Court File and Parties

COURT FILE NO.: 5696/12 DATE: 2017/04/26

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Deborah Lynne Virginia Robbins and Sears Canada Inc.

BEFORE: Justice David L. Edwards

COUNSEL: S. MacKay for the Plaintiff M. Switzer, for the Defendant R. Bambers for OHIP

COST ENDORSEMENT

[1] I presided over an 11-day jury trial in November 2016. The plaintiff claimed that she slipped, fell and was injured in a Sears Canada Inc. store because of Sears’ negligence.

[2] Prior to the commencement of the trial, the defendant brought a motion for partial summary judgment. I granted the defendant’s motion for partial judgment that dismissed all the plaintiff’s claims except for

a) out of pocket expense for 31 chiropractic visits, wrist braces and 14 hours of housekeeping assistance;

b) lost wages between October 19, 2010 to June 27, 2011; and

c) General Damages.

[3] I ruled that it was appropriate for the defendant to bring the motion, because, although on October 26, 2016 counsel for the plaintiff wrote to the defendant and confirmed that the plaintiff would be restricting her claim to those three items, when counsel for the defendant wrote the next day asking whether the plaintiff would amend her claim or consent to an order dismissing her other claims, the plaintiff’s counsel did not respond.

[4] The effect of the jury’s answers was that Sears Canada Inc. was not negligent. It found that because of the fall the plaintiff was entitled to $0 for General Damages; that she had loss of income for the defined period of $8,709.12; and she incurred $480 of costs for housekeeping and chiropractic services.

[5] The defendant submits that on a substantial indemnity basis it is entitled to $416,524.92. Alternatively, it submits that if I were to award partial indemnity costs until an Offer to Settle and substantial indemnity thereafter, it would be entitled to an award of $385,650.67.

[6] The defendant asserts that it made a Rule 49 Offer to Settle dated October 12, 2016, (served October 18, 2016) in which it offered the plaintiff $1 for damages and $1 for costs.

[7] The defendant concedes that the amounts set forth in paragraph 5 are excessive in the circumstances and asserts that a fair and reasonable assessment of the costs would total $306,208.78.

[8] The defendant also submits that OHIP should be responsible for 53.599255093% of the costs between May 1, 2013 and November 8, 2016 which would be $103,155.30.

[9] The plaintiff asserts that a fair and reasonable assessment of the costs would be $50,000.

[10] OHIP submits that no cost award should be made against it, or alternatively, at maximum, it should be responsible for 20% of the properly assessed costs.

Principles

[11] The court has discretion to determine costs under s.131 of the Courts of Justice Act. Rule 57.01(1) of the Rules of Civil Procedure sets out the relevant factors that courts should consider in awarding costs.

[12] The overriding principle is reasonableness. As was noted in Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66, at paras. 51 and 53, the cost award should reflect what the court views as a reasonable amount that should be paid by the unsuccessful party, rather than an exact measure of the actual costs of the successful party.

Analysis

[13] I turn first to the issue of OHIP’s liability with respect to a cost award.

[14] The OHIP involvement in this matter arises because of the statutory requirement that the plaintiff maintain a subrogation claim on behalf of OHIP. Section 39(6) of RRO 1990 Regulation 552 under the Health Insurance Act sets out the basis for OHIP’s liability for cost awards in those situations.

[15] I am satisfied that the principle set out in DiBattista v. Wawanesa Mutual Insurance Co., 83 O.R. (3d) 302 (C.A.), is applicable here.

[16] In DiBattista Justice MacFarland stated that s.39(6) of Regulation 522 had no application where OHIP’s claim has not been assessed: “[t]here was no assessment of the claim and in these circumstances s.39(6) does not apply”.

[17] Although OHIP submitted that it withdrew its claim prior to trial, in fact I dismissed that claim in my partial summary judgment decision which I rendered prior to the commencement of trial. Nevertheless, there was no assessment of OHIP’s claim, and therefore s.39(6) is not applicable.

[18] As the formula is not applicable, I do not have to consider whether the principle of reasonableness requires that I depart from that formula.

[19] Had I been required to do so, I would have concluded that OHIP’s claim had no real impact upon the length, complexity or cost of the trial. Also, OHIP’s claim of $10,614.70 was insignificant in comparison to the plaintiff’s claim of $400,000.

[20] Under this principle, I conclude that it would be unfair and unreasonable to make a cost award against OHIP as it was not active in the proceeding, and it did not complicate or delay the proceeding.

[21] I dismiss the defendant’s claim for a cost award against OHIP.

[22] I turn now to the defendant’s cost claim against the plaintiff.

[23] The defendant asserts that it should receive costs on a substantial indemnity basis because it was successful, and obtained the best result it could have. Also, the damages assessed were well within the jurisdiction of the Small Claims Court.

[24] At a minimum, the defendant submits that it is entitled to costs on a partial indemnity basis from the commencement of the action (May 1, 2013) until the date of the service of its Offer to Settle (October 18, 2016) and on a substantial indemnity basis thereafter because the Offer to Settle was more favourable to the plaintiff than the result of the trial.

[25] The plaintiff asserts that Rule 49.10 does not apply to cost consequences when the plaintiff is wholly unsuccessful, and that in those cases the principles of Rule 57.01(1) apply: Stasser Ltd. v. Richmond Hill (1990) Ont. Ct. Appeal, paras. 4 and 11.

[26] Also, the plaintiff submits that substantial indemnity costs are only warranted by the operation of Rule 49.10 or where the losing party has engaged in behavior worthy of sanction: Davies v. Clarington (2009) Ont. Ct. Appeal, paras. 28 to 40.

[27] In fact, in Stasser Carthy J.A. awarded elevated costs from the date of the offer, stating: “That bonus should be related to the offer and its date and, based upon the general principles enunciated in r. 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”.

[28] As well, Justice Kershan in Dunstan v. Flying J. Travel Plaza, 2007 CarswellOnt 6806, at paras. 8 – 13, followed Stasser and concluded that he had the discretion to award costs on a substantial indemnity basis from the date of the offer forwards where the plaintiff did not recover a judgment of any value at trial.

[29] I am satisfied that the defendants Offer to Settle, although limited in monetary value, is an Offer to Settle under Rule 49, and is a factor in my consideration.

[30] I am satisfied that I have the discretion to make such an elevated cost award; however, such exercise of discretion must follow the principles of Rule 57.01(1).

[31] Those factors include:

(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 that an unsuccessful party could reasonably expect to pay in relation to a step in the proceeding for which costs are being fixed;

(a) the amount claimed and recovered in the proceeding; …

(c)the complexity of the proceeding; …

(e)the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding; …

(g)a party’s denial of or refusal to admit anything that should have been admitted.

[32] As I have already noted, the overriding principle that I must follow is that of reasonableness. What is a reasonable amount that should be paid to the successful party and not an exact measure of the actual costs of the successful litigant: Davies supra.

[33] Aside from the issue of the scale of the defendant’s costs, the plaintiff objects to several items in the defendant’s Bill of Costs.

[34] The plaintiff submits that the travel time should be excluded because local counsel would have been appropriate: Matheson v. CIBC Wood Gundy, 2014 NSSC 340, para. 6; whereas the defendant asserts that it was reasonable in the circumstances for Sears to utilize Ottawa counsel who have been on the case for years: Chevalier v. Active Tire & Auto Centre Inc., 2012 ONSC 5682, 2012 CarswellOnt 12498, at paras. 6-7.

[35] I am satisfied that it was appropriate for the defendant to utilize out of town counsel and that the travel time is a proper claim. The issues in play were of particular significance to the defendant as the operational procedure in question could impact upon all of the Sears stores located in the province.

[36] The plaintiff objects to certain dockets which she submits are either a duplication or for matters for which no cost award should be made. I am satisfied that there are small duplications and an item for which Justice Maddalena awarded no costs. Such items are well within the proposed adjustment to the cost award suggested by the defendant.

[37] Another relevant factor is the hourly rates charged by the defendant’s lawyers. Mr. Cummings has less than 10 years experience and charged $295 per hour, whereas the maximum hourly rate as per the note to the profession adjusted for inflation is $268.49. Mr. Switzer is in the 10 to 20 year category with a suggested maximum hourly rate of $357.99, whereas he charged $495. The maximum for clerks is $95.46 whereas the rate charged was $195.

[38] The rates charged do exceed the maximum recommended rates and is a factor in the exercise of my discretion.

[39] Another factor that the plaintiff submits is relevant is the extent that her Bill of Costs is less than the defendant’s Bill of Costs. She submits that this is an indication of what the unsuccessful party should reasonably be expected to pay.

[40] The defendant asserts that the plaintiff’s Bill of Costs does not accurately outline the plaintiff’s actual costs as it does not have detailed time dockets and omits several steps that counsel for the plaintiff would have undertaken. He suggests that it is a reconstruction of work and time spent, rather than an accounting made contemporaneously with the time spent.

[41] I agree with the defendant that the plaintiff’s Bill of Costs appears to be incomplete. However, it does indicate that the plaintiff could reasonably expect that the defendant’s legal costs were at least $176,350.48.

[42] The plaintiff urges me to consider that a cost award of $306,208.78 would bankrupt any ordinary citizen, and that even a cost award of $50,000 would cause great financial difficulty to the plaintiff, and would be contrary to the fundamental objective of access to justice: Balasundaram v. Alex Irvine Motors Ltd., 2012 ONSC 5840, paras. 40 and 48.

[43] The defendant cites a number of cases where the party’s financial situation or impecuniosity was not considered to be a factor in a cost award: Greenhalgh v. Douro-Dummer (Township), 2011 ONSC 2064, 2011 CarswellOnt 2397, at para. 36; Pilotte v. Gilbert, 2016 ONSC 1334, 2016 CarswellOnt 3468, at para. 11.

[44] The defendant notes that there is no evidence that the plaintiff is impecunious; rather there is evidence that she is employed and owns a home. Further, in the plaintiff’s Bill of Costs there is a disbursement for an adverse cost insurance premium. Unfortunately, I have no further evidence on this point.

[45] Where the plaintiff clearly has some type of adverse cost insurance, and has not advised the court of the nature and extent of it, it is disingenuous for the plaintiff to argue impecuniosity, or that even a $50,000 cost award would cause great financial difficulty to her. The failure to disclose fully her financial situation makes it impossible for me to properly consider that issue.

[46] In the circumstances, I am not prepared to consider the financial situation of the plaintiff or the impact of any cost award upon her.

[47] The plaintiff submitted that two defence counsel were not required. Given the initial amount claimed, $400,000, the length of the trial and the importance to the defendant with respect to operational procedures at all Sears stores, I find that having two counsel on this matter was appropriate.

[48] That takes me to the final and overriding principle, namely reasonableness. In all of the circumstances of this case, what is a reasonable cost award?

[49] This was a relatively straight forward case. The initial claim was $400,000, but prior to trial it was clear that the plaintiff had reduced her claim, both in nature and quantum. However, the plaintiff could reasonably have expected that the legal costs of the defendant were at least what her counsel would be charging her, namely $176,350.48.

[50] After considering all of the relevant principles, I find that a reasonable cost award is $200,000 fixed inclusive of HST. I order that the plaintiff pay to the defendant costs in the amount of $200,000.

Summary

[51] In summary, I dismiss the claim for a cost award against OHIP and award to the defendant costs in the amount of $200,000 which the plaintiff shall pay within 30 days.

Edwards J. DATE: April 26, 2017