CITATION: Jeremy Josey v. Joshua Trebych. et al, 2017 ONSC 6420
COURT FILE NO.: 12-33613
DATE: November 3, 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JEREMY JOSEY
D. Robert Findlay For the Plaintiffs
- and -
JOSHUA TREBYCH
Mary A. Teal For the Defendant
The Honourable Mr. Justice H.S. Arrell
JUDGMENT ON COSTS
INTRODUCTION:
[1] This was a personal injury action arising out of a motor vehicle accident which occurred on December 11th, 2011. This matter was fixed for a long trial commencing October 10th, 2017 for 4 - 5 weeks in Hamilton with a jury.
[2] On October 5th, 2017, my office was advised that this matter had settled on the afternoon of October 4th. The settlement was on the basis of the defendant accepting the plaintiff’s offer, which was made in March of 2017, in the amount of $775,000.00 plus interest, costs, HST and disbursements. It was agreed by the parties that the defendant would pay partial indemnity costs up to the date of service of the offer and substantial indemnity costs from then to the date of acceptance of the offer on October 4, 2017.
[3] The parties were unable to agree on costs; however, they did agree to provide me with written submissions on the cost issue. I have received those submissions along with draft bills of costs and books of authorities of both parties which I have reviewed. The parties also appeared before me and provided oral submissions. This is my decision.
FACTS:
[4] This appears to have been a straightforward motor vehicle accident where liability on the defendant was relatively clear although a seatbelt defence was in issue. The defendant never admitted liability although requested to do so on several occasions. The defendant did however agree to admit liability if the plaintiff kept his claim within policy limits. The plaintiff refused to do that.
[5] The matter is now approximately 6 years old. The plaintiff was 19 at the time of this accident. His claim was significant with orthopaedic injuries to his hand, facial fractures and some cognitive issues. He was in hospital for a number of weeks and had three surgeries. It is likely he will have a further surgery in the next 5 – 10 years.
[6] Requests were made for advance payments however were refused by the defence. The plaintiff filed a Request to Admit under Rule 51.02. There was no response to the Request to Admit. As the matter was not tried, it is difficult to know if a fact or document listed in the Request would have subsequently been proved at the hearing. Likely many would have been.
[7] The plaintiff made some offers which were not accepted until the last one which was accepted 7 months after it was made and 6 days before trial. The defendant’s response that the plaintiff was unwilling to negotiate is difficult to understand as offers were made and eventually accepted. The Defence also made offers which were not accepted, the highest which was $600,000.00.
[8] This litigation went through the usual discoveries of approximately one day, mediation which failed, some motions, and several pre-trials and case conferences with the RSJ Office. I accept that this was a relatively large case with general damages being assessed at $200,000.00 by the parties; past income of $200,000.00; and $375,000.00 for future loss of income plus interest.
[9] The defendant raised mitigation in failure to retrain as a defence throughout the litigation.
[10] The plaintiff claims approximately $61,000.00, up to the date of the offer of March 14th, 2017 on a partial indemnity basis. Thereafter the plaintiff claims $185,000.00 on a substantial indemnity basis to the date of acceptance of the offer for total fees of $246,000.00 plus HST of $32,000.00 and disbursements of $157,500.00. All numbers being rounded by me.
[11] The defence indicated that it generated full indemnity fees of approximately $68,500.00 plus HST and spent 312 hours on the file. While the plaintiff spent 787 hours.
ANALYSIS:
(a) FEES:
[12] The defendant argues that the plaintiff’s claim for costs is excessive given the facts and circumstances of this file. The defence also, quite correctly, points out that substantial indemnity costs under the Practice Direction to the Profession, effective July 1st, 2005, was regarded as 1.5 times the partial indemnity costs and has never been considered complete indemnity: See Akagi v. Synergy Group (2000) Inc., 2015 ONCA 771 at para.57.
[13] The defendant also urges me to find that with inflation taken into account, the amounts claimed per hour, on a partial indemnity basis, by the plaintiff based on the Practice Direction Cost Grid of July 1, 2005 are excessive. For example, law clerks should bill at $100.00 per hour rather than $165.00 being claimed. Mr. Sprung, a three year lawyer, claims $180.00 per hour, which should be $130.00 under the cost grid. And Ryan Findlay claims $240.00 per hour, which under the costs grid should probably be approximately $150.00 per hour.
[14] The defence also urged me to find that excessive time has been spent, for example, two individuals at discovery, three individuals at the pre-trial, and three individuals on teleconferences before me. I would agree that would seem to be unnecessary.
[15] The defence also argues that two individuals billed close to 60 hours to prepare and attend at discoveries which took just over 6 hours. This is a case that from the plaintiff’s point of view, even though liability was not admitted, it was not really an issue. I accept this would appear to be excessive.
[16] The defendant argues that the plaintiff retained excessive medical practitioners to prepare reports such as two expert orthopaedic surgeons, in addition, to treating orthopaedic surgeons. The plaintiff had several focus groups and time spent dealing with those. It would appear that 500 hours were spent by the plaintiff’s law firm in trial preparation which the defendant argues is unjustified and excessive given the facts of this case. I agree.
[17] The plaintiff argues that all of the preparation was necessary. The defendant had not admitted liability. There was a seatbelt defence at issue. This was a complicated Motor Vehicle injury case and the work put into the file was necessary and proved to be correct with the defendant accepting the plaintiff’s offer at the last minute.
[18] I accept the argument that some of the hourly rates claimed by the plaintiff are over and above the cost grid on a partial indemnity basis. I accept as well that there has been some duplication on counting some of the various items. I therefore reduce the partial indemnity costs payable to $45,000.00 up to the date of the offer in March of 2017.
[19] Likewise the substantial indemnity rates being claimed by the plaintiff are in excess of the cost grid after being adjusted for inflation. There appears to be some double counting after the offer date. I reject the defence argument that the hourly rates are somewhat higher than the defence is able to charge its own client. That is the nature of the work done by the insurance bar and their choice to accept it. A more realistic hourly rate is the cost grid.
[20] I recognize that the plaintiff’s hours are a little over twice that of the defence. Although I have taken that into account, I do not find it a significant factor. The plaintiff has had the file from day one, while the defence usually gets the file much farther down the road with much of the investigation and preparation done by its retaining insurance company. I also accept that there is more hands on work preparing the plaintiff’s case then with a defence case. Finally the plaintiff has the onus of proving the case.
[21] I do accept that 500 hours for trial preparation is excessive and does include time for certain items like focus groups that are not recoverable.
[22] I have reviewed Rule 57 of the Rules of Civil Procedure which sets out the general factors to be considered by the court in exercising its discretion in relation to costs. I have reviewed those factors. I have also considered proportionality and all the other circumstances involved in this litigation.
[23] I have also considered S.131 of the Courts of Justice Act which provides that:
“costs incidental to 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.”
[24] The plaintiffs were clearly successful in this litigation. The defendant accepted the last offer of the plaintiff at the last moment, even though it had been outstanding for seven months. The amount of that offer was substantial at $775,000.00. It is significant that this matter resolved only a few days before a long and somewhat complicated personal injury jury action was to commence. I acknowledge the submission of the defendant that the offer became more attractive following the Court of Appeals recent decision on interest.
[25] I accept the defendant’s argument that the fees being charged are somewhat excessive, and that some hourly rates are above the practice direction cost grid. I also accept that there was some duplication of work.
[26] The Court of Appeal has stated that the overriding principle for a court in exercising its discretion when awarding costs is reasonableness as was stated in Davies v. Clarington (Municipality) 2009 ONCA 722, [2009] 100 O.R. (3rd) 66 (OCA) at paras. 51 and 52:
[51] In Andersen v. St. Jude Medical, Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508, 264 D.L.R. (4th) 557 (Div. Ct.), the Divisional Court set out several principles that must be considered when awarding costs [at para. 22]:
(1) 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 [page 79] Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638, [2005] O.J. No. 160 (C.A.). (2) A consideration of experience, rates charged and hours spent 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 Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. No. 4495, 118 A.C.W.S. (3d) 341 (C.A.), at para. 4. (3). 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). (4) 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 v. Bank of Montreal (1998), 1998 5633 (ON CA), 41 O.R. (3d) 222, [1998] O.J. No. 2897 (C.A.), at p. 249 O.R. (5) The court should seek to balance the indemnity principle with the fundamental objective of access to justice:
[52] As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding. At para. 37, Armstrong J.A. said "[t]he 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".
[27] As noted by Armstrong J.A. in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3rd) 291 the fixing of costs involves more than merely a calculation using the hours docketed and the cost grid. He further stated in para. 24,
“In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.”
[28] I have concluded that costs on a substantial indemnity basis for this case should be fixed at $125,000.00 for a total of solicitor and client fees of $170,000.00 plus appropriate HST. I conclude this is an amount that is fair and reasonable to both parties and an amount that the defendant would have expected to pay 6 days before trial.
(b) DISBURSEMENTS:
[29] The defendant takes issue with the amount of disbursements being claimed by the plaintiff which total $157,459.07.
[30] The defendant argues that the disbursements are excessive and some ought not to be recovered while others ought to be reduced. The defendant proposes that reasonable disbursements would be $61,394.79 inclusive of HST.
[31] The plaintiff argues that all of the disbursements were necessary for the proper preparation of this case for trial, especially as the defendant was disputing both liability and damages.
[32] The defendant disputes the amount claimed as treatment in excess of accident benefits. I agree this is a head of damage, and is not a disbursement, and will be disallowed.
[33] Four motions were brought with the consent of the defendant to get various records. Costs, of course, were not requested from the third parties. The documents were shared with the defendants and were required for the litigation. I see no reason that the cost of bringing these motions would not be a proper disbursement to the winning party of the litigation.
[34] The defendant objects to the amount claimed by Ross Rehabilitation totalling $25,826.00 arguing some of that amount is for treatment and some for reports never served on the defendant. I agree with the defendant’s submission and that disbursement is reduced by $13,397.50.
[35] The defendant objects to preparation time by Ross Rehabilitation for attendance at the Arbitration hearing. I disagree. See; Carr v. Modi, 2016 ONSC 7255 (Div. Ct.) at paras. 14 and 15.
[36] Objection is taken to the High Impact Digital Image disbursement as different from the invoice amount. I accept the plaintiff’s explanation that the invoice was in American funds and the disbursement reflects the exchange rate to Canadian funds. The defendant also objects that this material was short served and may not have been admissible. That would be an argument before the trial judge. The fact remains that the disbursement was incurred and produced to the defence. This video depicts the actual type of surgery that the plaintiff underwent. It may well have assisted the jury in understanding the plaintiff’s case subject to the rulings of the trial judge after taking into account the defendant’s objections. I will allow this disbursement, however, the amount being claimed is excessive given the likely probative value, the short service, and the risk it may not have been admitted. I reduce this disbursement by $7,000.00.
[37] The plaintiff requested that his two medical experts review the video for accuracy. The defendant argues that since these demonstrative aids were inadmissible, without leave of the court, as they were not served in time and therefore the Doctors disbursements to review them are likewise not valid. I disagree. In any event the plaintiff had to make sure this video was accurate to face the admissibility argument before the trial judge. As such I accept that these were legitimate disbursements. However, the amount claimed by Dr. Choi of $1750.00 compared to Dr. Fung of $350.00 is excessive and is reduced by $1000.00.
[38] I reject the defendant’s arguments regarding the economic loss reports as inadmissible as short served and therefore not valid for the same reasons as set out in paragraphs 36 and 37. As well this economist put a value to the defendant’s expert report on future care needs and updated the previous report.
[39] I accept the plaintiff’s explanation regarding Encore Investigations as necessary to interview witnesses both regarding damages and liability since the defendant was admitting neither. In addition the will say statements were provided to the defendant summarizing the evidence of these witnesses.
[40] I also accept the explanation for Whitehall Investigations as a disbursement that was reasonable and necessary to find witnesses who had moved.
[41] I accept the transportation cost from Rapid City as reasonable for the plaintiff to attend hospital to see Dr. Petrisor and have imaging done.
[42] The plaintiff claims $7,500.00 for three focus groups. I agree with Henderson, J. in Molinaro v Bamford, 2011 ONSC 7240 that this is not an assessable disbursement and not something the defence should be expected to pay. The disbursements will be reduced by this amount.
[43] I accept the explanation of the plaintiff that the report dated March 22, 2016 was produced for the tort action as the AB file had been closed. I do not accept that 13 hours were required by the physio therapist to review the file in preparation for trial. Two hours would have been more than sufficient. I also agree that there has been duplication to the physio invoices. That disbursement is reduced by $2848.00.
[44] I agree there has been duplication of disbursements of Dr. Petrisor for trial preparation and this is reduced by $789.00. I accept that there was further preparation on September 25, 2017 as explained by plaintiff’s counsel in his submissions.
[45] The defendant objects to the crash test video as it has no probative value as it is inaccurate by depicting a front end crash with a stationary object while the case at bar involved two vehicles in a broad sided type of collision. I agree, for this reason and the other reasons made by the defence in their submissions. This disbursement of $1,300.00 is disallowed.
[46] The defendant objects to various fees such as storage and filing, postage, photocopies, scans, couriers and faxes as both excessive and part of general overhead of a law firm. I agree with Bank of Montreal v. Binder (2005), 20 C.P.C.(6th) 383 (N.S. Sm. Cl. Ct.). and Sovani v. Jin (2006), 37 C.P.C (6th) 292 (BC). I therefore arbitrarily reduce this amount by 50% or $2496.00.
[47] The defendant objects to two orthopaedic surgeons being retained by the plaintiff to provide reports. I agree. I have eliminated the disbursements of Dr. Karabatsos of $7,577.00, as plaintiff’s counsel indicated in his pre-trial brief that Dr. Petrisor was stated to be the orthopaedic expert being called.
CONCLUSION:
[48] The plaintiff’s disbursements are reduced by $51,911.00 plus HST on that amount of $6,748.00 which leaves the total amount for disbursements fixed at $98,800.00 inclusive of HST.
[49] The amount payable for fees is fixed at $170,000.00 plus HST.
Arrell, J.
Released: November 3, 2017
CITATION: Jeremy Josey v. Joshua Trebych. et al, 2017 ONSC 6420
COURT FILE NO.: 12-33613
DATE: November 3, 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JEREMY JOSEY
- and -
JOSHUA TREBYCH
JUDGMENT OF COSTS
HSA