (C.A.). In that case, the plaintiffs had made three offers to settle, two of which were revoked prior to trial. In upholding the decision of the trial judge awarding solicitor and client costs from the date of the first offer, the court said the following (at para. 79):
All three of the plaintiffs’ written offers to settle would, if accepted, have resulted in a resolution of this action on terms more favourable to Bell than the trial judgment. There was no time from December 23, 1992, the date of the first offer, to November 20, 1995, when the trial began, when there was not a written plaintiffs’ offer on the table substantially more favourable to Bell than the trial judgment. Thus, throughout that period, it was open to Bell to settle this action by paying substantially less than the judgment required it to pay.
13The decision in Bell is easily distinguished in the present case, because subsequent to September 10, 2013 when the offers of April 28, 2010 were withdrawn, there were no offers on the table more favourable to the plaintiffs than the jury verdict, at least not until the offers of May 16, 2014, which remained open until trial, and are therefore subject to rule 49.10.
14However, although I do not accept Luke’s position that he is entitled to his costs from the dates of either the April 2010 or October 2013 offers to settle, I will consider the April 2010 offers in exercising my discretion with respect to the overall quantum of costs.
Rule 49.10 – Consequences of failure to accept the May 2014 offers
15The defendants argue that the offers made on May 16, 2014 of $200,000 all-inclusive for Lexie, and $100,000 all-inclusive for Zach, were more favourable than the jury verdicts, and that therefore, the plaintiffs costs should be restricted to their costs up to that date, and that Luke is entitled to his costs from that date.
16The plaintiffs concede that the May 16, 2014 offer to settle was more favourable than the jury verdict in favour of Lexie. By their calculation, the value of the offer was $63,371, as compared with Lexie’s recovery of $43,065 (inclusive of interest). However, they argue that I should “order otherwise” under rule 49.10(2), because the offer was “contrary to the purpose and spirit” of Rule 49, was “unreasonably low”, and being all-inclusive, was not sufficiently clear. However, I do not see the offer as unreasonably low, and the case law is clear that “near misses” do not attract favourable cost consequences under rule 49.10. While in my view, all-inclusive offers are not to be encouraged, based upon the plaintiffs’ analysis, I find that the defendants have met the burden of proving that the offer was more favourable than the jury verdict.
17The defendants have not, however, met the burden of proving that the May 16, 2014 offer made to Zach was more favourable than the jury verdict. The share of the plaintiff’ costs claimed by Zach to the date of the offer is $127,014, and although the defendants argue that those costs are excessive, I am not satisfied that they are so excessive as to result in the damages component of the offer being more favourable than the jury verdict, especially considering the prejudgment interest that would have accrued, over the seven years following the date of the accident.
Disposition
18The trial of this action took too long. Each side, of course, blames the other. I am not, however, able to say that one side was more responsible than the other. In order to try an action efficiently, the parties need to cooperate with one another. In this case, it appeared to me that the required cooperation was lacking, and that many of the issues that resulted in a waste of court time could have been resolved, or at least narrowed, before the trial began.
19As a successful plaintiff, Zach claims partial indemnity costs of $417,298 from Luke, based upon an equal split of the plaintiffs’ fees with Lexie. While this amount seems excessive given the jury verdict, the total fees and disbursements incurred by the defendants were roughly equal to those incurred by the plaintiffs, and the defendants were therefore aware of the costs potentially payable to the plaintiffs, in the absence of a successful rule 49.10 offer.
20Taking into consideration the amount that Luke could reasonably expect to pay as the unsuccessful defendant in relation to Zach, the amount claimed and the amount recovered, the defendants April 2010 offer ($175,000 plus interest and costs), the average complexity of the proceeding, and the excessive length of the trial, it is my view that $290,000 represents a reasonable costs award in Zach’s favour.
21Given the success of the defendants’ May 16, 2014 offer to Lexie, she is entitled to her costs from Luke Kock to that date, and he is entitled to his costs from that date, both on a partial indemnity basis. The amount claimed by Lexie is $136,263, being one-half of the partial indemnity fees incurred by the plaintiffs, plus her share of the plaintiffs’ disbursements. The amount claimed by Luke is $369,963, being 80 per cent of the total costs of $462,453, incurred by the defendants subsequent to the date of offer.
22Taking into consideration the amount that Luke and Lexie could reasonably expect to pay in the circumstances of this case, the amount claimed and the amount recovered, the defendants’ April 2010 offer ($250,000 plus interest and costs), the average complexity of the proceeding, and the excessive length of the trial, it is my view that $90,000 represents a reasonable costs award in favour of Lexie, and that $275,000 represents a reasonable costs award in favour of Luke.
23As a wholly successful defendant, Mary-Ellen is entitled to her costs. The defendants calculate their total partial indemnity costs to be $916,450, and argue that she should be awarded 20 per cent of that amount, or $183,290. However, in my view, the inclusion of her in the law suit would not have resulted in additional costs in that amount, and a reasonable award of costs to her would be $80,000, to be paid one-half by Zach, and one-half by Lexie.
24The costs payable by Zach to Mary-Ellen may be set off against the costs payable by Luke to Zach, and the costs payable by Luke to Lexie may be set off against the costs payable by Lexie to Luke. No set-off is available with respect to the costs payable by Lexie to Mary-Ellen.
25Given the divided success, there will be no order as to costs with respect to the preparation for, and attendance on, the costs hearing held in October 2015.
Date: May 17, 2016 “Bale J.”