Court File and Parties

CITATION: Healthcare Insurance Reciprocal of Canada v. Royal and Sun Alliance Insurance Company of Canada, 2017 ONSC 6653

COURT FILE NO.: CV-14-516920

HEARD: 20171027

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Healthcare Insurance Reciprocal of Canada, HIROC Management Limited and Factory Mutual Insurance Company, Applicants

AND:

Royal and Sun Alliance Insurance Company of Canada, Respondents

BEFORE: Master B. McAfee

COUNSEL: Rory Barnable, Counsel for the Applicants

Daniel Bassili, Counsel for the Respondents

HEARD: October 27, 2017

Supplementary REASONS FOR DECISION - Costs

[1] Pursuant to the consent order of Justice Spence dated March 31, 2015, a reference was ordered in the within application brought by the applicants Health Care Insurance Reciprocal of Canada (HIROC), HIROC Management Limited (HML) and Factory Mutual Insurance Company (FM) (collectively the applicants) against Royal and Sun Alliance Insurance Company (RSA) as respondent.

[2] The reference proceeded before me for all or part of four days. My decision was released on June 27, 2016 (2017 ONSC 3529). The parties attended before me on October 27, 2017, to settle the report and address the issue of costs of the reference.

[3] Subject to my disposition on costs, the parties confirm that they now agree to the form of the report provided to the court on October 27, 2017.

[4] The respondent seeks full indemnity costs in the all-inclusive amount of $42,709.40. In the alternative, the respondent seeks partial indemnity costs in the all-inclusive amount of $35,000.00.

[5] The applicant submits that costs of the reference should be reserved to the Judge who will be addressing the report back/confirmation of the report. The applicant opposes confirmation of the report. In the alternative, the applicant submits that costs of the reference should be fixed in the all-inclusive sum of $10,500.00 and that the issue of which party is to pay the costs should be reserved to the Judge addressing the report back/confirmation of the report.

[6] The applicant submits that a reference is similar to an interlocutory injunction. The applicant submits that costs of an interlocutory injunction are often left to the trial Judge who makes a final determination of the rights of the parties (Accreditation Canada International v. Guerra, 2016 ONSC 6184 (S.C.J.)). The applicant argues that because the report is subject to report back/confirmation, the report is not a final determination of the matter and costs ought to be reserved to the Judge who will address the report back/confirmation of the report. I disagree.

[7] I have adjudicated on the matter, subject to report back/confirmation. In my view, having presided over the four day reference and the initial hearing for directions, I am in the best position to determine costs of the reference, subject to report back/confirmation. Having heard the reference, I am satisfied that I am in a position to do procedural and substantive justice in fixing the costs at this time (Murano v. Bank of Montreal, 1998 ONSC 5633 (C.A.) at para. 88).

[8] I am not satisfied of any basis to award full indemnity costs. There is no conduct on the part of the applicant that would warrant such an award. There were no submissions concerning any offers to settle. To the extent that the respondent argues that low hourly rates entitle the respondent to costs on this scale, I disagree. As stated in Moosa v. Hill Property Management Group Inc., 2010 ONSC 13 (S.C.J. – Master) at para. 80, citing Justice Nordheimer in Lawyers’ Professional Indemnity Co. v. Geto Investments Ltd., [2002] O.J. No. 921 (S.C.J.) at para. 16:

As a further direct consequence of the application of the indemnity principle, when deciding on the appropriate hourly rates when fixing costs on a partial indemnity basis, the court should set those rates at a level that is proportionate to the actual rate being charged to the client in order to ensure that the court does not, inadvertently, fix an amount for costs that would be equivalent of costs on a substantial indemnity basis when the court is, in fact, intending to make an award on a partial indemnity basis.

[9] The respondent was successful on the reference. I am satisfied that the respondent is entitled to costs on a partial indemnity basis.

[10] With respect to the quantum of costs, the applicant argues that the respondent’s conduct forced the reference to proceed. The applicant argues that the respondent made no attempt to agree on the amount of the claim within 30 days as ordered, on consent, by Justice Spence. There was no attempt to resolve the reference from either side during the 30 day period. The applicant did know the respondent’s position on quantum before the four day reference commenced. As noted above, no offers to settle were referred to. Based on the material before me neither side made an effort to resolve the matter in advance of the hearing.

[11] The applicant’s costs outline is in the all-inclusive sum of $28,079.40.

[12] I have considered the material before me and the submissions of the parties. Having regard to all of the circumstances of this matter and the success of the respondent on the reference, in my view a fair and reasonable amount that the applicant could expect to pay for costs on a partial indemnity basis is the all-inclusive sum of $28,000.00.

[13] The parties agree that these costs are not payable at this time and are subject to confirmation.

[14] I have signed the report, as amended, to include my disposition on costs.

Master B. McAfee

Date: November 6, 2017