CITATION: Duncan v Taylor 2017 ONSC 7445

Oshawa COURT FILE NO.: 85315/13

DATE: 20171215

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

David Duncan

Plaintiff

— and —

Charles Taylor

Defendant

COUNSEL:

Drew R. Sinclair for the Plaintiff,

Todd J. McCarthy for the Defendant

HEARD: November 20, 2017

Shaughnessy J.

REASONS FOR JUDGMENT ON COSTS

[1] This action was set for trial to proceed at the civil sittings, commencing November 20, 2017 at Oshawa, Ontario.

[2] On November 13, 2017, the plaintiff accepted the offer to settle made by the defendant dated October 6, 2017. The relevant terms of the defendant’s Offer to Settle are as follows:

(1) The defendant shall pay to the plaintiff the sum of $ 30,000 for all damages, net of the applicable deductible, net of any collateral benefits or statutory accident benefits received or available and inclusive of prejudgment interest under the Courts of Justice Act;

(2) The defendant shall pay to the plaintiff his partial indemnity costs, HST and disbursements to the date of this offer to settle, to be agreed upon or assessed/determined by the Court in the event that this offer to settle is accepted. (emphasis added).

Background Information

[3] By way of brief summary, the underlying facts and history of this proceeding are as follows. The plaintiff sustained serious injuries in a motor vehicle accident that occurred on January 4, 2013. He sustained multiple fractures throughout his pelvis requiring 8 screws and 3 plates to repair, multiple fractures to his lumbar spine, a fracture of his left ankle repaired with lag screws and internal injuries to his chest and bowel. While hospitalized he went into cardiac arrest resulting in a hypoxic brain injury. The plaintiff was limited by physical pain and restricted range of movement and some cognitive disorder as well as anxiety and depression. He was found to be “catastrophically impaired” for the purpose of accident benefits payable by his insurer.

[4] At the time of the accident the plaintiff was 61 years of age and working in furniture sales. His pre-accident annual earnings were in the range of $ 85,000 and he stated that he planned to work into his seventies. He had returned to work since the collision but at diminished hours and capacity. His present earnings are around $ 60,000 and he alleges that he will have to retire soon.

[5] In submissions made by counsel for the plaintiff, the Court was advised that the plaintiff received accident benefits and then settled his accident benefit claim for $ 385,000. In relation to damages the tort claim was then reduced to general damages and a past and future loss of income claim.

[6] However, the most significant issue was the liability/contributory negligence issue. The plaintiff made a left turn from a side street onto a through street directly into the path of the Defendant’s motor vehicle. The plaintiff was charged and convicted under the Highway Traffic Act with failing to yield the right of way.

[7] The defence brought a motion for summary judgment which was dismissed by Justice Glass with Reasons on November 18, 2015.

[8] There were 3 Collision/Reconstruction reports that are relevant to this cost proceeding. The dates of the reports are also significant.

(a) Metropolitan Toronto Police Reconstruction Report dated January 4, 2013;

(b) MEA Forensic Engineering Report obtained by the plaintiff and dated November 9, 2015;

(c) 30 Forensic Engineering Report obtained by the defendant dated September 18, 2017.

[9] I note that the MEA Forensic Report obtained by the plaintiff played a significant role in the Reasons of Justice Glass dated November 18, 2015. In brief summary the MEA Forensic report concluded from engineering calculations that the defendant was travelling 48 to 66 km/h in a 60 km/h speed zone prior to the collision and had 3-4 seconds to react to the plaintiff’s manoeuver at the point of impact. In his Reasons, Justice Glass, on the summary judgment motion, held there was “conflicting evidence ….whether the Defendant was speeding….whether the Defendant had the last clear chance to avoid the accident, expert accident reconstruction evidence (sic).” (para. 11). Accordingly, Justice Glass ruled that there was a genuine issue to be decided and the motion for summary judgment was dismissed.

[10] The parties proceeded to mediation on December 9, 2016. By the time of mediation, counsel for the plaintiff states that it had served all expert reports such that the plaintiff’s disbursements totaled $ 121,045.00. The only offer advanced by the defendant at the mediation was to pay the plaintiff’s disbursements of $ 121,045.

[11] I am advised that this action then came before me on a pretrial conference on February 9, 2017. I have no personal recollection of this case or the discussion that took place at the pretrial due to the sheer volume of cases in which I conduct pretrials annually. I accept that I made a recommendation at the pretrial that the case should be settled for $ 150,000 plus costs having regard to the fact that there was no engineering report obtained by the defendant contesting the conclusions in the MEA Forensic Report dated November 9, 2015.

[12] Counsel for the plaintiff contends that the plaintiff’s claims assessed into the range of $ 750,000. Since I do not have an independent recollection of the pretrial, I am unable to comment. Suffice to say, counsel for the plaintiff acknowledged that there was certainly contributory negligence up to 75% on the plaintiff. The plaintiff had made a left turn from a side street onto a through street directly into the path of the defendant’s vehicle.

[13] On February 13, 2017 an Offer to Settle was delivered by the plaintiff in the amount of $ 100,000 plus costs. Net of the applicable statutory deductible, the net amount for the plaintiff pursuant to this Offer would be approximately $ 62,600.

[14] In the sequence of events the 30 Forensic Engineering Report dated September 18, 2017 was obtained by the defendant and served on the plaintiff. While neither counsel made any submissions relating to this report I nevertheless reviewed it as found in the plaintiff’s brief on costs. I do not propose to outline the report however its conclusions included a convincing determination that the plaintiff’s engineering report “relied upon an impact severity determination that is too high, leading to an overestimation of the impact speed of the [defendant].” Indeed the 30 Forensic Engineering Report found that the Defendant was travelling slightly under the speed limit at impact.

[15] The defendant then delivered an Offer to Settle dated October 6, 2017, the relevant provisions are outlined above.

Issues to be Decided

[16] (a) What is the appropriate reasonable amount for fees up to the date of the offer to settle of October 6, 2017?

(b) What is the appropriate reasonable amount for disbursements up to the date of the offer to settle of October 6, 2017?

Positions of the Parties

[17] The Plaintiff seeks partial indemnity fees of $ 81,278.00 and disbursements of $ 121,045.00. The total costs award sought by the plaintiff is $ 202,323.00.

[18] The Defendant submits that costs should be reasonably awarded in the total amount of $ 55,000.00.

Analysis

[19] In the course of submissions counsel for the plaintiff acknowledged that costs were awarded to the plaintiff in relation to the summary judgment motion in the amount of $ 9,000. Therefore the fees that the plaintiff seeks are reduced to $ 72,278.00.

[20] Interestingly, both counsel rely on the very recent decision in Cobb v. Long Estate, 2017 ONCA 717 in support their respective positions on costs.

[21] In the Cobb case, following a chronic pain 19 day jury trial where the actual net recovery of the plaintiff was $ 22,136.60 (as corrected by the Court of Appeal) the trial judge awarded costs to the plaintiff in the amount of $ 409,098.48. An issue in the Appeal was whether an amendment to s. 267.5(9) of the Insurance Act effective August 1st 2015 was to be taken into account. The Court of Appeal reversed the trial judge and held that the amendment should be taken into consideration. The amendment of August 1st 2015 provides that in any loss or damage from bodily injury or death from the use or operation of an automobile, “the determination of a party’s entitlement to costs shall be made with regard to the effect of paragraph 3 of subsection (7) on the amount of damages, if any awarded for non-pecuniary loss.”

[22] In Cobb v Long Estate Justice MacFarland held (para. 154) that the trial judge’s assessment of costs “at approximately $ 409,000 on a judgment of $ 22,136.60, (or $34,000 as the trial judge found) is out of all proportion and cannot stand. This was a chronic pain case. These sorts of cases are never a sure thing from the plaintiff’s perspective.” Further, at para [159] the Court stated:

On any proportional basis, the plaintiff’s costs, even taking the defence offer out of the equation for the moment, could not have been expected to exceed approximately $ 200,000, given the results achieved.

[23] The plaintiff relies on the decision in Cobb and states that fees and disbursements of $ 202,323 is proportionate to a $ 30,000 net recovery. The plaintiff references Cobb at para. [159] to fashion this argument. I do not find that this argument is persuasive and it ignores the fact that the Cobb case involved a 19 day trial. The plaintiff also submits that the Cobb decision makes no reference to disbursements incurred and therefore it is silent on the reasonableness of disbursements incurred. Again I find that this argument is not persuasive. The principles of what is reasonable, fair and proportional equally apply to disbursements which form part of the costs to be assessed or fixed. However, as will be discussed below, the entire proceedings have to reviewed and the timing of offers to settle is relevant in a determination of what is a reasonable and fair in an award of costs.

[24] The defence submits that proportionality is the defining principle of the Court of Appeal decision in Cobb v Long Estate. However, I find that proportionality has always been a factor for the Court to assess either under the factors in Rule 57.01(1) (O.a)(O.b) and (a) or under Rule 58.06 (a) and (h). However “proportionality” is but one factor for the Court to consider in assessing costs.

[25] The defence suggests that the Court of Appeal in the Cobb case is telling litigants that “they should not run up the costs” in cases where liability is a real issue. The defence suggests that this rationale should equally apply to acceptance of offers to settle. The defence points to the Police Reconstruction report dated January 4, 2013, the Highway Traffic Act conviction, the independent witness statement and submits that there was a serious potential for a jury to award no damages or on the best day for the plaintiff 75% to 90% contributory negligence on the plaintiff. The weakness of this argument, in part, is that it ignores that the plaintiff did obtain the MEA Forensic Engineering Report dated November 9, 2015 which, standing alone on its face, supported some negligence on the defendant in relation to excessive speed and the last chance to avoid an accident. I find that the plaintiff cannot be expected to accept the Police Reconstruction report as conclusive. The further investigation and conclusion by MEA Forensic Engineering gave oxygen to the plaintiff’s claim. The disbursement incurred for this expert engineering report is $21,182.60. Once the Defendant chose to obtain its engineering report dated September 18, 2017, which undermined the plaintiff’s engineering expert report, the plaintiff states that it had already incurred the disbursements claimed. The plaintiff then accepted the defendant’s Offer to Settle dated October 6, 2017.

[26] The expert reports account for $ 78,247 plus HST of the amount claimed for disbursements.

[27] Mr. McCarthy for the defendant did not provide any factum on this assessment. In the course of submissions he stated that the plaintiff had incurred an additional $ 6,650 in disbursements for actuarial and medical reports on October 19/17 after the offer to settle. I have reviewed the solicitors fees statement and disbursements updated to October 10, 2017 and I can find no reference to the items that Mr. McCarthy is relying on. If I am wrong, then Counsel may submit what relevant document he is referencing and the parties can arrange to speak to me concerning this issue by way of a conference call to be arranged with my judicial assistant.

[28] I was referred to the decision in Elbakhiet v Palmer 2014 ONCA 544 wherein Justice Rosenberg outlined the principles of a proper cost award. This case involved the application of Rule 57.01 and Rule 49 Offers to Settle. He outlined the need for “fairness and reasonableness” and “proportionality” in fixing costs.

[29] The Offer to Settle, which the plaintiff accepted, indicates that costs are to be “assessed/determined.” I am mindful that I am assessing costs and therefore the factors I am to consider are governed by Rule 58.06 whereas Rule 57.01 provides some of the factors that apply in fixing costs. However after due consideration, I find that the result I arrive at would be the same under either Rule.

[30] I do not find any “running up the costs” as suggested by counsel for the defence. In reviewing the plaintiff’s summary of all work completed on the file there is very little trial preparation except for brief entries by a law clerk in the months of February, March, June, July and August 2017. There was no trial preparation by any plaintiff’s counsel.

[31] Counsel for the plaintiff and the defendant made reference to the factors to be considered under Rule 57.01 which I have reviewed. In relation to the amount claimed and the amount recovered the plaintiff submits that he “hoped to recover an amount in the range of $ 100,000 to $ 375,000” and that counsel assessed the claim for damages “at over $ 750,000.” While I have no recollection of the judicial pretrial, nevertheless, the very significant amount of evidence related to the plaintiff’s contributory negligence capped by the 30 Forensic Engineering Report of September 18, 2017 clearly indicates that counsel for the plaintiff were trying to salvage some “minimal recovery” for the plaintiff.

[32] The case was not unduly complex and having 3 lawyers plus a law clerk working on the file appears to be excessive when one considers the obvious liability hurdle from the date of the accident. In submissions to the Court, counsel for the plaintiff advised that at least 1/3 of the hours incurred by Mr. Troy Lehman and for which the plaintiff claims the total sum of $ 39,854 by way of partial indemnity costs was spent on the Summary Judgment motion. However, as counsel acknowledges the plaintiff was compensated with a cost order in the amount of $ 9,000 for this item.

[33] I also noted that a significant amount of time was charged for work done and attendances to respond to the Highway Traffic Act charge in which the plaintiff was found guilty.

[34] Therefore after considering all the factors in assessing costs, in the end it comes down to a determination of what is “fair and reasonable” and “proportionate” to the amount recovered. This requires a review of the entire proceedings including when expert reports were obtained and delivered and the timing of Offers to Settle, I find that the claim for partial indemnity fees in the amended amount of $ 72,278 is not proportional to what the plaintiff recovered in this proceeding. Therefore, I reduce and fix the amount for fees to $30,000.00

[35] In relation to the disbursements incurred in the amount of $ 121,045.00 to the date of the Offer to Settle, I note that counsel for the defendant did not dispute any of the items claimed as disbursements save and except the possible outstanding matter referenced in para. [27] above. Counsel for the defendant did submit that the disbursements should be substantially reduced by reason of “proportionality.” If the Defendant had obtained the 30 Forensic Engineering report at a much earlier stage in the proceeding and had then delivered a timely Offer to Settle, the result in relation to disbursements costs would be much different. If the plaintiff had continued to incur expert reports after the defence engineering report and after a strategic defence Offer to Settle then I would have not allowed the disbursements subsequently incurred. However that is not what transpired here. Based on the facts, the plaintiff continued to obtain relevant expert reports in relation to liability and damages only until the Offer to Settle of October 6, 2017 was delivered. Therefore I find no reason to reduce the disbursements claimed (save and except the issue detailed in para. [27]). The Plaintiff has the onus of proving damages notwithstanding the issue of contributory negligence. In the result, the plaintiff’s disbursements are assessed at $ 121,045.00 which I find were reasonable and necessary.

[36] In summary, I order costs fixed in the total amount of $ 151,045.00 payable by the defendant to the plaintiff.

[37] Success on this application is divided and therefore I order no costs.

The Honourable Mr. Justice J. Bryan Shaughnessy

DATE RELEASED: December 15, 2017

Oshawa COURT FILE NO.: 85315/13

DATE: 20171215

ONTARIO

SUPERIOR COURT OF JUSTICE

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

David Duncan

Plaintiff

— and —

Charles Taylor

Defendant

REASONS FOR JUDGMENT ON COSTS

The Honourable Mr. Justice J. Bryan Shaughnessy

DATE RELEASED: December 15, 2017