Gouett et al. v. Mullins et al.

[Indexed as: Gouett v. Mullins]

Ontario Reports

Ontario Superior Court of Justice,

DiTomaso J.

January 28, 2016

128 O.R. (3d) 555 | 2016 ONSC 714

Case Summary

Civil procedure — Costs — Particular orders as to costs — Applicants applying for declaration that road which ran over respondents' property was access road — Respondents defending that application and applying for declaration that road was not access road — Respondents substantially successful and awarded costs — Costs reduced by amount of payment which respondents received from their title insurer.

The applicants applied under the Road Access Act, R.S.O. 1990, c. R.34 for a declaration that a private road which ran over the respondents' property was an access road. The respondents defended that application and applied for a declaration that the road was not an access road. The respondents were substantially successful. They sought their costs, and argued that the costs ought not to be reduced by a payment they received from their title insurer as the applicants should not be allowed to benefit from the respondents' prudent decision to purchase title insurance.

Held, the respondents should be awarded their costs on a partial indemnity basis, reduced by the amount of the payment from their title insurer.

The respondents were not compensated by their title insurer for any wrongful act or damage committed by the applicants. Rather, they were compensated for the cost they would incur in defending the application. The respondents would suffer considerably less financial hardship because they had already been compensated by their title insurer for a substantial amount of costs that were incurred in defending the matter. Costs are for indemnity only and cannot be a source of profit to a successful party.

Krawchuk v. Scherbak (2011), 106 O.R. (3d) 598, [2011] O.J. No. 2064, 2011 ONCA 352, 279 O.A.C. 109, 82 C.C.L.T. (3d) 179, 332 D.L.R. (4th) 310, 5 R.P.R. (5th) 173, 4 C.L.R. (4th) 1, 201 A.C.W.S. (3d) 848, distd

Other cases referred to

Cunningham v. Wheeler, 1994 CanLII 120 (SCC), [1994] 1 S.C.R. 359, [1994] S.C.J. No. 19, 113 D.L.R. (4th) 1, 164 N.R. 81, [1994] 4 W.W.R. 153, J.E. 94-496, 41 B.C.A.C. 1, 88 B.C.L.R. (2d) 273, 23 C.C.L.I. (2d) 205, 20 C.C.L.T. (2d) 1, 2 C.C.P.B. 217, 46 A.C.W.S. (3d) 863; Gouett v. Mullins, [2015] O.J. No. 6400, 2015 ONSC 7593 (S.C.J.); Tory, Tory, Deslauriers & Binnington v. Concert Productions International Inc., [1986] O.J. No. 2612, 14 C.P.C. (2d) 103, 30 C.R.R. 23, 1986 CarswellOnt 476 (S.C. -- Assessment Officer)

Statutes referred to

Road Access Act, R.S.O. 1990, c. R.34 [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 58.06(h)

RULING on costs. [page556]

Michael Miller, for applicants/respondents by counter-application.

Michael W. Carlson, for respondents/applicants by counter-application.

DITOMASO J.: —

Introduction

[1] The parties were involved in a dispute as a result of the Gouett's use of a road which ran through the property of Ms. Mullins and Mr. Black. The road was not a public highway. Pursuant to the Road Access Act, R.S.O. 1990, c. R.34 (the "Act"), Ms. Mullins and Mr. Black brought an application seeking a declaration that the private road known as Tay Bay Road which ran over their property was not an access road as defined by the Act. They further sought a permanent order closing their road which they claim as their private driveway to the Gouetts. The Gouetts brought a counter-application under the Act seeking a declaration that Tay Bay Road which ran across the property owned by Ms. Mullins and Mr. Black was an access road defined by the Act and also sought a permanent injunction restraining Ms. Mullins and Mr. Black from blocking or interfering with the Gouett's use of the access road. The applications were consolidated and heard together.

[2] My reasons for decision were delivered on December 4, 2015 [[2015] O.J. No. 6400, 2015 ONSC 7593 (S.C.J.)].

[3] Ms. Mullins and Mr. Black were substantially successful on their application. They were granted the following:

(a) a declaration that the private driveway on property owned by them is not an access road as defined by the Road Access Act, and a permanent order closing the private driveway to the Gouetts. The Gouetts' application was dismissed.

[4] The parties agree that costs would be determined by way of written submissions. I have received those written submissions and here are my reasons on costs.

Positions of the Parties

Position of Ms. Mullins and Mr. Black

[5] They submit that they are entitled to costs on a substantial indemnity scale given the fact that they were the successful parties on the application. Given the alleged false testimony of Mr. Gouett, they seek costs in the amount of $48,058.53 on a substantial indemnity scale. [page557]

[6] Ms. Mullins and Mr. Black purchased title insurance. They received a payment from their title insurer, Stewart Title. Their position is that the Gouetts are not entitled to benefit from the purchase of title insurance so as to apply these funds against any costs award to be determined in this matter. Ms. Mullins and Mr. Black deny that the Gouetts are entitled to any such offset.

Position of the Gouetts

[7] The Gouetts deny that Ms. Mullins and Mr. Black are entitled to costs on a substantial indemnity scale. They deny that the conduct of Mr. Gouett amounts to the level of reprehensible conduct warranting such an award in this case.

[8] Rather, Ms. Mullins and Mr. Black are entitled to partial indemnity costs fixed in the amount of $7,300. This amount takes into account a reduction of the partial indemnity bill of Ms. Mullins and Mr. Black in the claimed amount of $32,326.11 less the amount of $25,025 received from their title insurer.

Analysis

Entitlement

[9] I find that Ms. Mullins and Mr. Black are the successful parties in respect of the consolidated applications ordered by this court.

[10] They are entitled to partial indemnity costs and not the substantial costs they claimed.

[11] While some of the evidence of Mr. Gouett was not accepted, his testimony did not rise to the level of such egregious conduct so as to attract an award of substantial indemnity costs. Rather, the scale of costs properly assessable in this case is partial indemnity costs.

Quantum

[12] Ms. Mullins and Mr. Black claim partial indemnity costs in the amount of $32,326.11.

[13] The issue to be determined is as follows:

Should funds from a title insurance policy claim be applied against the costs award to be determined in this matter?

[14] Ms. Mullins and Mr. Black rely on the decision of the Ontario Court of Appeal in Krawchuk v. Scherbak (2011), 2011 ONCA 352, 106 O.R. (3d) 598, [2011] O.J. No. 2064 (C.A.). They submit that the case is directly on point and deals with the issue in our case. [page558] In Krawchuk, Ms. Krawchuk settled her policy claim with Stewart Title and went on to pursue the vendor for damages at trial. She was successful at trial and as well on appeal. She was awarded damages and her legal costs. The court dealt with the appellant's argument that Ms. Krawchuk suffered little or no loss given her recovery from Stewart Title and that she should not be allowed to "double recover".

[15] The court rejected this argument based on the concept of the private insurance exception which provides "where a plaintiff recovers under an insurance policy for which he has paid the premiums, the insurance moneys are not deductible from damages payable by the tortfeasor". See Krawchuk, supra, at para. 99.

[16] There is a further discussion of the private insurance exception and "double" recovery, at para. 100, where the court cites the Supreme Court of Canada in Cunningham v. Wheeler, [1994 CanLII 120 (SCC), [1994] 1 S.C.R. 359, [1994] S.C.J. No. 19] in subsequent paras. 101 to 105 and 108 to 111.

[17] Ms. Mullins and Mr. Black submit the Gouetts cannot be allowed to benefit in any manner from the prudent decision by Mullins and Black to protect from potential losses by purchasing title insurance. Further, any award of costs should not be affected by any insurance settlement received Ms. Mullins and Mr. Black.

[18] The Gouetts do not take issue with the principle set out in Krawchuk that a wrongdoer cannot take advantage of a plaintiff's policy of insurance.

[19] In Krawchuk, the Court of Appeal went to some length to emphasize that it would be inequitable to prevent a tortfeasor to obtain the advantage of benefits earned by the person who has been injured.

[20] However, the Gouetts submit that Krawchuk is distinguishable from the case at bar. As there was no wrongdoing, no tort was committed and no loss was suffered by Ms. Mullins and Mr. Black. Rather, this is a case involving the limited right provided under the Road Access Act. The Gouetts submit that the payment of title insurance moneys ought to be applied against the reduction of any costs awarded herein.

[21] Specifically, the Gouetts submit that those insurance funds ought to be applied against the partial indemnity bill, reducing it from the amount claimed to $7,301.11.

[22] I find that the Krawchuk case is distinguishable from the case at bar. The Gouetts are neither tortfeasors or wrongdoers. This is no claim for damages or wage loss. Rather, this is a case involving the limited right provided under the Road Access Act. [page559] There are numerous cases in which it has been determined that the Act does not provide an access seeker with any legal right or with any right that is registerable on title. The Road Access Act merely provides an access seeker with the right to travel by car to their property over their neighbour's property. The Act does not provide them the right to perform any work on the access route, or to use the access route by any means other than by motor vehicle. If the access became impassable, the right of access would cease. Our case was not a case involving a title defect.

[23] Further, I find that Ms. Mullins and Mr. Black were not compensated by Stewart Title for any wrongful act or damage committed by the Gouetts. Rather, they were compensated by their title insurer for the cost they would incur in defending the action brought by the Gouetts. Payment by Stewart Title was made within the context of the dispute between Mullins and Black and the Gouetts regarding the road access.

[24] I find the principles enunciated in Krawchuk have no application in our case as there was no wrongdoing, no tort was committed and no loss was suffered by Ms. Mullins and Mr. Black. I find as evident from Mr. Black's testimony on his examination that Ms. Mullins and Mr. Black made a claim to their title insurer arising from Gouetts' claim that the driveway was an access road. In this regard, Ms. Mullins and Mr. Black were paid the sum of $25,025. I also find that Ms. Mullins and Mr. Black chose to use those fund to defend the application brought by the Gouetts rather than accepting payment in compensation for the inconvenience of providing the Gouetts with access. Ms. Mullins and Mr. Black have no obligation to repay those funds and pursuant to my reasons, the Gouetts have no access.

[25] In the instant case, Ms. Mullins and Mr. Black will suffer considerably less financial hardship because they have already been compensated by Stewart Title for a substantial amount of costs that have been incurred in defending this matter. Rule 58.06(h) [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] permits the court to consider any other matter relevant to costs. The Gouetts relied on the case of Tory, Tory, DesLauriers & Binnington v. Concert Productions International Inc., [1986] O.J. No. 2612, 1986 CarswellOnt 476 (S.C. -- Assessment Officer) for the proposition that costs are for indemnity only and cannot be a source of profit to a successfully party.

[26] I find in the case at bar that Ms. Mullins and Mr. Black are entitled to partial indemnity costs in the amount of $32,326.11, which amount is reduced by the application of the [page560] title insurance payment in the amount of $25,025. The outstanding costs owed by the Gouetts to Ms. Mullins and Mr. Black is the sum of $7,301.11, which I consider fair, reasonable and proportional in all the circumstances.

Disposition

[27] It is hereby ordered that Henry Arthur Gouett and Rita E. Gouett shall pay Lise Marie Mullins and Gerald Terence Black the sum of $7,301.11 for all costs relating to these applications.

Order accordingly.

End of Document