OTTAWA COURT FILE NO.: 11-50976 DATE: 20181005 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SHARON LEE ARMSTRONG and DERIK CHORNOBEY, Plaintiffs AND: GALLAGHER’S GARAGE LTD. and BRIAN HENRY GALLAGHER, Defendants

BEFORE: Mr. Justice Graeme Mew

COUNSEL: Éliane Lachaîne, for the Plaintiffs Colin Dubeau, for the Defendants

HEARD: in writing

COSTS ENDORSEMENT

[1] Sharon Lee Armstrong sued Gallagher’s Garage Ltd. and Brian Henry Gallagher after she injured her back while demonstrating her ability to perform an essential task of the job that she had applied for with the defendants.

[2] Following a four day, non-jury trial in Ottawa on the issue of liability only, I held that the defendants were not liable to the plaintiff. The plaintiff’s action was dismissed.

[3] The parties have been unable to resolve the issue of costs. The successful defendants seek costs of the action on a partial indemnity scale, inclusive of H.S.T. and disbursements, of $156,015.04.

[4] The plaintiffs, while acknowledging that as the successful party, the defendants, are entitled to some costs, argue that the amount awarded should be “minimal”.

[5] The parties have provided me with their respective bills of costs and written submissions. While I have considered them all, as well as the enumerated factors under rule 57.01 of the Rules of Civil Procedure, I will only address those factors for which there is a stated difference of opinion between the parties.

General Principles Applicable to the Fixing of Costs

[6] The usual rule in Ontario is that costs follow the event. This is subject to the overarching discretion of the court to determine by whom and to what extent costs should be paid: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1).

[7] Rule 57.01 of the Rules of Civil Procedure provides specific guidance on the exercise of the court’s discretion to award costs. Costs are usually payable on a partial indemnity scale unless the Rules of Civil Procedure provide for, or the circumstances of the case warrant, costs on an enhanced (substantial indemnity or full indemnity) scale.

[8] The principle of proportionality is one of general application to the interpretation of the Rules of Civil Procedure (rule 1.04(1.1)) and therefore applies to the application of the rules governing costs. As a general proposition: (i) proportionality does not override other considerations when determining costs; and (ii) proportionality should not be used as a sword to undercompensate a litigant for costs legitimately incurred: Aacurate General Contracting Ltd. v. Tarasco, 2015 ONSC 5980, at paras. 13-17; Dang v. Anderson, 2017 ONSC 2150, paras. 12-15.

[9] Fixing of costs is not merely a mechanical exercise in reviewing the receiving party’s costs outline: Agius v. Home Depot Holdings Inc., 2011 ONSC 5272 at para. 11. The amount of costs should reflect an amount that the court considers to be fair and reasonable and within the expectations of the parties, rather than an exact measure of the actual costs of the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 19 A.C.W.S. (3d) 341 (Ont. C.A.) at para. 4; Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.).

Offers to Settle

[10] The only offer of settlement was a time limited one, made on 13 June 2012, and left open for acceptance for a period of one month. That offer, by which the defendants offered to settle the action on the basis of payment to the plaintiffs of the all-inclusive amount of $12,500 was made in anticipation of a summary judgment motion which was ultimately not brought.

[11] Although the defendants invite me to consider this offer as an issue relevant to the question of costs within the meaning of rule 57.01(1)(i), I am not persuaded that it would be appropriate for me to do so. The offer was made before the expert reports in this case started flowing. While, with hindsight, the offer is one which the plaintiffs might now wish they had accepted, it was nevertheless a de minimis offer, which the plaintiffs cannot be criticised for not having accepted at the time.

The Complexity of the Issues

[12] The issue of standard of care consumed the greatest amount of resources of both parties, both in terms of time and expense. The expert evidence was extensive although, as noted in my reasons for judgment, ultimately of limited assistance.

[13] While, at a superficial level, this case was an occupier’s liability matter, the factual circumstances were unique. There was very little precedent to guide the parties or the court. It came as a surprise to the court, if not one or both of the parties, that there were no applicable workplace standards addressing the type of lifting operations which the plaintiff was asked to engage in.

[14] Given the foregoing, I would classify the case as being one of moderate complexity. While there were an unusual number of reports, which in turn spawned responding reports, it is understandable how, in a case like this, the views of the experts would evolve as they each considered what the other expert had to say.

[15] Given the foregoing, I regard as reasonable the approach taken by each side. I find that it was proportionate to the complexities involved.

The Importance of the Issues

[16] Many of my observations with respect to complexity apply under this heading.

[17] The issues were important for both parties. For the plaintiff, given her economic circumstances, and the apparent impact her injuries have had on her ability to earn a living, this matter was of the upmost importance. For the defendants, too, given the nature of their business, a finding of civil liability for asking individuals – whether employees or otherwise – to lift trailers onto trailer hooks, would be significant.

The Conduct of any Party that tended to Shorten or Lengthen the Duration of the Proceedings

Adjournments

[18] The pretrial in this action took placed as long ago as 24 August 2013. It was at that time, with the consent of the parties, that the issues of liability and damages were bifurcated.

[19] Subsequently, the liability trial of this matter was adjourned on four occasions.

[20] The first adjournment request, made well in advance by the plaintiffs, resulted in the scheduled trial being put over for three months. This was due to unavailability of counsel.

[21] The second adjournment request was made less than two weeks before the liability trial was scheduled to commence. The defendants say that counsel for the plaintiffs requested this adjournment to review the liability theory with her clients and to develop further expert evidence.

[22] The third adjournment request was made, again well in advance, because of the unavailability of the plaintiff’s expert in March 2017 (which is when the trial was scheduled to proceed). The trial was then adjourned to April 2018.

[23] On 10 April 2018, at what was to have been the commencement of the liability trial, the plaintiffs sought to amend their statement of claim to allege the existence of a form of quasi-employment relationship between the parties. The defendants say that this motion took a day to argue. The plaintiffs say that the defendants consented to the amendment, but only on the condition that the trial be adjourned so that they could file a “right-to-sue” application before the Workplace Safety and Insurance Appeals Tribunal. I am not sure actually what happened at that point. Suffice it to say that the defendants say that the consumption of a full day of trial time then allotted to deal with the amendment and adjournment issues, “combined with Court scheduling issues outside the control of the parties” led to the trial being adjourned to June 2018.

[24] The defendants argue that the plaintiffs’ repeated adjournments of the trial unnecessarily delayed the duration of the proceeding and resulted in the defendants incurring additional costs that would not otherwise have been incurred. The plaintiffs criticise the filing of the “right-to-sue” application as being improper and unnecessary and that the making of that request resulted in the adjournment of the trial.

[25] Any time that a trial date has been set, and a party leaves it until a few weeks beforehand to either request an adjournment or amend a pleading, costs are inevitably wasted. Because prudent counsel do not leave it until days or even a couple of weeks before a trial to get ready, work that has been done by way of preparation for an adjourned trial often has to be redone as the new trial date approaches.

[26] Although, in this case, I have not been informed of any orders relating to the costs of the adjournments, I see no reason why the defendants should not be compensated for any wasted costs incurred as a result of the adjournments that occurred. Ultimately, the issue is one of accountability and responsibility. A party that requests an adjournment or, by reason of a step taken (such as a late amendment of a pleading) precipitates an adjournment request, cannot expect to avoid responsibility for costs reasonably incurred by other parties affected, prior to, or as a consequence of the adjournment.

Calling the Family Doctor

[27] The plaintiffs argue that it was unnecessary for the defendants to call, by way of witness summons, Ms. Armstrong’s family doctor, Dr. McCarthy. She gave evidence with respect to Ms. Armstrong’s osteoporosis. Ultimately, the defendants’ biomechanics expert conceded that Ms. Armstrong’s osteoporosis did not affect his conclusions. On that basis, the plaintiffs claim that the calling of Dr. McCarthy was unnecessary and that any costs associated with them having done so should not be allowed.

[28] The defendants say that they attempted to avoid the necessity of calling Dr. McCarthy as a witness by serving a notice pursuant to section 52 of the Evidence Act, R.S.O. 1990, c.E.23, setting out Dr. McCarthy’s clinical notes and records relevant to the issue of her communication of the diagnosis of osteoporosis to the plaintiff, along with a bone mineral density test report contained in her clinical notes and records. The defendants say that, in response, the plaintiffs took the position that the report containing the bone mineral density testing results was not a proper medical report and insisted that the physician who undertook that testing be available for cross-examination at trial.

[29] Instead of calling the physician who prepared the bone mineral density test report, the defendants called Dr. McCarthy. They say that they were required to call her because the plaintiff denied ever having been diagnosed with osteoporosis, denied having been prescribed medication for it, and denied having been given any directions or recommendations by Dr. McCarthy with respect to such diagnosis.

[30] Normally, a medical witness would be called on the issue of damages. Given the concession made by the defendants’ expert, that the diagnosis of osteoporosis had no bearing upon his opinion on liability, and further, given Dr. McCarthy’s testimony that she could not expressly recall telling Ms. Armstrong to refrain from lifting weights, Dr. McCarthy’s testimony was of limited utility. But I am not prepared to conclude that it was completely irrelevant. The plaintiffs should simply have agreed to the filing of Dr. McCarthy’s clinical notes and records. By insisting on a live witness being produced, the plaintiffs unreasonably caused the associated time and expense to be incurred. I therefore see no reason why it should not form part of the defendants’ claim for costs.

Disbursements

[31] The plaintiffs criticise as excessive the fees of $19,512.89 plus H.S.T. charged by the defendants’ expert. They further take issue with any portion of the expert’s fee relating to transportation, meals and accommodations (the defendants’ expert was from Toronto).

[32] The defendants concede that the amount of $399.30 apparently spent in respect of their expert’s air fare to travel to and from Ottawa for trial should not be included.

[33] The fees and related expenses incurred by the plaintiffs with respect to their own expert totalled $32,850.42, an amount considerably greater than that spent by the defendants on their expert.

[34] Expert fees must be reasonable and reasonably incurred: Mark M. Orkin, The Law of Costs, 2nd ed. (Toronto, Thomson Reuters: looseleaf) at p. 7-23. Given the plaintiffs’ own expert report expenses, but considering the concession made by the defendants concerning travel expenses, I would adjust the fees of the defendants’ expert downwards by $399.30, but otherwise allow the amount claimed.

Reasonable Expectations

[35] The plaintiffs point out that their partial indemnity fees ($78,740) are significantly less than the fees claimed by the defendants ($113,282) (the total disbursements claimed by each side were virtually identical).

[36] Appreciating that the issue of damages was not on the table at trial, having been deferred until determination of the issue of liability, it is nevertheless usual that a party bearing the burden of proof tends to incur more by way of fees and disbursements than a responding party. On that basis, the plaintiffs might reasonably have expected their exposure to costs to have been no greater than the amount that would have been recovered if they had succeeded at trial. In that regard, I note that both sides employed two counsel at trial. However, for reasons given above, the defendants are also entitled to costs thrown away as a result of adjournments of the trial.

Proportionality

[37] I have no concerns about the fees and disbursements being claimed being disproportionate to the amount at stake and the issues presented by this case.

Impecuniosity of the Plaintiffs

[38] The plaintiffs, without supporting evidence, state in their costs submissions:

The plaintiffs are impecunious. Ms. Armstrong’s only source of income is Canada Pension Plan Disability benefit in the monthly amount of $370.68. Mr. Chornobey is currently unemployed due to health issues. The plaintiffs’ assets are extremely limited. In light of this, the plaintiffs could not, in good faith, consent to a costs order against them.

[39] The plaintiffs’ costs submissions conclude:

The plaintiffs acknowledge that as the successful party, the defendants are entitled to some costs. However, considering the circumstances and the plaintiffs’ submissions, the award of costs against the plaintiffs should be minimal.

[40] The defendants, predictably, respond that the ability of a successful party to enforce a costs order against an unsuccessful party is not a factor to be taken into account in the court’s awarding of costs. Rather, the objective of the court on the issue of costs is to fix costs in an amount that is “fair and reasonable”, having regard to what the losing party could have expected the costs to be, Boucher, at paras. 26 and 38.

[41] In College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario v. Federation of Ontario Traditional Chinese Medicine Assn., 2015 ONSC 2262, the court observed, at para. 20:

While there are circumstances in which the inability of a party to pay costs may be a relevant factor in determining whether an adverse costs award should be made (see, for example, Baines v. Hehar 2013 ONSC 849, (2013), 114 O.R. (3d) 551), such circumstances will be few and far between and will require evidence not only that the respondents do not currently possess the financial wherewithal to pay an award of costs but that it is most unlikely that they will ever acquire the ability to meet a costs burden arising from this case. Beyond the bald statement by the respondents that they cannot pay, there is no such evidence here.

[42] Similar comments could be made with respect to the plaintiffs’ submissions in this matter regarding their impecuniosity.

[43] The burden on plaintiffs in personal injury litigation of adverse costs awards is nothing new. I would venture to suggest that competent lawyers will always advise their personal injury clients that they risk facing substantial awards of costs, which may well exceed their ability to pay, in the event of an unsuccessful lawsuit. The advent of contingency fees and other similar arrangements which relieve plaintiffs of the burden of having to pay their own lawyers unless an action succeeds has not changed the principle that parties who lose a lawsuit are generally required to pay at least the reasonable partial indemnity costs of the party or parties who win.

[44] The burden that our system of costs places on plaintiffs has been mitigated somewhat in recent years by the availability of adverse costs insurance. Admittedly, such insurance is not available in all cases and the premiums may reflect an assessment by the underwriters of the viability of the claim and, hence, the risk borne by the insurers of having to pay out (there is no suggestion that such coverage was purchased by the plaintiffs in this case).

[45] One may well sympathise with parties in the position of Ms. Armstrong, who bring a bona fide claim but, ultimately, are not successful. But she would have been warned. She would have known the risk that she ran. And that is how our system works. Just as plaintiffs have the right to pursue meritorious claims and, in most cases, to be at least partially compensated for the costs that they incur in doing so, parties who successfully defend claims made against them are usually entitled to their costs. This strikes a balance between access to justice and providing some compensation to parties who are unsuccessfully sued.

[46] In the absence of any evidence that demonstrates that this is one of those rare cases where the inability of the plaintiffs to pay costs should be a relevant factor in determining either the making of an adverse award of costs or the quantum of such award, I decline to do so.

Conclusion

[47] There being no issue taken by the plaintiffs with respect to the hourly rates charged by the lawyers for the defendants, but having regard to the plaintiffs’ reasonable expectations as well as the other factors discussed, I fix the defendants’ costs, payable by the plaintiffs, in the amount of $135,000 inclusive of disbursements and H.S.T.

Graeme Mew J.

Released: 5 October 2018