Court File and Parties

COURT FILE NO.: 16-1106-A1 DATE: 20181205 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Donna Nesbitt Plaintiff – and – Brian Jeffery Defendant – and – County of Simcoe and The Corporation of the Town of Midland Third Parties

Counsel: John Hammond for the Plaintiff J. Keenan Sprague for the Defendant Marie Sydney and Harold W. Sterling for the proposed Third Party, Her Majesty the Queen in Right of the Province of Ontario, Represented by the Minister of Transportation in the Province of Ontario

HEARD: Costs submissions in writing

Ruling on Costs

BOSWELL J.

[1] This action arises from a motor vehicle accident that occurred at an intersection in Midland in January 2015. The defendant is alleged to have run through a red light and to have struck the plaintiff in the intersection. The defendant says the roadway was icy and insufficiently maintained by the Ministry of Transportation. He wanted to seek contribution and indemnity from the Ministry for any damages he may ultimately be required to pay the plaintiff. He sought to add the Ministry as a third party, but the Ministry resisted.

[2] On October 5, 2018 I heard a motion brought by the defendant for leave to add the Ministry to this action as a third party defendant. The motion was strongly opposed. I granted the relief sought, for reasons reported at 2018 ONSC 6448 and I invited the parties to make written submissions on the issue of costs.

[3] I have received and reviewed the parties’ submissions and the following is my costs ruling.

The Parties’ Positions

[4] The defendant claims success on the motion and asserts that costs should, in the usual course, follow the event. He asks that his costs be assessed on a substantial indemnity scale and fixed at roughly $28,000.

[5] The elevated scale is justified, in the defendant’s submissions, on the basis that the Ministry converted a straightforward procedural motion into a cumbersome, complex and lengthy matter that has delayed the proceedings for months. The defendant submits that the Ministry’s position on the motion was so unduly complex and unreasonable as to border on vexatious.

[6] As an alternative, the defendant seeks his costs fixed on a partial indemnity scale at roughly $20,000.

[7] The plaintiff seeks her costs as well. She was not, strictly speaking, a party to the motion. She did not file any materials nor make any submissions. Her counsel attended court on three separate occasions in relation to the motion. On the initial return date, June 26, 2018, the motion was deemed to be too long for the open motions list. The parties agreed to put it over to a scheduled long motion date on October 5, 2018. The plaintiff urged the court to fix an earlier date and, in the result, the matter was put over to another open motions list on August 7, 2018 in the hope that there might be enough time on that date for it to be heard. Apparently there was not.

[8] The plaintiff seeks her costs for her counsel’s review of the materials and for three attendances. On a partial indemnity basis, those costs are said to be $4,800.

[9] The Ministry takes the position that no costs should be ordered. They advance the following reasons for their position. First, they say the motion could have been avoided altogether had the defendant acted quickly and reasonably in determining the identity of the party charged with maintaining the intersection where the accident occurred. Instead, the defendant waited a year and then added the wrong parties as third parties to the action.

[10] Second, they say this motion should have been entirely unnecessary in view of a companion action recently commenced by the defendant against the Ministry. I note that I dealt with that issue in my substantive ruling.

[11] Third, they claim success with respect to an important issue on the motion: whether the defendant failed to meet the notice requirement under the Public Transportation and Highway Improvement Act, R.S.O. 1990, c. P.50 (“PTHIA”).

[12] Fourth, they assert that the defendant is to blame for the complexity of the motion because it initially misnamed the Ministry and thereafter changed its position on the motion in relation to one or more material issues.

The Governing Principles

[13] The awarding of costs is a discretionary function of the court, governed by section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43 and by Rule 57.01 of the Rules of Civil Procedure.

[14] Rule 57.01 lists a number of factors for the court to consider in the assessment of costs which include, but are not limited to the following:

(a) the complexity of the proceeding; (b) the importance of the issues; (c) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (d) whether any step in the proceeding was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution; (e) the principle of indemnity; and, (f) the concept of proportionality, which includes at least two factors: i. the amount claimed and the amount recovered in the proceeding; and, ii. the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

[15] Regardless of the particular factors considered relevant by the court on any given assessment, it is now well-settled that the overarching principles to be observed in the exercise of the court’s discretion to fix costs are fairness, proportionality and reasonableness: see Beaver v. Hill, 2018 ONCA 840; Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.); and Moon v. Sher (2004), 246 D.L.R. (4th) 440 (C.A.).

[16] In fixing liability for costs, the general rule is that costs follow the event and will be awarded on a partial indemnity basis: Bell Canada v. Olympia & York Developments Limited et. al. (1994), 17 O.R. (3d) 135 (C.A.). In special circumstances, costs may be awarded on a higher scale, but those cases are exceptional and generally involve circumstances where one party to the litigation has behaved in an abusive manner, brought proceedings wholly devoid of merit, and/or unnecessarily run up the costs of the litigation: Standard Life Assurance Company v. Elliott (2007), 86 O.R. (3d) 221 (S.C.J.).

Discussion

[17] This was a motion to add the Ministry as a third party in a motor vehicle accident claim. The Ministry resisted the motion. They argued that there was no jurisdiction to add them as a third party when the claim was simply for contribution and indemnity and, moreover, where the notice period under the PTHIA had long expired. I found otherwise. Though I concluded that the notice provision technically applied, I found that it did not bar the claim in the circumstances of this case.

[18] All this is to say that the defendant was successful and is entitled to his costs.

[19] The plaintiff did not have standing on the motion. She was interested in the outcome of the motion and concerned that it be dealt with as promptly as possible. But she filed no materials and made no submissions. She was, as the old saying goes, simply “along for the ride”. In my view she is not entitled to costs. She could not reasonably have expected that she would be awarded the costs of a motion she was not directly involved in. At the same time, the parties directly involved in the motion would not reasonably have anticipated that they would have had an exposure to her for costs.

[20] In terms of the defendant’s costs, I am not persuaded that they should be awarded on a substantial indemnity basis. I do not consider the actions taken by any of the parties to the motion to have been abusive or vexatious or otherwise worthy of sanction.

[21] Delays in getting the motion scheduled were not the fault of any of the parties. The reality is that there is precious little judicial time available to hear long civil motions in this “Jordan era”. Moreover, the complexity of the motion was, in my view, a function of the manner in which it evolved and the positions taken by the parties. Some of those positions, on both sides, may ultimately have proven unsuccessful, but they did not rise to the level of frivolous or vexatious. The complex nature of the arguments is a factor that is relevant to the issue of quantum, but in these circumstances, does not warrant an elevated scale of costs.

[22] In terms of the issue of quantum, I have considered, of course, the factors enumerated in Rule 57.01.

[23] I find that this motion was very complex. The arguments advanced by the Ministry were layered and nuanced and, I confess, difficult to follow at times. There were multiple factums filed by each side as the ground shifted over time.

[24] The issues engaged by the motion were important; not only to the parties but to the broader public.

[25] I find that a significant amount of time went into the preparation of materials for the motion and into the argument, which took roughly half a day.

[26] Though the issues were important, complex and time consuming, I continue to have some difficulty with the concept of awarding $20,000 as partial indemnity costs on a pleadings motion. I accept that, as motions to add third parties go, this one is at the very high end of the scale in terms of difficulty and preparation time. I also acknowledge that the defendant was served with a costs outline by the Ministry in line with the costs incurred and sought by the defendant.

[27] Considering the overarching issues of fairness, proportionality and reasonableness, I think a costs award of $15,000 more accurately reflects what a party in the defendant’s position might reasonably anticipate by way of indemnification if successful on a motion of this nature, and what a party in the Ministry’s position might reasonably expect to pay if unsuccessful on a motion of this nature.

[28] In the result, I fix costs in favour of the defendant, payable by the Ministry within 30 days.

Boswell J. Released: December 5, 2018