Court File and Parties
COURT FILE NO.: 11-4741-SR DATE: 2016-05-31 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: B-W Feed & Seed Ltd. Plaintiff
- and – Zehr Transport Ltd., Michael Leslie Pullen and Stargate Manufacturing Inc. Defendants
AND BETWEEN: Zehr Transport Ltd. Plaintiff
- and – Transit Trailer Limited and Stargate Manufacturing Inc. Defendants
- and – B-W Feed & Seed Ltd. Third Party
Counsel: Nolan Downer, Counsel for the Plaintiff B-W Feed & Seed Ltd. Stuart R. MacKay, Counsel for the Defendants Zehr Transport and Michael Pullen Stuart R. Mackay, Counsel for the Plaintiff, Zehr Transport Ltd. Sean Brennan, Counsel for the Defendant Transit Trailer Limited Sarah L. G. Pottle, Counsel for the Defendant Stargate Manufacturing Sandra Monardo, Counsel for the Third Party B-W Feed & Seed Ltd.
HEARD: By Written Submissions
THE HONOURABLE MR. JUSTICE P.B. HAMBLY
RULING ON COSTS
[1] The facts are set out in my judgment dated April 21, 2016. I will refer to them only as may be necessary to support this ruling.
1. Motion for Summary Judgment by Third Party BWFS dismissing Third Party Claim By Defendant Stargate
Costs Claimed
[2] This is the motion brought by the Third Party BWFS against the defendant Stargate in the Stargate third party action which was granted. In its revised bill of costs dated April 26, 2016, BWFS shows total partial indemnity fees of $34,342.96, substantial indemnity fees of $49,390.61 and full indemnity fees of $64,287.96, including HST. It shows disbursements of $5,208.40, including HST. Adding the disbursements to the fees, including HST, results in figures of $39,551.36 for partial indemnity costs, $54,509.40 for substantial indemnity costs and $69,496.36 for full indemnity costs. BWFS claims partial indemnity costs of $3,000 prior to February 7, 2013 and substantial indemnity costs thereafter in the amount of $50,804.75. I assume that the first figure does not include HST and disbursements and the latter figure does include these amounts.
[3] Stargate submits that BWFS should have no costs or reduced costs and that BWFS should pay costs to it of $1,500. After the hearing of the motion I directed that the parties file further written submissions on the industry practice issue. BWFS wanted this evidence excluded. Stargate wanted it admitted. I decided that it should be admitted. Stargate filed a costs outline. It would claim $1,519.80 on a partial indemnity basis and $2,072.20 on a full indemnity basis for this work. In its revised bill of costs, BWFS claims $2,387.25 on a partial indemnity basis and $3,580.89 on a substantial indemnity basis for this work. These figures do not include HST or disbursements. Based on its costs outline, Stargate would claim for fees including HST $22,245.98 on a partial indemnity basis and $30,446.40 on a substantial basis. Its disbursements are $4,126.70, including HST. Hence, including HST it would claim $26,372.68 on a partial indemnity basis and $34,573.10 on a substantial indemnity basis, including disbursements and HST. This includes both the motion for summary judgment brought by BWFS against Stargate in the BWFS action on which Stargate was successful and this motion for summary judgment brought by BWFS to dismiss the third party action in the Stargate third party action on which it was unsuccessful.
BWFS Offers
[4] Stargate commenced the third party claim against BWFS on July 25, 2012. BWFS filed a statement of defence dated January 30, 2013. BWFS offered to consent to the dismissal of the third party claim without costs on February 7, 2013 and May 2, 2013, if the dismissal took place before examinations for discovery. It offered to consent to dismissal of the third party claim without costs on November 8, 2013, after examinations for discovery had taken place, provided the dismissal took place prior to its preparation of its summary judgment motion. BWFS, as third party, delivered its motion record for the summary judgment motion in July 2014. The hearing of the motion was originally scheduled for November 2015 but was not reached. The motion was heard on February 23 and 29, 2016.
Legislation
Courts of Justice Act
[5] 131.--(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.
Rules of Civil Procedure
[6] 1.03 (1) In these rules, unless the context requires otherwise,
"substantial indemnity costs" mean costs awarded in an amount that is 1.5 times what would otherwise be awarded in accordance with Part I of Tariff A, and "on a substantial indemnity basis" has a corresponding meaning.
Plaintiff’s Offer
Where an offer to settle,
(a) is made by a plaintiff at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the defendant,
and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to party and party costs to the date the offer to settle was served and solicitor and client costs from that date, unless the court orders otherwise.
Defendant's Offer
(2) Where an offer to settle,
(a) is made by a defendant at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the plaintiff,
and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to party and party costs to the date the offer was served and the defendant is entitled to party and party costs from that date, unless the court orders otherwise.
49.13 Notwithstanding rules 49.03, 49.10 and 49.11, the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer.
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party's denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
Costs Against Successful Party
(2) The fact that a party is successful in a proceeding or a step in a proceeding does not prevent the court from awarding costs against the party in a proper case.
Fixing Costs: Tariffs
(3) When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs.
Assessment in Exceptional Cases
(3.1) Despite subrule (3), in an exceptional case the court may refer costs for assessment under Rule 58.
Authority of Court
(4) Nothing in this rule or rules 57.02 to 57.07 affects the authority of the court under section 131 of the Courts of Justice Act,
(a) to award or refuse costs in respect of a particular issue or part of a proceeding;
(b) to award a percentage of assessed costs or award assessed costs up to or from a particular stage of a proceeding;
(c) to award all or part of the costs on a substantial indemnity basis;
(d) to award costs in an amount that represents full indemnity; or
(e) to award costs to a party acting in person.
Bill of Costs
(5) After a trial, the hearing of a motion that disposes of a proceeding or the hearing of an application, a party who is awarded costs shall serve a bill of costs (Form 57A) on the other parties and shall file it, with proof of service.
Costs Outline
(6) Unless the parties have agreed on the costs that it would be appropriate to award for a step in a proceeding, every party who intends to seek costs for that step shall give to every other party involved in the same step, and bring to the hearing, a costs outline (Form 57B) not exceeding three pages in length.
Process for Fixing Costs
(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.
Whether BWFS is entitled to substantial indemnity costs
[7] BWFS relies on the decision of the Court of Appeal in the judgment of Justice Carthy in S. and A. Strasser v. Richmond Hill, [1990] O.J. No. 2221. In that case the plaintiff claimed $1 million in its statement of claim which it reduced to $70,000 prior to trial. The defendants filed an offer to settle for $30,000 after discoveries but prior to trial. The trial judge dismissed the plaintiff’s claim. He awarded the defendant solicitor and client costs from the commencement of the action. The plaintiff appealed the costs awarded. Regarding Rule 49.10 Justice Carthy stated the following:
4 At first glance it seems an anomaly that the plaintiff should be awarded solicitor-and-client costs following the date of an offer, while the defendant only receives party-and-party costs. The answer is found in appreciating that this rule assumes that the plaintiff has recovered a judgment of some value. Without the rule, that plaintiff would normally recover party-and-party costs. The rule gives that plaintiff a bonus for an offer lower than the recovery by elevating costs to the solicitor-and- client level following the offer. The bonus to a defendant who makes an offer higher than the recovery is that the defendant pays no costs following the offer and, in addition, recovers party-and-party costs for that period of time. That rationale does not fit a case where the plaintiff is totally unsuccessful because, without the rule, the defendant is normally entitled to party-and-party costs. The words in the rule "and the plaintiff obtains a judgment as favourable" make it clear that the rule has no application where the plaintiff fails to recover any judgment.
6 The trial judge appears to have followed that suggestion (to award solicitor and client costs pursuant to rule 49.13) and awarded solicitor-and-client costs from the beginning of the action. The application of rule 49.13 to these circumstances gives me some concern because it seems tailored to permit consideration of offers that do not quite meet the requirements of the earlier rules rather than to fill in gaps in those rules. However, the general language of rule 57.01 [am. O. Reg. 786/84, s. 10], defining the principles for the award of costs, leaves no doubt as to the ambit of discretion. It reads in part [rule 57.01(1)]:
... the court may consider, in addition to the result in the proceeding and any offer to settle made in writing ...
9 We heard the submissions of counsel for the defendant as to why this case did justify solicitor-and-client costs on general principles, but I cannot see anything identifying a reason for an expression of the court's disapproval of the plaintiff's conduct…
11 However, I do see reason for a bonus in making an offer of $30,000 in the face of a claim which subsequently reduced itself to $70,000 and resulted in a dismissal of the action. That bonus should be related to the offer and its date and, based upon the general principles enunciated in rule 57.01, I would award solicitor-and-client costs to the defendant following the date of the offer and party-and-party costs up to that date.
[8] Stargate submits that the Court of Appeal has modified its reasoning in Strasser. In Iannarella v. Corbertt, 2015 ONCA 110, [2015] O.J. No. 726, the plaintiffs suffered serious injuries in a motor vehicle accident when their vehicle was struck from the rear. The jury found no liability on the defendants and dismissed the plaintiffs’ action. It assessed the general damages of the plaintiffs at $32,000 and their past income loss at $40,591. The Court of Appeal in the judgment of Justice Lauwers found that the trial judge had made serious errors on evidentiary issues and in instructing the jury on liability. He found that the defendants were liable for the damages of the plaintiffs. He ordered a new trial on damages.
[9] The defendants had made a substantial offer to settle shortly before the commencement of the trial. The trial judge followed the reasoning in Strasser in awarding the defendants partial indemnity costs prior to the offer and substantial indemnity costs thereafter. The trial took 15 days. The costs award was $255,000. The trial judge ignored evidence that the sole asset of the plaintiffs was their house and that they were nearing retirement.
[10] Regarding the costs award Justice Lauwers stated the following:
137 Since the appeal is to be allowed, the costs disposition is to be set aside. I do, however, wish to make several observations about the trial judge's costs disposition. The action was dismissed, and the defendants would ordinarily be entitled to no more than costs on a partial indemnity basis. But the costs award on a substantial indemnity basis was distinctly punitive to the appellants, who stand to lose their home.
138 The trial judge stated that he was exercising his discretion under this court's decision in S.& A. Strasser Ltd. v. Richmond Hill (Town) (1990), 1 O.R. (3d) 243 (C.A.). In that case the court cited rule 49.13, which provides that notwithstanding rule 49.10, in assessing costs a court "may take into account any offer to settle made in writing."
139 The development of this court's approach to awards of substantial indemnity costs has evolved since Strasser, as this court noted in Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66. Outside of rule 49.10, to make such an award as a matter of judicial discretion the court must find that the party has been guilty of egregious misconduct in the proceeding. See St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, at para. 92 and McBride Metal Fabricating Corp. v. H. & W. Sales Co. (2002), 59 O.R. (3d) 97 (C.A), at para. 39. I can see no basis in this case on which the trial judge could have found such misconduct on the appellants' part.
140 Moreover, the trial judge did not take into account the respondents' breaches of the Rules, which should have attracted countervailing weight in the fixing of the trial costs: see Capela and Beland.
He ordered the costs of the new trial to the plaintiffs in the cause.
[11] In Davies v, Clarington, 2009 ONCA 722, [2009] O.J. No. 4236, after a lengthy trial with multiple parties and multiple claims and cross claims the parties settled. It was agreed that the settling defendants were liable to pay the costs of Blue Circle. Prior to trial, Blue Circle had offered to settle by way of dismissal of the claims against it without costs. The trial judge followed Stasser and awarded Blue Circle party and party costs to the date of the offer and solicitor client costs thereafter. The total costs award was $509,452. The settling defendants appealed. The Court of Appeal in the judgment of Justice Epstein noted at the outset the following:
1 … The award is notable not only for its considerable quantum, but also for the trial judge's decision to fix a large portion of the costs on a full indemnity basis absent a finding of sanction-worthy conduct on the part of the party against which the cost order was made. Specifically, full indemnity costs were ordered for the period following the delivery of an offer to settle the claims of the plaintiff and other defendants on a without-costs basis.
[12] She held that Blue Circle was entitled to partial indemnity costs only, which she fixed at $300,000 plus disbursements and GST. She stated the following:
28 The first issue is whether the trial judge erred in relying on the February 2005 offer as justification for an elevated costs award. This court, following the principle established by the Supreme Court, has repeatedly said that 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.
[13] She referred to the case of Scapillati v. A. Potvin Construction Ltd. (1999), 44 O.R. (3d) 737 where the Court of Appeal in the judgment of Justice Austin considered Strasser. She stated the following:
38 On appeal, this court started its analysis of the defendant's appeal of the costs award by observing, once again, that as the plaintiff's claim had failed, rule 49.10 had no application. Then, at p. 750, turning to Strasser, Austin J.A. had this to say:
[T]he principle upon which solicitor and client costs were awarded in Strasser is a very narrow one. The plaintiff had made a claim for $1 million, the defendant made an offer after discovery of $30,000 and the action was dismissed at trial. In the instant case, no similar offer was made. While the trial judge in the instant case made an award of solicitor and client costs, it does not appear from the record that she felt as strongly about it as the trial judge in Strasser who said "I think this case, in these circumstances, screams for solicitor and client costs."
39 Thus interpreting Strasser as a case where egregious conduct was implicitly found, this court allowed the appeal as to costs, set aside the original costs award and substituted an award of costs on a party-and-party basis….
40 In summary, while fixing costs is a discretionary exercise, attracting a high level of deference, it must be on a principled basis. The judicial discretion under rules 49.13 and 57.01 is not so broad as to permit a fundamental change to the law that governs the award of an elevated level of costs. Apart from the operation of rule 49.10, elevated costs should only be awarded on a clear finding of reprehensible conduct on the part of the party against which the cost award is being made. As Austin J.A. established in Scapillati, Strasser should be interpreted to fit within this framework - as a case where the trial judge implicitly found such egregious behaviour, deserving of sanction.
[14] She referred to the factors that should guide a court in fixing costs that are fair and reasonable as follows:
51 In Andersen v. St. Jude Medical Inc. (2006), 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): Boucher, Moon, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 75 O.R. (3d) 638 (C.A.).
- 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: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4.
- 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 avoid inconsistency with comparable awards in other cases. "Like cases, [if they can be found], should conclude with like substantive results": Murano v. Bank of Montreal (1998), 41 O.R. (3d) 222 (C.A.), at p. 249.
- The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.
52 As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher, this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said "[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice."
Whether BWFS should be denied costs because the Motions Judge allowed its motion for summary judgment by reason of his finding that BWFS did not owe a duty of care to Stargate or should have reduced costs because of divided success on its motion.
[15] Zehr sued Stargate and Transit for its losses resulting from its trailer tipping over while Pullen was dumping its load of feed into the bin on the premises of BWFS. Stargate alleged in its third party claim that if it was liable for the losses of Zehr that BWFS was liable to it for those losses. It alleged negligence at common law and under the Occupiers' Liability Act against BWFS. The basis of its claim was that the unloading area for the pit where Pullen dumped the load from Zehr’s trailer was on a slope. This placed Zehr’s trailer in jeopardy when Pullen dumped its load. BWFS, in its statement of defence to the third party claim, denied that it was negligent in relation to Zehr. I held the following:
16 Stargate asserts that BWFS had a duty as an occupier to provide a level surface at the base of its ramp for trucks to dump feed into the pit. In my view, if BWFS had such a duty it was owed to Zehr and not to Stargate. It was Zehr, and not Stargate, which sent Pullen with its tractor trailer to BWFS at the invitation of BWFS to dump feed.
[16] Stargate’s position is that because BWFS did not raise the issue of whether Stargate owed it a duty of care in its factum filed on the motion that it should receive no costs and that Stargate should receive costs on the industry practice issue on which it was successful. If BWFS is awarded costs it should be at a reduced scale because of this factor and because it was unsuccessful on the industry practice issue.
[17] The position of BWFS is set out in its Reply Costs Submissions as follows:
- BWFS as third party submits that there was only one issue before the Court for determination, namely whether there was a genuine issue requiring trial for the third party claim. There was no separate relief sought or other issues outlined in the notice of motion that affected the outcome of the litigation.
- Arbour J. in Tricontinental Investments Co. v. Guarantee Co. of North America [1988] O.J. No. 2811 at para. 2. defined an issue as “that which, if decided in favour of the plaintiff, will in itself give a right to relief, or would, but for some other consideration, in itself give a right to relief; and if decided in favour of the defendant will in itself be a defence.
- Having succeeded in defeating the third party claim, BWFS as third party achieved total success and would be entitled to its costs of the action.
[18] In Scarborough Hospital v. Schiller (1975), 9 O.R. (2d) 648 the Court of Appeal in the judgment of Chief Justice Gale held that each party should pay its own costs, where it dismissed an appeal on the grounds of lack of jurisdiction, which the court raised itself at the commencement of argument of the appeal. In Pittman Estate v. Bain, [1994] O.J. No. 3410 Justice Lang found that the plaintiffs and defendants both had success on multiple issues over a 91 day trial. She awarded the plaintiffs 60% of their costs apportioned among three defendants.
[19] BWFS in its factum cited the case of Ryan v. City of Victoria, [1999] 1 S.C.R. 201. In that case, the plaintiff suffered injuries when his motorcycle went out of control after catching a tire in railroad tracks which ran down the middle of a street in Victoria. At issue was whether the railway owed a duty of care to the public apart from its statutory duty. The Supreme Court of Canada in the judgment of Justice Major stated the following;
21 The first step in the negligence analysis is to determine whether the Railways owed a duty of care to the appellant with regard to the configuration of the Store Street tracks. If such a duty is found to exist, it must then be determined whether the Railways exercised the standard of care necessary to avoid breaching that duty….
22 The duty of care owed by a railway with respect to public crossings is determined, as it is for other private and public actors, under the two-step test in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), at pp. 751-52, which was adopted by this Court in Kamloops (City of) v. Nielsen, [1984] 2 S.C.R. 2, and numerous subsequent decisions. See, e.g., Just v. British Columbia, [1989] 2 S.C.R. 1228; Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165. The two stages of the test were restated by Wilson J. as follows in Kamloops, at pp. 10-11:
(1) is there a sufficiently close relationship between the parties (the [defendant] and the person who has suffered the damage) so that, in the reasonable contemplation of the [defendant], carelessness on its part might cause damage to that person? If so,
(2) are there any considerations which ought to negative or limit (a) the scope of the duty and (b) the class of persons to whom it is owed or (c) the damages to which a breach of it may give rise?
23 The first step of the Anns/Kamloops test presents a relatively low threshold. In order to establish a prima facie duty of care, it must be shown that a relationship of "proximity" existed between the parties such that it was reasonably foreseeable that a careless act by the Railways could result in injury to the appellant.
[20] It was Zehr which, through Pullen, brought its trailer on the premises of BWFS. Stargate was the manufacturer of the trailer. I am of the view that BWFS did not owe a duty of care to Stargate.
Late Delivery by BWFS of the Second Rochon Report
[21] Stargate submits that the costs of BWFS should be reduced because of its late delivery of the second Rochon report. The first Rochon report is dated March 7, 2011. The first Giffen Koerth report is dated June 6, 2011. The second Rochon report dated February 10, 2016 was obtained by BWFS. The second Giffen Koerth report in response to it dated February 12, 2016 was obtained by Stargate. The motions were heard on February 23 and 29, 2016. These last two reports were served and supplementary motion records and factums provided in relation to them and were placed before me at the hearing of the motions. Stargate, notwithstanding that it had the second Giffen Koerth report in response to it, objected to the admission into evidence of the second Rochon report because of its late delivery. I ruled against Stargate and admitted both reports. Stargate’s objection to the admission of the second Rochon report was not well founded. Its admission into evidence would cause Stargate no prejudice since it had the second Giffen Koerth report in response to it. I appreciate that counsel for Stargate was placed under considerable pressure by the late delivery of the second Rochon report to respond to it in time for the hearing of the motions. However, this is not a factor that should affect an award of costs to BWFS.
Analysis
[22] As Ryan makes clear, any consideration of a claim of negligence must commence with consideration of whether the alleged tortfeasor is in sufficient proximity to the party who has suffered damages to owe that party a duty of care. I found that BWFS did not owe a duty of care to Stargate. It was not Stargate which came onto the premises of BWFS. It was Zehr’s trailer, pulled by a tractor driven by Pullen, who worked for Zehr that came onto the premises of BWFS at the invitation of BWFS. It was Zehr and not Stargate to which BWFS, which is the occupier, owed a duty of care.
[23] I dismissed Stargate’s third party action against BWFS because I found that BWFS did not owe a duty of care to Stargate. Because BWFS focused its submissions on whether it was negligent rather than whether it owed a duty of care to Stargate is not a reason to deny BWFS its costs when it was successful on its motion. This is not at all analogous to Scarborough Hospital where the Court of Appeal held that it had no jurisdiction to hear the appeal and dismissed the appeal without costs for that reason. There is no suggestion that this court did not have jurisdiction to hear the summary judgment motion of BWFS. The industry practice issue was a minor evidentiary issue on which Stargate was successful. Stargate won a minor skirmish, but it lost the war. This is not a significant factor in the amount of costs to which BWFS, as the successful party, is entitled.
[24] There was no misconduct by Stargate which would justify an award of substantial indemnity costs against it. Indeed, there was no misconduct by Stargate or its counsel. She filed useful material, made helpful submissions, although I disagreed with them, and was courteous at all times.
[25] The factors to consider in applying Rule 57.01 to determine an award of costs that is fair and reasonable are the principle of indemnity, the amount of costs that the unsuccessful party, namely Stargate, could expect to pay as reflected in its costs outline, the complexity of the proceedings and the importance of the issues.
[26] The revised bill of costs of BWFS show 8 lawyers, 2 students and 1 law clerk worked on the case. They collectively spent 276.7 hours on the case. This translates to 3 hours short of 7 weeks at 40 hours per week. This contrasts with the costs outline of Stargate, which shows 5 lawyers and 1 law clerk spent a total of 130.1 hours on both of the motions brought by BWFS. This translates to 3¼ weeks and is less than half the time spent by the law firm which represented BWFS on the third party motion alone.
[27] In Tri-S Investments v. Vong, [1991] O.J. No. 2292, Justice Feldman (as she then was) stated the following:
A judge's function in fixing costs (as contrasted with the role of an assessment officer on a full assessment) is to perform a summary analysis of the cost of the services of counsel for the successful party, then to apply the party/party scale of indemnification to that figure. The purpose of the summary analysis is for the trial or motions judge, familiar with the nature of the proceeding as well as with its substantive and procedural complexity, to ensure that the magnitude of the claimed costs is in keeping with what is warranted in the circumstances. I do not view it to be the court's function when fixing costs to second-guess successful counsel on the amount of time that should or could have been spent to achieve the same result, unless the time spent is so grossly excessive as to be obvious overkill.
[28] The issues were of considerable legal and factual complexity and the outcome was important to the parties. I do think that there was overkill in the work put into the case by the law firm that represented BWFS. The written material produced and the oral submissions were very good although the case was not decided on a point emphasized by counsel.
Result
[29] I fix costs to be paid by Stargate to BWFS at $25,000 for fees on a partial indemnity scale, HST of $3,250 and disbursements of $5,208, including HST, for a total of $33,458, including HST and disbursements to be paid with 30 days.
2. Motion for Summary Judgment by Plaintiff BWFS Against Defendant Stargate
[30] This is the motion brought by BWFS in the BWFS action against Stargate which was dismissed. Having been successful on the motion, Stargate seeks its costs on a partial indemnity scale against BWFS. For the total work required to respond to the summary judgment motions brought by BWFS – one in a successful claim to have the Stargate third party action dismissed and the second in an unsuccessful claim for judgment in the BWFS action – Stargate filed a single bill of costs, attached to its responding costs submissions, on the motion by BWFS to have the Stargate third party action dismissed. It relies on this costs outline for its claim for costs on its successful defence of the claim by BWFS against it in the BWFS action.
[31] BWFS as plaintiff did not file a factum in support of its summary judgment motion against Stargate in the BWFS action. The two actions were consolidated. The three motions were heard together. At the hearing of the motions BWFS relied on its factum, filed on its motion in the Stargate third party action, to dismiss the third party claim against it. After the hearing of the motion at my request it did file a factum in support of its claim for summary judgment in the BWFS action.
[32] In its costs outline, Stargate makes the following claim:
| Partial Indemnity | Substantial Indemnity | |
|---|---|---|
| Fees Incurred (re: motion) | $19,686.75 | $26,943.72 |
| H.S.T. on Fees | $ 2,559.23 | $ 3,502.68 |
| Disbursements incurred (re: motion) | $ 4,126.70 | $ 4,126.70 |
| Subtotal | $26,372.68 | $34,573.10 |
It seeks one half of its partial indemnity costs in the amount of $13,186.34 for its successful defence of the claim by BWFS for judgment in the BWFS action.
[33] As I noted above, Stargate shows 5 lawyers and 1 law clerk spent a total of 130.1 hours on the defence of both of the claims of BWFS. Having been successful on one and unsuccessful on the other it seeks one half its costs on the one on which it was successful.
[34] BWFS submits that the focus of Stargate was on the motion by BWFS as third party to dismiss the Stargate third party action and that its factums – one dated January 19, 2015 and the second dated February 17, 2016 – dealt primarily with the issues in the motion for summary judgment of BWFS in the Stargate third party action. It submits that BWFS as plaintiff “ ‘piggy backed’ off of BW Feed as Third Party’s motion for summary judgment.” It submits that Stargate should have no costs.
[35] I disagree. I held in para. 19 of my judgment that the expert reports “raise(s) the issues of whether the tipping of the trailer resulted solely as a result of the negligence of Stargate, solely as a result of the negligence of BWFS or as a result of their combined negligence.” Stargate addressed this in its factums and oral submissions.
[36] The factors in Rule 57.01 that are relevant are the principle of indemnity, the amount which the unsuccessful party could expect to pay as reflected in the bill of costs filed by BWFS in its summary judgment motion in the Stargate third party action, the amount claimed by BWFS in its action, albeit being $50,000, as compared to $300,000 claimed by Zehr in its action, the importance to the parties, the complexity of the issues and the conduct of BWFS as plaintiff in failing to file a factum prior to the hearing of the motions. BWFS did not file a costs outline for its work as plaintiff on this motion.
Result
[37] BWFS, as plaintiff, brought a summary judgment motion against Stargate which was dismissed. Stargate is entitled to its costs on a partial indemnity scale. In my view, the amount that it claims is fair and reasonable. BWFS shall pay Stargate its costs fixed at $13,186.34 within 30 days.
3. Motion by Transit to Dismiss Claim Brought Against it by Zehr
[38] Zehr purchased the trailer from Transit, which was pulled by a tractor driven by Pullen, that tipped over at the premises of BWFS. Zehr sued Stargate which manufactured the trailer and Transit. Transit brought a summary judgment motion to dismiss Zehr’s action, which I dismissed. Zehr sued Transit for breach of contract, breach of warranty and negligence. I held that there were triable issues on each of these grounds based on the facts and the law. I did not identify any credibility issues. Zehr requests costs on a partial indemnity scale of $13,159.30, consisting of fees of $10,009.99, disbursements of $1,635.40 and HST of $1513.91.
[39] Transit submits that the dismissal of its motion was a “close call”. It submits that I should fix costs and order that costs be in the cause, as was done in Marini v. Muller, [2001] O.J. No. 259 and Greer v. Homer, [2009] O.J. No. 3093. In the event that Transit is successful at trial in having Zehr’s claim against it dismissed, this would result in Transit receiving its costs of this motion. I do not agree that this approach should be followed in this case. I agree with Zehr that the dismissal of Transit’s motion was not a close call. Zeher is entitled to its costs.
[40] Zehr has filed a bill of costs which shows that 2 lawyers, 2 law clerks and 1 law student spent 68.4 hours on the case prior to the hearing of the motion. Mr. S. Flaherty, who appeared on the motion, claims an additional 12 hours for the 2 days that he spent in court, including the first day when the motion was not reached. This amount of time is considerably less than the 130 hours spent by the legal personnel who worked for Stargate. Albeit Stargate was responding to 2 motions with issues that were more complex.
[41] Transit states in its factum that it charged its client $10,000 on a full indemnity basis. I agree with Zehr that this bald statement is not helpful. It is the time that the lawyers and their support staff who were working for Transit as the losing party that is relevant. Transit did not file a costs outline which would disclose this. In Risorto v. State Farm, [2003] O.J. No. 990 Justice Winkler (as he then was) stated the following:
[10] The attack on the quantum of costs, insofar as the allegations of excess are concerned, in the present circumstances is no [page139] more than an attack in the air. I note that State Farm has not put the dockets of its counsel before the court in support of its submission. Although such information is not required under Rule 57 in its present form, and the rule enumerates certain factors which would have to be considered in exercising the discretion with respect to the fixing of costs in any event, it might still provide some useful context for the process if the court had before it the bills of all counsel when allegations of excess and "unwarranted over-lawyering" are made. In that regard, the court is also entitled to consider "any other matter relevant to the question of costs". (See rule 57.01(1)(i).) In my view, the relative expenditures, at least in terms of time, by adversaries on opposite sides of a motion, while not conclusive as to the appropriate award of costs, is still, nonetheless, a relevant consideration where there is an allegation of excess in respect of a particular matter. (see also the decision of the Court of Appeal in Smith Estate v. Rotstein, 2011 ONCA 491, [2011] O.J. No. 3075 at paras. 50-51)
[42] Taking into account the factors in Rule 57.01 of the principle of indemnity, the amount of costs that an unsuccessful party could reasonably expect to pay, the complexity of the issues and the importance of the issues to the parties, I am of the opinion that the amount claimed by Zehr is fair and reasonable.
Result
[43] Transit shall pay costs to Zehr on a partial indemnity scale fixed at $13,159.30 within 30 days.
Justice P.B. Hambly Released: May 31, 2016
COURT FILE NO.: 11-4741-SR DATE: 2016-05-31 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: B-W Feed & Seed Ltd. Plaintiff - and – Zehr Transport Ltd., Michael Leslie Pullen and Stargate Manufacturing Inc. Defendants AND BETWEEN: Zehr Transport Ltd. Plaintiff - and – Transit Trailer Limited and Stargate Manufacturing Inc. Defendants - and – B-W Feed & Seed Ltd. Third Party Ruling on costs P.B. Hambly J. Released: May 31, 2016