Citation: Baron et al. v. Clark et al., 2017 ONSC 1721

Court File No.: C-390-12 Date: 2017-03-15 Superior Court of Justice - Ontario

Re: Brandon Baron, Sara Benton, Christina Baron, a minor by her litigation guardian, Sara Benton and Conner Baron, a minor by his litigation guardian Sara Benton, Plaintiffs And: Paden Clark and Lorainne Renton o/a Post-Time Bar and Grill, Defendants

Before: The Honourable Justice D.A. Broad

Counsel: Richard Campbell, for the Plaintiffs Paden Clark, Self-represented Jeffrey M.K. Garrett, for the Defendant Lorainne Renton o/a Post-Time Bar and Grill

Costs Endorsement

[1] The parties have been unable to settle the question of costs and have now delivered their submissions on costs.

Positions of the Parties

[2] The defendant Lorainne Renton o/a Post-Time Bar and Grill ("Post-Time") seeks costs on a partial indemnity basis to the date of its Offer to Settle of February 19, 2014, and substantial indemnity costs thereafter. The amount that it claims on this basis is the sum of $185,646 in respect of fees, HST on fees in the sum of $27,846.90, disbursements in the sum of $34,660.46 and HST on taxable disbursements in the sum of $5,200.27 for a total of $253,361.63.

[3] Post-Time points to its Offer to Settle dated February 19, 2014 providing for payment of damages by Post-Time to Brandon Baron in the sum of $50,000 plus costs to be agreed upon or assessed. The plaintiffs made an Offer to Settle providing for payment to them of the sum of $515,000 all-inclusive. Paden Clark made an Offer to Settle to pay the plaintiffs the sum of $10,000 all-inclusive.

[4] Post-Time submits that it is entitled to partial indemnity costs to the date of its Offer to Settle and substantial indemnity costs thereafter on the basis of rule 57.01(1) of the Rules of Civil Procedure which provides that in exercising its discretion under section 131 of the Courts of Justice Act the court may consider any offer to settle or to contribute made in writing.

[5] The plaintiffs submit that the aggregate amount awarded to Brandon Baron in respect of damages and pre-judgment interest in the amount of $70,563 exceeded the combined offers of the defendants being $50,000 in respect of damages from Post-Time and $10,000 all-inclusive from Clark.

[6] The plaintiffs submit that the amount of costs sought by Post-Time is extraordinarily high in all of the circumstances, and while Post-Time ought to be entitled to some costs, the relevant factors to be considered by the court in exercising its discretion with respect to costs militate in favour of a much lower amount. Specifically, the plaintiffs submit the following:

(a) senior counsel was overinvolved in tasks which could of been carried out by junior counsel and clerks;

(b) the claims for costs associated with travel time, legal research and reporting letters from counsel to his own client are unjustified;

(c) there is no reason for Post-Time to have two counsel for the trial as the issues in the trial did not require junior and senior counsel and it cannot be a reasonable expectation that the plaintiffs be required to pay for costs of two lawyers for the entirety of the trial;

(d) although Post-Time was not ordered to pay any portion of the plaintiffs' damages it cannot be said that it was not a necessary party to the proceedings;

(e) the trial was lengthened and made less efficient as a result of Post-Time's conduct during the trial in reference to mid-trial motions, the holding of a voir-dire in respect of the occupational therapist expert Maria Ross; and a pre-trial motion brought by Post-Time in respect of undertakings and refusals upon which it was unsuccessful.

[7] The plaintiffs submit that the amount claimed by Post-Time reflects significant duplication with the unnecessary involvement of two counsel throughout and is far above the level of what would be considered reasonable. It submits that Post-Time's costs should be fixed in the range of $85,000-$100,000, all-inclusive.

[8] The plaintiffs do not request an order for costs against the defendant Paden Clark.

Guiding Principles

[9] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "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 cost shall be paid."

[10] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in sub-rule 57.01(1), notably para. (0.a) the principle of indemnity and para. (0.b) the amount of costs that an unsuccessful party could reasonably expect to pay.

[11] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, [1999] O.J. No. 3707 (Ont. C.A.) at para. 24).

[12] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson 2002 CanLII 41469 (ON CA), [2002] CarswellOnt 1007 (Ont. C.A.), and Macfie v. Cater, 1920 CanLII 401 (ON SC), [1920] O.J. No. 71 (Ont. H.C.) at para 28).

[13] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 CanLII 1042 (ON CA), [2005] O.J. No. 160 (Ont. C.A.)).

[14] Importantly, the case law directs that a costs award must represent a fair and reasonable amount that should be paid, rather than an exact measure of the actual costs, must be consistent with what the unsuccessful party might reasonably have expected to have to pay, and must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, [2013] O.J. No. 4229 (Ont. S.C.J.) at paras. 5 and 6 and the cases therein referred to).

Analysis

[15] Post-Time relies on the cases of S.A.Strasser Ltd. v. Richmond Hill (Town) (1990) 1990 CanLII 6856 (ON CA), 1 O.R. (3d) 243 (C.A.), H.L. Staebler Co. v. Allan (2008) ,2008 CanLII 64396 (ON SC), 92 O.R. (3d) 788 (S.C.J.) and Ecuimates v. Rix [1993] O.J. No. 4100 (Ont. Ct. Gen. Div.) for the proposition that although rule 49.10 does not provide for an award of substantial indemnity costs for a defendant which made an offer to settle in a case where the action was dismissed, the court may consider a defendant's offer under rules 49.13 and 57.01 in determining whether elevated costs should be awarded following the date of the offer.

[16] As was pointed out by Conway, J. in Sandborn Wholesale Ltd. v. Pottruff & Smith Insurance Brokers Inc. 2011 ONSC 2819 this law has now been superseded by the case of Davies v. Clarington (Municipality), 2009 ONCA 722 (Ont. C.A.) in which Epstein J.A. stated at paragraph 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.

[17] It is not suggested that there was any reprehensible conduct on the part of the plaintiffs in this case which would justify an award of elevated costs against them. In my view Post-Time is entitled to costs against the plaintiffs on a partial indemnity basis.

[18] In respect of the quantum of costs on a partial indemnity basis, as indicated above the court is required to consider what is fair and reasonable having regard to what the losing parties could have expected the costs to be. The court is hampered in making this assessment by the fact that the plaintiffs have not submitted their own Costs Outline or Bill of Costs which would give some insight into what their reasonable expectations were with respect to costs.

[19] The major factor relied upon by the plaintiffs on the issue of reasonable expectations is the fact that Post-Time was represented by two counsel at trial, arguing that the issues did not require junior and senior counsel.

[20] In the case of Bakhtiari v. Axes Investments Inc., 2003 CanLII 32527 (ON SC), [2003] O.J. No. 3071 (Ont. S.C.J.) Lane, J. considered the necessity of having two counsel represent the successful plaintiffs in that case and made reference to the case of Dybongco-Rimando Estate v. Jackiewicz, [2003] O.J. No. 534 (Ont. S.C.J.), where Quinn J. had dealt with the same issue. Lane J. said at paragraph 46:

Quinn J. observed that there was a difference between duplication and collaboration and the latter was not necessarily inefficient, but enabled the counsel to use each other as a sounding board. The collaboration was reasonable and beneficial to the plaintiff in the prosecution of her case and could not be dismissed as a luxury that the defendants ought not to bear.

[21] In the present case the plaintiffs were suing Post-Time for over $2,000,000 for damages under various heads. The plaintiffs served multiple experts' reports and called several experts to testify at trial. In addition, there was a very complex legal issue for determination on the question of liability. In my view is was not unreasonable for Post-Time to have chosen to utilize the services of both senior and junior counsel. The two counsel did divide their areas of responsibility, with junior counsel handling a good deal of the legal argument on mid-trial motions. It would have been within the reasonable expectations of the plaintiff that Post-Time would be represented by both senior and junior counsel at trial. That is not to say, however, that the plaintiffs should be held responsible for the time of both counsel at their full hourly rates for the entire length of the trial. In my view, some reduction should be made in recognition of some degree of inefficiency by having both senior and junior counsel present throughout most of the trial.

[22] I do not accept the submission that the costs should be reduced in reference to the voir dire conducted in relation to Maria Ross. The fact is that the necessity of holding an inquiry is not the result of any conduct on the part of Post-Time or its counsel. The inquiry was the direct result of the plaintiff Brandon Baron having consulted with Maria Ross during his cross-examination in the face of an order excluding witnesses and the admonition given to him not to discuss his evidence with any other parties while under cross-examination.

Disposition

[23] In the exercise of my discretion, taking into account the principles referred to above, I fix the costs of Post-Time on a partial indemnity basis in the following amount:

Fees - $ 90,000.00 HST on fees - $ 11,700.00 Disbursements - $ 34,668.46 HST on taxable disbursements - $ 5,200.27 TOTAL - $141,568.73

[24] The plaintiffs shall pay to the defendant Lorainne Renton o/a Post-Time Bar and Grill costs fixed on a partial indemnity basis in the sum of $ 141,568.73. This amount shall be paid within 30 days of the date hereof.

[25] No amount of costs is awarded in favour of or against the defendant Paden Clark.

D.A. Broad, J.

Date: March 15, 2017