Blundon v. Ashton Pools, 2016 ONSC 4487
COURT FILE NO.: 11-4705-A-SR
DATE: 2016-07-11
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Lisa Blundon and Luke Blundon
Plaintiffs
- and -
Ashton Pools, Ponds and Spas Inc.
Defendants
-and-
Benco-Concrete Inc.
Third Party
Judy Fowler Byrne,
Counsel for the Plaintiffs
Jarvis Postnikoff,
Counsel for the Defendants
Harjinder Mann
Counsel for Third Party
The Honourable Mr. Justice P.B. Hambly
JUDGMENT
[1] I rely on the facts set out in my judgment dated May 2, 2016. I will refer only to the facts that are necessary to support this ruling on costs.
Claims for Costs
[2] The Blundons have filed a bill of costs which shows disbursements of $19,856.74 and HST of $2,507.28, for a total of $22,364.28. It shows fees of $47,104.00 on a partial indemnity basis plus HST of $6,123.52, for a total of $53,227.52. This would total $75,591.80, including disbursements ($53,227.52 + $22,364.28) on a partial indemnity basis. It shows fees of $70,655.50 on a substantial indemnity basis plus HST of $9,185.22, for a total of $79,840.72. This would total $102,225.00 ($70,840.72 + $22,364.28) on a substantial indemnity basis.
[3] Ms. Byrne, who has represented the plaintiffs throughout, claims 110 hours for preparation by her, 92 hours for preparation by other lawyers, 5.3 hours for a clerk and 8.1 hours for students. She claims 51 hours for 6 days of trial. She claims 24 hours for preparation of written final submissions and costs submissions. I asked for reply costs submissions which will not be included in these figures. I will allow her another 2 hours for preparation of these submissions. On a partial indemnity scale she claims an hourly rate of $200 to $315 for herself, $120 to $185 for other lawyers, $85 for the clerk and $80 for the students. She multiplies these rates by 1.5 to get rates on a substantial indemnity scale.
[4] The Blundons claim costs against Ashton Pools as follows:
Partial Indemnity until date of Offer
on April 19, 2013: $ 4,412.50
Substantial Indemnity after Offer: $ 64,036.75
Subtotal: $ 68,449.25
Disbursements: $ 19,856.74
HST: $ 15,244.82
Total: $103,550.81
Rounded down to $100,000.00, all inclusive.
[5] Benco claims costs against Ashton Pools for fees on a partial indemnity basis of $36,228.00 plus HST of $4,709.64 for a total of $40,937.64. On a substantial indemnity basis it claims fees of $54,342.00 plus HST of $7,064.46 for a total of $61,406.46. It claims disbursements of $6,395.27. Its total claim on a partial indemnity basis is $47,339.91 ($40,937.64 + $6,395.27). Its total claim on a substantial indemnity basis is $67,801.73 ($61,406.46 + $6,395.27).
[6] Mr. Mann claims 77.1 hours for preparation, 21.5 hours for a student and 11.9 hours for a clerk. He claims an additional 12.9 hours for preparation of written final and costs submissions. He claims 66 hours for the 6 day trial consisting of 8.5 hours per day in court and 2.5 hours per day for travel. He claims an hourly rate for himself on a partial indemnity scale of $200, for his clerk of $85 and for his student of $80. He multiplies these rates by 1.5 to get rates at a substantial indemnity basis.
[7]
Facts
[8] The Blundons entered into a contract with Ashton Pools to install a swimming pool in their backyard on May 15, 2009. Ashton Pools installed the swimming pool in September 2009. Benco, which supplied liquid concrete to Ashton Pools for the installation of the cement patio which cracked, worked under the direction of Ashton. Benco obtained the liquid concrete from Cross Country which was not sued. The Blundons commenced an action against Ashton Pools on September 1, 2011. Ashton Pools commenced the third party action against Benco on November 7, 2011.
[9] The Blundons noticed cracks in the cement patio installed by Ashton Pools between the edge of the swimming pool and their house in February 2010. They notified Ashton of this. He attended at the Blundons’ residence in the Spring of 2010 at which time he inspected the cracks.
Expert Evidence
[10] The parties retained three engineers whom I found were experts on the installation of concrete. The Blundons retained Mr. J. Bishop who provided a report dated May 22, 2012 and Mr. G. Lay who provided a report dated October 30, 2015. Ashton Pools retained Mr. S. Blaney who provided reports dated September 30, 2014 and November 19, 2015.
[11] Mr. Bishop was of the opinion that “excessive water in the concrete mix at the time of installation in combination with poor installation techniques employed by the contractor.” (p. 10 of report) was responsible for the cracking. Mr. Lay in his report expressed a conclusion as follows:
The findings of our investigation suggest that frost heave was likely the dominant cause of cracking within the slab, with a secondary factor possibly being poor compaction associated with some of the areas, particularly around the drain. The base material encountered under the slab was a clayey silt, which is generally not recommended for use as a base material, and is susceptible to grow ice lenses and heave in the presence of frost. The cracks also were reportedly first observed in February 2010; this timing is consistent with frost heave damage. The cracks likely could have been prevented had free-draining granular material, such as sand and gravel, been placed and compacted beneath the slab. This material is normally specified for use under slabs and pavements because it can achieve a high relative density through moderate compaction efforts, and is not susceptible to grow ice lenses or heave in the presence of frost. (p. 6-7 of report – emphasis added)
[12] Mr. Blaney, Ashton Pools’ expert, in his report dated November 18, 2015 seems to agree with Mr. Lay that the cause of the cracking of the cement between the pool and the house was the inadequate silt clay base soil installed by Ashton Pools from the soil that it had excavated to install the pool. He states the following:
Giffen Koerth (Mr. G Lay) reports that the soil was found to have a moisture content of 15.8 to 17.2 percent. Since this class of soil is relatively impervious to water it is unlikely that it has absorbed much water since being placed. It is however known that clayey silt tills at higher moisture contents are susceptible to expansion when exposed to freezing temperatures. (p.2)
Unfortunately over time and subject to freeze thaw, the zone adjacent to the basement foundation walls is susceptible to differential settlement and minor frost movements. (p. 3)
[13] In his evidence at trial, in answer to questions by Ms. Byrne in cross examination, he stated the following:
Q. So, would you agree with me that knowing all that, when this patio was first built and knowing that water was inevitably going to come in contact with this patio, that it should have been put – it should have been built in such a way as to prevent that water from seeping through the concrete?
A. To make sure that it doesn’t accumulate so that it can sink through the cracks.
Q. Thank you. And it’s fair to assume that only after six months of owning that patio, that that sort of damage should not be allowed to occur?
A. I wouldn’t think that you would be getting damage after six months. (transcript of cross examination of Mr. S. Blaney on January 29, 2016 p. 23)
Judgment
[14] In my judgment, based on the evidence called at the trial, I concluded that the cause of the cracking was the following:
26 The base material which Ashton employees placed on the ground where the concrete was poured in the area of the cracking was inadequate. It was clayey silt that they had excavated to install the pool, reworked and deposited there. It was impervious to water. Water accumulated in the void under the concrete. The water that did seep into this material stayed in the material. It froze and expanded in the winter which caused the concrete above it to crack. The material that should have been used and was used in the area of TP 2 where there was no cracking was free draining material such as sand and gravel. Benco on Ahston's direction placed insufficient control joints or saw cuts in the south east corner around the posts supporting the deck. This also contributed to the cracking. Spalling caused the concrete to break away at the east end of the solar blanket. Benco employees are responsible for this. The amount of spalling, however, is insubstantial.
27 The concrete mix was delivered in four loads. Since there are some areas of the patio that are free of cracking, all the concrete mix cannot have had too much water. Cross Country was not sued. No one from Cross Country was called to testify. No evidence was introduced as to the amount of water that was in the concrete mix when Cross Country delivered it to the site. The evidence was that cracks resulting from too much water in the concrete mix will appear within 72 hours of the concrete mix being poured. There was no evidence of cracks appearing within that period of time. I find that too much water in the concrete mix that was delivered to Michener was not a cause of the cracking in the patio on which the Blundons base their claim.
[15] Ashton Pools relied on exemption clauses in the contract. I found that the law, as applied to the facts, did not relieve Ashton Pools from liability under the contract.
No Evidence
[16] The third party claim by Ashton Pools against Benco relied on the theory that the cracking in the patio was caused by too much water in the liquid concrete that it delivered. However, Ashton Pools called no evidence to support this theory. The experts agreed that it is impossible to determine after concrete has hardened how much water was in the original liquid concrete mixture. (judgment para. 15)
[17] Ashton Pools did not provide evidence to support its defence of the Blundons’ claim or its third party claim against Benco.
Plaintiffs’ Allegations of Obstruction by Ashton Pools
[18] Ms. Byrne, who represented the plaintiffs throughout, in her written costs submissions set out numerous incidents of alleged obstruction by Ashton Pools in moving the action forward. The incidents that I regard as relevant are as follows:
Delay of over 1 year in providing an affidavit of documents
Nonattendance on February 5, 2013 at a prearranged date for examinations of discovery
Slowness in answering undertakings
Non-cooperation in arranging a date for a pretrial conference
No response to the recommendation of the pretrial judge on October 28, 2014 to divide the cost of an expert on “destructive testing”. The plaintiffs obtained Mr. G. Lay on their own. Destructive testing meant the removal of a portion of the cement patio to examine the base under the cement patio. It was his report dated October 30, 2015, which in my view identified the cause of the cracking.
The plaintiffs served a request to admit dated November 9, 2015 asking that Ashton Pools admit some 76 items, most of which were not controversial. Ashton Pools delivered a response dated on the same date in which it refused to admit each item and recited beside each item as its reason “The request to admit was not served in a timely manner”.
Ashton Pools first retained Mr. E. Savas of Simpson Wigle to represent it. On the eve of trial in June, 2015, Ashton Pools discharged Mr. Savas and retained Mr. J. Postinikoff of Petker Campbell Postinikoff. The Assignment Court Judge had made the trial date in June peremptory. The retention of new counsel by Ashton Pools made it necessary to adjourn the trial. Counsel for the plaintiffs makes an allegation in her costs submissions as follows:
- The matter was further delayed because of Defence counsel’s trial schedule. Not only did Defence counsel not want to proceed in June 2015, he also advised the Court that he was already completely booked for the September sittings. Accordingly, it is submitted that the Defendant purposely and knowingly picked counsel who would not be available to try the matter for at least half a year.
- Motion brought by Ashton Pools which it lost on the eve of the new peremptory trial date in January, 2016 for an adjournment of the trial because “the principal of the Defendant had ‘other appointments south of the border’ at that time.”
[19] In his written submissions on costs, counsel for Ashton Pools makes no response to these allegations. I, therefore, accept them as valid and accurate.
Law on Costs
[20] The Courts of Justice Act provides as follows:
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.
[21] The Rules of Civil Procedure state the following:
1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
49.10 (1) 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 partial indemnity costs to the date the offer to settle was served and substantial indemnity 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 partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.
Burden of Proof
(3) The burden of proving that the judgment is as favourable as the terms of the offer to settle, or more or less favourable, as the case may be, is on the party who claims the benefit of subrule (1) or (2).
49.13 Despite 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
[22] In Andersen v. St. Jude Medical, Inc. [2006] the Divisional Court in the judgment of Justice Lax set out the principles that a judge should follow in fixing costs that are fair and reasonable as follows:
22 …
- 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.
A consideration of experience, rates charged and hours spent (formerly a costs grid calculation) 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.
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 at p. 249.
The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.
(Adopted by the Court of Appeal in the judgment of Justice Epstein in Davies v. Clarington 2009 ONCA 722 at para. 51).
Cases Where Large Costs Were Awarded Following A Judgment For Small Damages[1]
[23] In Webster v. B.C.R. Construction Incorporated, 2014 ONSC 5657 (S.C.J., Div.Crt.) a judgment was made in favour of the Plaintiff, after an eight day trial, for $30,405.76, plus interest, and a counterclaim was dismissed. The trial judge awarded $100,000.00 in costs to the Plaintiff. The appeal of the cost order to the Divisional Court was dismissed. The Divisional Court found that the trial judge specifically considered proportionality and the correct legal principles, and accordingly found no error in principle or other error that would justify overturning that order.
[24] In Fernandes v. RBC Life Insurance Company, 2008 41169 (ONSC), the Plaintiff’s claim against RBC was dismissed following a five day trial. The Defendant sought partial indemnity costs of $114,000, inclusive of fees, disbursements and GST. The action was complex involving five pre-trials, six motions, mediation and a five day trial. Bearing this in mind, the trial judge found that it was reasonable for the parties to expect that such proceedings would result in a cost award of $100,000 inclusive of fees, disbursements and GST.
[25] In Calian Technology Ltd. v. Fredrickson et al, 2004 4028 (ONSC) following a seven day trial, judgment was awarded to the Plaintiffs in the sum of $172,760.00. The Plaintiffs sought partial indemnity costs up to the date of an Offer to Settle and substantial indemnity thereafter. The Plaintiff was awarded costs in the sum of $101,988.90, plus GST and disbursements.
[26] In Graat v. Adibfar, 2003 ONSC 3268 () after a six day trial the Plaintiff’s claim of medical malpractice was dismissed. No offers to settle were mentioned in the judgment. The defendant was awarded partial indemnity fees of $42,262.50, plus HST, plus disbursements. Although the Plaintiff originally claimed the sum of $500,000.00, days before the trial commenced, general damages were agreed upon in the sum of $20,000.
[27] In Gaukel v. Thukral, 2008 58152 (Ontario SC), the Plaintiff was awarded $40,000 for general damages as a result of injuries sustained in a motor vehicle accident after a six and a half day trial. The Plaintiff was awarded fees in the sum of $45,390.40 on a partial indemnity basis, plus GST and disbursements.
Offers to Settle
[28] The plaintiffs filed an offer to settle dated April 19, 2013. They offered to settle their claim against Ashton Pools by way of a payment by Ashton Pools of $25,000; pre-judgment interest from September 1, 2011 to the date of the acceptance of the offer; partial indemnity costs from August 30, 2010 to April 19, 2013 to be agreed upon or to be assessed and $3,304.08 in disbursements. The offer was open for acceptance until April 23, 2013. After that date Ashton Pools would be required to pay the plaintiffs substantial indemnity costs to the date of acceptance as agreed upon or assessed. Ashton Pools made an offer to settle in a letter dated Thursday, November 19, 2015 to counsel for the Blundons and Benco, by way of an “offer to contribute” to the damages of the plaintiffs in the amount of $12,500. The main action and the third party claim were to be dismissed without costs. The offer expired on Friday, November 20, 2015 at 4:30 p.m. Benco made no offer to settle.
Whether Rule 49.10 Applies
[29] In Rooney v. Graham, 2001 24064 (ON CA), [2001] O.J. No. 1055 the plaintiff claimed damages suffered in a motor vehicle accident. She offered to settle prior to trial for $800,000, plus party and party costs to the date of the offer and solicitor client costs thereafter. The jury awarded the plaintiff damages of $1,041,634.85. The trial judge awarded the plaintiff party and party costs to the date of the offer and solicitor client costs thereafter on the basis that the judgment was more favorable to the plaintiff than the offer. The defendants appealed. Justice Laskin held for the majority that to determine if the judgment was more favorable to the plaintiff than the offer, it was necessary to compare what the plaintiff would be entitled to in costs on a party and party basis from the date of the offer to the trial, with what she would be entitled to on a solicitor client basis in addition to the damages offered and awarded. Justice Laskin stated the following:
58 The difficult question is what cost comparison to make when the offer includes, as it does here, a provision for solicitor-and-client costs from the date it was made. In my view, for the period following the date of the offer, the proper comparison is between solicitor-and-clients costs in the offer and party-and-party costs in the judgment (other than the rare case in which the losing party's conduct would justify an award of solicitor-and-client costs). In other words, for the purpose of comparing the offer with the judgment under rule 49.10, the court must compare the cost provisions in the offer with the trial judge's usual award of party-and-party costs to the successful litigant. In practice, some trial judges do not make an order for costs until they have seen the rule 49 offers. In those cases, for the purpose of comparison under rule 49.10, the court has to assume party-and-party costs of the action. This approach is consistent with the reasoning of Borins J. in Daniels v. Crosfield (Canada) Inc. (1994), 1994 7288 (ON SC), 19 O.R. (3d) 430 (Gen. Div.). To assume solicitor-and-client costs from the date of the offer is to assume a result that is only obtained by applying rule 49.
59 I can understand why Rooney included a provision for ongoing solicitor-and-client costs in her offer to settle. As I said earlier, she did so to ensure that the value of her offer was not diluted over time and to encourage the defendants to settle early. However, by including this provision, she ran the risk that she would lose the benefit of rule 49.10 if the other terms of the offer were close to, though higher than, the corresponding terms of the judgment. Apart from rule 49, the defendants' conduct in this case did not justify a solicitor-and-client cost award. Therefore, to obtain the benefit of rule 49.10, Rooney had to show that her offer to settle, including its provision for costs, was as favourable as or more favourable than the judgment she obtained against Hnatiuk. For the purpose of that comparison, apart from rule 49, the judgment must be assumed to provide only for party-and-party costs.
60 Unfortunately, Rooney led no evidence of her solicitor-and-client costs from the date of the offer, and the trial judge did not analyze Rooney's offer in the way that I have suggested. Still, apart from costs, Rooney's judgment against Hnatiuk exceeded her offer by nearly $200,000. Rooney made her offer in October 1996 and the jury rendered its verdict in December 1997. I find it inconceivable that the difference between solicitor-and-client and party-and-party costs for that fourteen-month period would come close to, let alone exceed, $200,000. The judgment was therefore more favourable than the offer to settle. Accordingly, I would uphold the trial judge's award of costs to Rooney by applying rule 49.10.
[30] The plaintiffs’ bill of costs proposes partial indemnity fees of $47,104.00 and substantial indemnity fees of $70,655.50. They claim disbursements of $19,856.74. In her costs submissions, Ms. Byrne claims partial indemnity fees to the date of the offer on April 13, 2013 of $4,412.50 and substantial indemnity fees after the offer of $64,036.75. Because I have these figures, unlike in Rooney, I am able to compare the consequences of the defendant not accepting the offer, and going to trial with precise figures. Following the judgment of Justice Laskin in Rooney, I assume that the plaintiff would have been awarded partial indemnity costs without the offer. I am also able to calculate the prejudgment interest using the figures provided to me by Ms. Byrne in her written submissions on prejudgment interest. She calculated the prejudgment interest from September 30, 2009, as claimed in the statement of claim, to the date of the judgment on May 2, 2016 at $1,195.45 using the prescribed rate of .5%. This is the amount that I awarded.
The Offer
[31] Damages $25,000.00
Partial indemnity fees $47,104.00
Disbursements $ 3,304.08
HST on Fees and Disbursements[2] $ 6,553.05
PJI on $25,000[3] $ 823.97
Total: $82,821.10
The Trial
[32] Damages $ 36,270.89
Fees[4] $ 68,449.25
Disbursements $ 19,856.74
HST on Fees and Disbursements[5] $ 11,479.76
PJI[6] $ 1,195.45
Total $137,252.09
[33] Clearly the result of the trial was much more favorable to the plaintiffs than was the offer. Rule 49.10 applies.
Amount of Costs that the Unsuccessful Party Could Expect to Pay
[34] Ms. Byrne delivered a letter dated November 19, 2015 to Messrs. Postnikoff and Mann. This is the same day as Mr. Postnikoff’s letter making an offer on behalf of Ashton Pools to contribute $12,500 to the plaintiff’s damages, which offer expired the following day at 4:30 p.m. In her letter, Ms. Byrne pointed out that the costs of the plaintiffs were rising as she prepared for trial. She pointed out that the causes of the cracking of the cement advanced by the three experts did not cast any fault on the plaintiffs. She also pointed out that the fine print of the contract would not likely provide Ashton Pools with a defence because there was no evidence that Ashton, who negotiated the contract on behalf of Ashton Pools, had drawn this part of the contract to the attention of the Blundons. It would appear that neither Mr. Postnikoff nor Mr. Mann responded to this letter.
Conclusion
[35] In Boucher v. Public Accountant, 2004 14579 (ON CA), [2004] O.J. No. 2634, the Court of Appeal in the judgment of Justice Armstrong stated the following:
37 The 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. The costs system is incorporated into the Rules of Civil Procedure, which exist to facilitate access to justice. There are obviously cases where the prospect of an award of costs against the losing party will operate as a reality check for the litigant and assist in discouraging frivolous or unnecessary litigation.
[36] In Risorto v. State Farm, 2003 43566 (ON SC), [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)
[37] Ashton Pools did not submit a bill of costs. Ms. Byrne, in her reply costs submissions, stated the following:
… the Plaintiffs state that it is well within the ability of the Defendant to prepare a Bill of Costs in order to compare the Defendant’s costs with that of the Plaintiffs. It is respectfully submitted that such a Bill of Costs has not been provided because it would show the costs of the Defendant in defending this matter were equal if not more than the Plaintiffs, given that the Defendant retained new counsel in June of 2015 and as a result, probably had to duplicate a great deal of the work already completed. (para. 2)
I agree with this submission.
[38] This was a substantial case, although the amount of money at stake was modest. Ms. Byrne has shown in her bill of costs 228 hours of lawyers’ time for preparation. This converts to 5 ¾ weeks at 40 hours per week. Mr. Mann shows 90 hours in his bill of costs for preparation time. This converts to 2 ¼ weeks at 40 hours per week. In addition, the lawyers spent six days in court. Mr. Postnikoff does not dispute that Ms. Byrne and Mr. Mann spent the time that they claim. He also does not dispute that the time that they spent was required to deal properly with the case. Further, he does not dispute their hourly rates or the hourly rates claimed by their support staff.
[39] Once all the evidence was in, it was obvious what the cause was of the cement cracking adjacent to the house. That was the use by Ashton Pools of the readily available clay silt soil from the excavation to make way for the pool as a base for the liquid concrete that they poured. They did this rather than bringing in sand and gravel to form a proper free draining base. Clearly, water would accumulate on and in the clay silt material, freeze and expand in the winter and cause the overlaying cement to crack. Ashton would know this as an experienced installer of swimming pools with cement patios. His own expert, Mr. Blaney, testified that a cracked swimming pool deck was unacceptable.
[40] Many experienced judges in high places have lamented upon the costs of litigation in courts over which they preside. The litigants cannot afford competent counsel. Often they futilely try to represent themselves. More often they give up. Ms. Byrne and her clients are much to be commended for persevering in this matter to the end. Ms. Byrne informed Ashton Pools in writing, close to the trial date, of the costs consequences of its obstruction and refusal to engage in meaningful settlement discussions. In the middle of the trial, an experienced Superior Court judge at my request, conducted a mid-trial settlement conference to no avail. Ashton Pools, at the direction of its principal Ashton, did everything it could to avoid a trial and to obstruct the plaintiffs within the limits of the rules. [7]
[41] I have found that the offer submitted by the plaintiffs was a Rule 49.01 offer triggering the costs consequences of the rule. Regardless if I am correct in my application of Rooney, I would award the plaintiffs substantial indemnity costs. The offer was reasonable. Ashton Pools did not submit a counter offer. I could make use of Rule 49.03.
[42] The costs that I will award greatly exceed the damages. The principle of proportionality does not apply because of the application of Rule 49.01, the obstruction of the defendant and the defendant not presenting a viable defence.
[43] Ashton Pools submits that I should disallow disbursements for legal research, courier service, stationary and postage, as being overhead claimed by the plaintiffs. It does not cite authority binding on me that would require me to do so. It also submits that I should deny travel expenses to Mr. Mann, whose home and office is in London., Further, it submits that I should reduce the account of Mr. Mann because he was late on several days. Mr. Mann being late was an irritant and I do not condone it. When a lawyer is late it holds up the whole court. Many people need to be in place for a trial to proceed. I marvel at how almost all the players are usually in place. It is destructive to the administration of justice when an essential player is not present. However, Mr. Mann was not grossly late, was always prepared and did good work when he arrived. His written submissions were well prepared and useful. I do note that Benco did not file an offer to settle. Also the demand on Mr. Mann in defending the claim against Benco was less than the demand on Mr. Byrne in presenting the claim of the plaintiffs. This is reflected in the much greater time for lawyers’ work in the bill of costs presented by Ms. Byrne.
[44] The factors in Rule 57.01 that are important here are the result, the principle of indemnity, the costs that the unsuccessful party could reasonably expect to pay, the importance of the issues to the parties and a party’s refusal to admit anything that should have been admitted. On the issue of the importance of the lawsuit to the parties, I note that Lisa Blundon testified that she and her husband elected to put their savings in a pool rather than buy a cottage.[8] They were left with an unacceptable ugly scar in their backyard.
Result
[45] Ashton Pools shall pay costs to the plaintiffs as claimed, on a substantial indemnity basis rounded down in the amount of $100,000. Ashton Pools shall pay costs to Benco on a party and party basis in the amount of $47,339.91. These costs are payable within 30 days.
Justice Peter B. Hambly
Released: July 11, 2016
CITATION: Blundon v. Ashton Pools, 2016 ONSC 4487
COURT FILE NO.: 11-4705-A-SR
DATE: 2016-7-11
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Lisa Blundon and Luke Blundon
Plaintiffs
- and -
Ashton Pools, Ponds and Spas Inc.
Defendants
JUDGMENT ON COSTS
P.B. Hambly J.
Released: July 11, 2016
[1] Taken from p.6-7 of plaintiffs’ written costs submissions with minor adjustments.
[2]13% of 50,408.08 (47,104 + 3,304.08)
[3]25,000 x 2406 divided by 365 x .005
[4]Partial indemnity to date of offer and substantial indemnity after (4,412.50+64,036.75)
[5]13% of 88,305.99 (68,449.25+19,856.74)
[6]36,270 X 2406 divided by 365 x .005
[7] I cast no aspersions on Mr. Postnikoff. It was obvious he was acting on instructions. He did nothing that was unethical.
[8] Transcript January 25, 2016 p.21, ll. l4-10.