Court File and Parties
CITATION: Mandel v. Fakhim, 2016 ONSC 7390
COURT FILE NO.: CV-11-429296
DATE: 2016-11-28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALAN MANDEL
Plaintiff
– and –
ZOHREH FAKHIM, UNIVAR CANADA LTD. and ROY FOSS MOTORS LTD. operating as FOSS NATIONAL LEASING
Defendants
Counsel: Alan L. Rachlin, for the Plaintiff Frank N. DelGiudice and Michael Vrantsidis, for the Defendants
READ: November 28, 2016
REASONS FOR DECISION ON COSTS
F.L. Myers, J.
[1] The plaintiff sued the defendants for more than $1million in damages that he claimed to have suffered as a result of a very minor fender bender. The bulk of the trial involved the plaintiff’s efforts to prove that he suffered injuries and chronic pain that his injuries and pain were caused by the car accident. After 13 days of testimony, the jury returned a verdict for the defendant of $3,000 in general damages and zero for special damages (consisting of: past and future loss of income, past and future care, and housekeeping expenses). Having regard to the statutory deductible under s. 267.5 (7) of the Insurance Act, RSO 1990, c.I.8, the plaintiff received no recovery so the action will be dismissed.
[2] The plaintiff’s recovery for the purpose of assessing costs is the final number after application of the statutory deductible under s. 267.5 (7). Mandel v Fakhim, 2016 ONSC 6538 at para. 32. Therefore costs are assessed on the basis of zero recovery rather than $3,000 recovery.[^1]
[3] As the defendant succeeded and the plaintiff obtained no award at all, the presumptive cost consequences of Rule 49.10 do not apply to this action. However, Rule 49.13 provides that the court has a residual discretion to consider offers to settle in making its costs determination. Costs can be awarded, for example, on a substantial indemnity basis to a defendant who successfully defends an action after having made a positive offer to settle. The normal costs on a partial indemnity basis apply up to the date of the offer and substantial indemnity costs may be ordered thereafter under Rule 49.13 and the general wording of Rule 57.01. Lakew v. Munro, 2014 ONSC 7316 at para. 55 and S & A Strasser Ltd. v. Richmond Hill (Town), 1990 CanLII 6856 (ON CA).
[4] The defendants offered to settle with the plaintiff on August 31, 2016 on the basis that they would pay the plaintiff $60,000 plus his costs. Having beat their offer and obtained a complete dismissal of the claim, the defendants ask for their costs on a partial indemnity basis to the date of the offer and a substantial indemnity basis thereafter in the aggregate amount of almost $355,000.
[5] Alternatively, the defendants calculate their costs on a partial indemnity basis throughout the proceeding at approximately $340,000.
[6] I would not exercise my discretion to grant any amount of costs on a substantial indemnity basis in this case. While the defendants beat their offers, the offers essentially sought a capitulation by the plaintiff. The Rules do not provide for mandatory cost consequences in this case and I do not see a basis to penalize the plaintiff with added costs otherwise.
[7] The defendants have calculated their fees on a partial indemnity basis at 70% of their full fees. In my view, 60% is a better presumptive ratio of partial to full indemnity fees. The defendants offer no reason to calculate their partial indemnity fees at 70%. Applying 60% reduces the defendants’ fees from $183,209 to $157,036. This reduces the aggregate costs claimed to $313,263.
[8] The plaintiff concedes that the defendants are presumptively entitled to costs. However, he argues that the costs claimed are grossly disproportionate. He asks for the defendants’ costs to be fixed at $100,000 including disbursements and taxes.
[9] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), (2004), 71 O.R. (3d) 291, at paras 26, 37.
[10] The plaintiff raises a number of concerns with the reasonableness of time charged by the defendants’ counsel at various stages. The plaintiff had a contingency fee relationship with his counsel so counsel did not keep dockets of his own. It is therefore difficult for the plaintiff to complain about time spent in the abstract. Having said that, the defendants’ law clerk has billed a very substantial amount of time to preparation for the pre-trial conference. In personal injury matters, experts’ reports are generally put before the court at the pre-trial conference in order to maximize the likelihood of meaningful settlement discussions being held. It is not surprising therefore to see significant time being docketed to pre-trial preparation. Moreover, the law clerk’s time is billed at a very modest rate. Nevertheless the sheer number of hours is a matter for the court to consider in the exercise of its overall discretion.
[11] The plaintiff denies that the matter was complex enough to justify making the plaintiff responsible for the costs of two counsel appearing for the defendants at trial. I disagree. The parties were unable to agree on a small number of relevant records to put before the court. Rather, there were many thick volumes of medical records and experts reports to handle at trial. The plaintiff produced important documents right before the trial. Moreover, the plaintiff’s solicitor (not Mr. Rachlin) did not keep track of the records provided to a number of experts. Tracking and handling documents were significant tasks at the trial. It was quite reasonable therefore for the defendants to have two counsel at trial to manage the confusing mass of material and experts in a million dollar case.
[12] The plaintiff also notes that the defendants’ counsel agreed to write off about $5,000 of the fees that they charged to their client. In addition, a substantial portion of the fees billed by the defendants’ counsel have not yet been paid. From this, the plaintiff’s counsel extrapolates that the defendants’ counsel is improperly seeking more in costs than will actually be paid by their client. In reply, counsel for the defendants have assured the court that their invoices are indeed payable by their client. Absent evidence to the contrary, I take counsel at their word.
[13] The plaintiff challenges the disbursements incurred by the defendants principally related to expert witnesses. He contests surveillance fees although the surveillance material was admitted into evidence at the trial on consent.
[14] There were two issues in the case: (a) did the jury believe Mr. Mandel; and (b) did the jury accept the causation evidence of Mr. Mandel’s experts or the lack of causation evidence of the defendants’ experts. The defendants called a doctor to respond to each of the plaintiff’s doctors. There was no overkill by the defendants. The doctors on both sides were all leading medical practitioners in their fields. Some had to attend for two days. Had the plaintiff asked counsel what the likely costs of experts would be overall for the defendants assuming that the experts properly studied the voluminous medical files provided to them by counsel and then prepared fully with counsel for the trial, I cannot conclude that the cost is outside the order of magnitude that the plaintiff ought to have reasonably expected.
[15] The plaintiff also argues that the defendants’ experts were too expensive. The plaintiff submitted invoices from three of its five experts by way of contrast. Without a complete set of invoices and supporting dockets, this is not very helpful. The fact that some experts billed sooner than others suggests that the others’ accounts may be more complicated and hence higher. I note that the two outstanding experts are both very senior practitioners and were key witnesses. It is not fair to draw any conclusions from the partial invoice set provided by the plaintiff.
[16] Overall, the costs sought by the defendants are in the same range as were awarded in other similar cases cited by the defendants at paras. 16 and 17 of their submissions.
[17] I am not assessing the lawyers’ accounts on a docket-by-docket basis. Overall the task is to assess reasonableness. Recognizing another 10% deduction for potential duplication, inefficiencies, and minor off-tariff disbursements, is appropriate. In my view it is fair and reasonable in light of all of the factors noted above for the plaintiff to pay the sum of $280,000 to the defendants jointly and severally for costs, including fees, disbursements and taxes.
F.L. Myers J.
Released: November 28, 2016.
CITATION: Mandel v. Fakhim, 2016 ONSC 7390
COURT FILE NO.: CV-11-429296
DATE: 20161128
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALAN MANDEL
Plaintiff
– and –
ZOHREH FAKHIM, UNIVAR CANADA LTD. and ROY FOSS MOTORS LTD. operating as FOSS NATIONAL LEASING
Defendants
REASONS FOR JUDGMENT
F.L. Myers, J.
Released: November 28, 2016
[^1]: Even if this were not the case, I would have resolved costs in the same way. This case was not about Small Claim Court level recovery for a very minor fender bender. The plaintiff sought $1 million for chronic pain and in that endeavour he was wholly unsuccessful.