CITATION: Savage v. Cathers, 2017 ONSC 7591
LINDSAY COURT FILE NO.: 072/13
DATE: December 18, 2017
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
James Savage and Jeanette Savage
Plaintiffs
– and –
Kevin Wolf, Litigation Administrator for the Estate of Courtney Taylor Cathers, Deceased
Defendant
David F. MacDonald and Ian Furlong, for the Plaintiffs
W. Colin Osterberg, for the Defendant
HEARD: December 14, 2017
SALMERS, J.
RULING ON COSTS
[1] Just prior to the commencement of the trial in this action, the parties settled the plaintiffs’ claims.
[2] The terms of the settlement were that the defendant would pay to the plaintiffs $732,835 for damages and pre-judgment interest. Costs were not settled. A hearing was scheduled before me to fix costs of the proceeding. The parties made written and oral costs submissions. This is my costs ruling.
[3] The plaintiffs are requesting costs of partial indemnity legal fees of $353,269.47 plus $45,925.03 HST. Additionally, the plaintiffs request disbursements of $173,108.90 (inclusive of HST).
[4] The defence position is that the fair and reasonable amounts that should be fixed for the plaintiffs’ costs are $225,000 plus HST for legal fees, and $140,000 (inclusive of HST) for disbursements.
[5] This was a case in which liability should never have been an issue. The plaintiffs were injured when the defendant lost control of her car on Highway 35 and it crossed over into the plaintiffs’ lane, colliding full-speed and head-on with the plaintiffs’ car. The defendant was killed and both plaintiffs each suffered very significant injuries, including multiple broken bones and lacerations, one of which ultimately led to the amputation of the elderly male plaintiff’s right leg.
[6] There were no offers that engaged Rule 49. Accordingly, the parties agree that the plaintiffs are entitled to their partial indemnity costs.
[7] However, the plaintiffs made offers to settle in 2015. A further plaintiffs’ offer was made during or just after the October 2017 pre-trial. The defence made no offers to settle until November 8, 2017, only two weeks before the trial of the action was scheduled to begin. Following that offer, a flurry of offers were exchanged, leading to the settlement of the action on November 23, 2017.
[8] The action settled within two weeks of the defence making its first offer to settle. During his submissions at this costs hearing, defence counsel stated that he was unaware of why the defendant made no offer to settle until November 8, 2017. Apart from the fact that the trial was to proceed in November 2017, there were no evidence or submissions that between October 2015 and November 8, 2017: 1) there were unknown or unascertained facts that necessitated delaying resolution of this action; and 2) that anything of relevance to liability or damages in this case changed other than the elderly male plaintiff became older and, therefore, closer to death. After October 2015, there was no reason for the defence to delay making an offer to settle. The action may have settled earlier, and with fewer legal costs to all parties, if the defence had not waited so long to make its first offer to settle. Parties are encouraged to try to settle claims rather than to put parties to unnecessary legal costs and to delay payment of meritorious claims. The plaintiffs were required to take every step necessary to prepare for trial because the defence gave no indication that they were interested in settlement until less than two weeks before the date set for commencement of the trial. This is a factor that must be considered when fixing the plaintiffs’ partial indemnity costs.
[9] Although liability was obvious from the outset, the defence never admitted liability and accepted responsibility for the accident. The defence said that was because the plaintiffs’ claims exceeded the insurer’s policy limits. But, at this costs hearing, defence counsel quickly conceded that should not have been an impediment. There was no evidence or submission that insurer’s counsel spoke with the defendant’s estate trustee about the policy limits issue. In fact, defence counsel acknowledged that the defendant’s estate trustee was only contacted in preparation for this costs hearing. Further, there was no evidence or submission that the defence asked plaintiffs’ counsel to reduce their claim to within policy limits so that liability could have been admitted. During submissions at this costs hearing, defence counsel conceded that in hindsight perhaps the insurer should have admitted liability.
[10] If there had been a clear and early admission of liability, as there could and should have been, the plaintiffs would have avoided many fees and costs, including a very expensive accident reconstruction report which I find was reasonable and necessary for the plaintiffs to obtain in view of the defence position. The failure to admit liability early in such an open and shut case unnecessarily increased the plaintiffs’ costs and, if the trial had proceeded, would have unnecessarily lengthened the trial and the plaintiffs’ trial costs.
[11] Also, the post-accident condition and care costs of the male plaintiff were significant issues in this case. In keeping with its hardline taken throughout the action, the defence position on these issues was contrary to at least one of its own experts. Again, this put the plaintiffs to unnecessary costs to prepare to counter the defence position that was contrary to its own expert.
[12] Finally, for some unknown reason, the defence filed a counterclaim. In the circumstances of this case, where liability was never an issue, and indeed should have been admitted at the outset, the issuance of a counterclaim only unnecessarily added to the plaintiffs’ costs.
[13] The total amount requested for costs is between 75 per cent and 80 per cent of the amount recovered. Considering the amount of the settlement, the defence submitted that the amount of costs requested was disproportionate to the amount of recovery. To assist in considering proportionality, cases have commented that the range for partial indemnity costs is between 60 –65 per cent of the amount recovered. However, that suggested range is not determinative. After consideration of the other Rule 57.01 factors, partial indemnity costs may be higher or lower than the suggested range. Further, while proportionality is always a factor, where, as in this case, the defence position and conduct unnecessarily caused the plaintiffs to take many steps, the importance of proportionality as a costs factor is reduced, perhaps significantly. However, proportionality remains a factor that must always be considered when assessing and fixing costs.
[14] While defence counsel’s hourly rates were lower than those of plaintiffs’ counsel, the hourly rates charged by the plaintiffs’ lawyers are in accordance with rates commonly seen by me for actions of this type.
[15] Without time dockets, it cannot be determined whether any of the work performed by various of the plaintiffs’ lawyers was duplicative. Also, the plaintiffs refused to produce their retainer agreement, saying that solicitor-client privilege prevented production. Instead, plaintiffs’ counsel said that the retainer agreement was extremely similar to a retainer agreement in a case that was submitted to me. Further, as an officer of the court, plaintiffs’ counsel submitted that the costs requested are $73,000 less than the amount of fees and disbursements payable by the plaintiffs to their lawyers pursuant to the retainer agreement. I do not understand why the plaintiffs would not want to produce their retainer agreement. Without the actual retainer agreement and final bill to the clients, the total actual amount of the final bill of plaintiffs’ counsel cannot be ascertained or confirmed. The total amount of that bill is a factor when fixing costs. However, based on the evidence, submissions and representations, including those of plaintiffs’ counsel referred to above in this paragraph, I am satisfied that I can fix the plaintiffs’ fair and reasonable partial indemnity costs and be assured that the fixed costs will not exceed counsel’s total bill to the plaintiffs.
[16] The proceeding was of slightly above average legal complexity. However, for the following reasons, I find that the action was very complex factually. I make this finding considering the seriousness of the two plaintiffs’ injuries and conditions, the numerous and significant pre-existing injuries and conditions of the plaintiffs, and the numerous witnesses to be called by both parties – 16 witnesses were to be called by the plaintiffs, including 10 treating/expert witnesses, and the defence intended to call 13 witnesses, all experts. Given the lack of defence admissions and offers, the plaintiffs had to prepare all of the 16 witnesses that they intended to call at trial.
[17] Considering the severity of the injuries, particularly Mr. Savage’s amputation and its sequelae, proof and compensation for damages was very important to both plaintiffs.
[18] As stated above, the action may have been completed earlier if the defence had not waited until less than two weeks before trial to make their first offer to settle.
[19] The reasonable expectations of the defendants are not based on the defendants’ own costs. As stated above, the defence took a very hardball position in this case. Accordingly, the reasonable expectations of the defence should have been that they would have to pay the plaintiffs’ costs for all preparation required for a 2 – 3 week jury trial in which the plaintiffs would have to call a large number of witnesses in order to prove their claims for damages. The defence knew that the plaintiff intended to call 16 witnesses, including 10 treating/expert witnesses. The defence also knew that plaintiffs’ counsel would have to prepare for the 13 witnesses, all experts, that the defence intended to call. Also, the defence was sending two lawyers to the trial and should have expected the same for the plaintiffs. Lastly, the defendants knew that the plaintiffs’ costs would be higher than the defence costs because the onus was on the plaintiffs to prove their damages.
[20] However, there are some reasons that call for reduction of fees and disbursements claimed by the plaintiffs.
[21] Firstly, the hourly rates claimed for students and clerks are excessive, in some cases almost triple the rate suggested in the rules Committee’s Costs Bulletin. Even considering inflation since the release of the Bulletin, those hourly rates are excessive.
[22] Also, notwithstanding that adjustment has been made for costs recovered in conjunction with the accident benefits settlement, I am satisfied that there are some disbursements and some items for fees which would be partially attributable to accidents benefits claims that would have not been issues in the trial of the action. Accordingly, some reduction is required for disbursements claimed.
[23] Finally, I find that, in general, there was some excessive preparation by plaintiffs’ counsel in every stage of this litigation as represented by the fees items listed in paragraph 8 of the Bill of Costs. For example, it should not have required anywhere near $26,500 in legal fees to prepare for and attend this costs hearing.
[24] In summary, all of those matters require some reduction to the amount claimed by the plaintiffs for their partial indemnity legal fees and disbursements.
[25] Considering all of those factors, making allowances for matters as discussed above, and for all of these reasons, I am satisfied and I fix the fair and reasonable amount of the plaintiffs’ partial indemnity costs are as follows:
• For legal fees, $310,000, plus H.S.T.; and
• For disbursements, $160,000, inclusive of HST.
Judgment to go accordingly.
Justice D. Salmers
Released: December 18, 2017
Savage v. Cathers, 2017 ONSC 7591
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
James Savage and Jeanette Savage
Plaintiffs
– and –
Kevin Wolf, Litigation Administrator for the Estate of Courtney Taylor Cathers, Deceased
Defendant
RULING ON COSTS
Justice D. Salmers
Released: December 18, 2017