Court File and Parties
Court File No.: CV-17-0310-00 Date: 2018-12-14
Ontario Superior Court of Justice
Between:
Jon Wesselink, Jorge Wesselink, Gerrit Wesselink, Gerald Wesselink and Allison Bennett, Plaintiffs
Counsel: Mr. A.C. Murray, for the Plaintiffs
And:
Cedar Fair Entertainment Company, carrying on business as Canada’s Wonderland Company, Defendant
Counsel: Mr. T.J. McCarthy and Ms. S. Margison, for the Defendant
Heard: Via Written Submissions
Before: Madam Justice H. M Pierce
Reasons On Costs
[1] The defendant was completely successful at a jury trial at Thunder Bay. In the case, the plaintiffs claimed approximately $4.5 million in damages for concussive injury to Jon Wesselink after he rode on the defendant’s roller coaster. The claim was started when Jon Wesselink was a child. The plaintiffs submit that the extent of his future problems was not known when the statement of claim was drafted. The plaintiffs argue that a much better measure of their claim for damages approaching trial was their offer to settle for $499,000.00 plus costs. Regardless of the amount of the offer, significant damages were claimed.
[2] The trial took place for nine days during the weeks of September 10 and 17, 2018.
[3] The defendant seeks its costs on what it claims is a partial indemnity scale. These include fees of $108,957.00 plus HST and disbursements of $57,666.54.
Should Costs be Ordered?
[4] Costs are in the discretion of the trial judge. The factors governing the discretion are summarized at Rule 57 of the Rules of Civil Procedure, as follows:
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including where applicable, the experience of the lawyer for the party entitled to costs as well as the rates charged and the hours spent by that lawyer;
(0.b) 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;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake, or excessive caution;
(g) a party’s denial or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
[5] The defendant did not serve an offer to settle. However, counsel for the defendant submits that it was “well known to the plaintiffs” that Canada’s Wonderland would have consented to a dismissal of the action without costs prior to the commencement of trial. The plaintiffs submit that because there is no Rule 49 offer to settle from the defendants, the court should exercise its discretion pursuant to s. 131(1) of the Courts of Justice Act to refuse costs.
[6] Respectfully, the lack of an offer to settle is not a sufficient reason to deny costs. In Bell Canada v. Olympia & York Developments Limited (1994), 17 O.R. (3d) 135 (C.A.), the Court of Appeal observed that the Rules of Civil Procedure do not explicitly provide for the consideration of a failure to make an offer.
[7] The Court of Appeal reasoned:
The question is, what is reasonable when the claim is dismissed? The defendant’s position has been vindicated, and to deprive that party of the normal fruits of success is to say to all defendants that an offer to settle must be made simply because the lawsuit was launched. To put it another way, the trial judge cannot dispute the reasonableness of his own decision and, thus, cannot be critical of a party who anticipated it.
[8] There is nothing about this case that justifies a departure from the usual principle that costs should follow the event. It is a reasonable expectation of the defendant that it should have its costs, having secured a judgment in its favour.
[9] Accepting that costs are warranted, the question becomes: what scale of costs should be applied? In this case, there is no reprehensible conduct on the part of the plaintiffs that calls for an award of substantial indemnity costs, and the defendant does not seek them. A commentary of Rule 57 of the Rules of Civil Procedure, titled Information for the Profession sets out guidelines for hourly rates chargeable on a partial indemnity basis. I will deal with the indemnity arguments in the discussion about quantum of costs, including disbursements.
[10] The statement of claim sought general damages for Jon Wesselink of $3,000,000.00, plus special damages of $500,000.00 and punitive, aggravated and exemplary damages of $750,000.00. The size of the claim speaks to its importance to both parties.
[11] At trial, the jury dismissed the claim without apportioning liability. The jury nevertheless assessed Jon Wesselink’s general damages at $14,484.38 with no recovery for loss of future income or earning capacity.
[12] The claim sought $100,000.00 under the Family Law Act for each of Jon’s parents, and $25,000.00 for each of his two brothers. The jury assessed Allison Bennett’s damages at $3,621.10; Gerald Wesselink’s damages at $0.00 and each of the brother’s damages at $1,500.00.
[13] Obviously this verdict was greatly at odds with the plaintiffs’ expectations.
[14] The plaintiffs claim that the case was not sufficiently complex to warrant junior counsel and a law clerk. I will deal with these arguments when I consider quantum of costs.
[15] The plaintiffs also argue that the defendant refused to admit anything that should have been admitted.
[16] The plaintiffs did not identify which facts in their Rule 51 Request to Admit should have been admitted by the defendant such that the trial would have been shortened. Nor did they identify any specific instances of duplication of time.
[17] The defendant submits that it admitted the authenticity of certain documents as well as acknowledging that certain documents were made in the ordinary course of business. The defendant also submits that certain requested admissions were not consistent with the evidence that emerged at trial.
[18] I am not persuaded that there is any substance to this objection in these circumstances.
Who Should Pay the Costs?
[19] Who should pay the costs? At the time of the alleged injury, Jon Wesselink and his two brothers were under the age of majority. The law suit was commenced in 2012 by Jon’s mother, Allison Bennett, in her capacity as litigation guardian. By the time of trial, all the children had attained the age of majority and an Order to Continue was granted in July of 2018. Jon Wesselink was 19 years old at the time of trial.
[20] The children’s parents, Allison Bennett and Gerald Wesselink, were still living together at the time of the alleged injury but separated a few months later. Gerald Wesselink testified as one of the Family Law Act claimants at trial, as did Jon and his brothers. All of the family was present when Jon was allegedly injured.
[21] The plaintiffs contend that if a costs order is made, it should be made against the principal plaintiff, Jon Wesselink, and not against the Family Law Act plaintiffs, whose claims are derivative.
[22] The defendant argues that the family “stood united in their pursuit of a claim against Canada’s Wonderland through to verdict at trial.” It submits that the family members were material witnesses to the claim in respect of both liability and damages and should therefore all be liable for costs.
[23] In the alternative, the defendant contends that because the driving force behind the law suit was Allison Bennett, as litigation guardian, any costs order should extend to her and Jon Wesselink, at a minimum. In support of this argument, the defendant cites Rule 7.02(2)(h) of the Rules of Civil Procedure which requires a litigation guardian to acknowledge her liability for costs personally, subject to her right of recovery from the person who is under disability.
[24] In this case, the bulk of the litigation occurred while Jon Wesselink was under the age of majority, although he was 19 years old at the time of trial. Jon, a university student, is the only member of his family who is not presently employed.
[25] At trial, each person testified about the events leading to Jon’s alleged injury and the sequelae, as well as the impact on each person’s relationship with Jon and on the family as a whole. Most family members testified about Jon’s current physical and emotional status.
[26] In my view, had the jury granted judgment for the plaintiffs in the amount sought, each family member would have benefited. This was very much a joint effort; the family members each had a significant part in the trial with respect to liability and damages. Therefore, the liability for costs should be joint. Accordingly, the costs ordered shall be paid jointly and severally by all the plaintiffs.
The Quantum of Costs
Fees
[27] The defendant claims partial indemnity costs, including HST, of $123,121.41, as well as disbursements of $57,666.54, including HST, for total costs of $180,787.95. The plaintiffs submit that if the defendant’s claim for time is deemed reasonable, the defendant’s fees should total $55,380.50. There is no indication that HST is included in this submission.
[28] I will first consider the quantum of partial indemnity fees claimed.
[29] The plaintiffs make three objections to the fees claimed, contending that:
- the claim for second counsel and a law clerk at trial is excessive;
- the hourly rates claimed by counsel and the law clerk are excessive; and
- a deduction should be made for duplication of time or “over-lawyering.”
[30] The plaintiffs were represented by one counsel at trial. The defendant elected to retain a senior and a junior counsel for trial as well as a law clerk. The plaintiffs argue that the length and complexity of the trial did not warrant such a large defence team, which exceeded their reasonable expectations.
[31] I agree with the plaintiffs’ submission that the presence of the law clerk during the trial was excessive. The claims for her time and travel costs for trial are disallowed.
[32] However, I do not conclude that having junior counsel during a two week jury trial is unreasonable. Even though the plaintiffs retained an accomplished counsel to present their case without support at trial, this could not be characterized as a simple case. The plaintiffs presented three expert witnesses as well as multiple lay witnesses and documentary evidence.
[33] Ms. Margison, as junior counsel for the defence, cross-examined some witnesses. Her presence would allow for note-taking during trial, facilitate document management and legal research, develop points for cross-examination, and provide lead counsel with a sounding board. Should Mr. McCarthy have become ill or unavailable for any reason, she could have continued the trial.
[34] Furthermore, having junior counsel assist with trials is a time-honoured way of training young lawyers in the trial process.
[35] The plaintiffs take issue with the hourly rates claimed for counsel and law clerk services. I agree with their submissions.
[36] The defendant’s dockets do not identify the year of call for the lawyers or the experience of the law clerk; the dockets identify clerk time with the legend “CLK.” They do not identify the persons shown as “LW,” “BT,” “SD” or what his or her role in the case was. Accordingly, the claims for “LW,” “BT,” and “SD” are disallowed. Because of the hourly rate and the presence of “PM” during the trial, I infer this is also a claim for law clerk time in the dockets.
[37] In assessing counsel’s rates, I have considered the global cost of the trial. Mr. McCarthy’s hourly rate to his client is $275.00 per hour. In accordance with the Information for the Profession, the maximum hourly rate for partial indemnity costs for a lawyer of more than 20 years’ experience for more complicated matters and for more experienced lawyers is $350.00 per hour. However, this case is not on the “more complicated” end of the spectrum for a lawyer of Mr. McCarthy’s experience. I therefore allow 60% x $275.00 = $165.00, for Mr. McCarthy, not the rate claimed of $240.00 per hour.
[38] Secondly, Ms. Margison’s hourly rate to her client is $175.00. She claims partial indemnity costs of $150.00 per hour. She is a lawyer of six years’ experience. The maximum partial indemnity rate under the Information for the Profession is $225.00 per hour. Given her experience and role in the trial, I allow 60% of her hourly rate, being $105.00 per hour as a partial indemnity rate.
[39] Thirdly, the maximum hourly rate for law clerks set out in the Information for the Profession is $80.00 per hour, not the $150.00 per hour claimed by the defendant.
[40] Based on these hourly rates, Mr. McCarthy is entitled to 244.9 hours at $165 per hour for total fees of $40,408.50.
[41] Junior counsel, identified as “TL” and “SM” in the dockets are entitled to 173.8 hours at $105.00 per hour for total fees of $18,249.00.
[42] Law clerk time (including that of “PM”) not including trial time totals 84.5 hours at $80.00 per hour for a total of $6,760.00.
[43] Total fees on a partial indemnity scale are $65,417.50. HST on the fees equals $8,504.28. Total fees on a partial indemnity basis (including HST) are $73,921.78.
Disbursements
[44] The defendant claims disbursements of $57,666.54 (including HST). The plaintiffs say these are excessive: that a more reasonable amount would be $14,026.50. The principal objection is to the cost of Dr. Stephens’ report, invoiced at $27,912.50. The plaintiffs submit that the defendant should be allowed $5,000.00 for this report.
[45] The plaintiffs also object to travel costs for the defendant’s counsel, law clerk, and their instructing client, Mr. Bosch, who was present for the entire trial and also testified. There is no suggestion that the amount of the travel costs is unreasonable: only that travel does not fall within the rubric of partial indemnity costs.
[46] Tariff A of the Rules of Civil Procedure sets out the costs that are claimable on a partial indemnity basis. Item 30 provides:
Where ordered by the presiding judge or officer, such travelling and accommodation expenses incurred by a party as, in the discretion of the assessment officer, appear reasonable.
[47] As the Courts of Justice Act has delegated the task of fixing costs to the presiding judge in most instances, I conclude that the court, as well as the assessment officer, have jurisdiction to give effect to this tariff item.
[48] This case was started in London, Ontario where the plaintiffs’ lawyer practices law. Had it proceeded there, costs for accommodating plaintiffs’ counsel would have been modest.
[49] However, the case was transferred to Thunder Bay in order to accommodate the plaintiffs who are largely resident in the Thunder Bay area. The defendant’s business is located in the Toronto vicinity. Its counsel practices in Whitby, Ontario.
[50] In my view, it was reasonable for the defendant, his instructing client, and his counsel to incur the costs of airfare, accommodation, meals and taxi expense to be present during the nine-day jury trial. Having selected the place of trial to suit their convenience (and undoubtedly save them the cost of travel), the plaintiffs are hard-pressed to object to the defendant’s costs to defend the case in their back yard. However, the expenses of the law clerk for attendance at trial are disallowed.
Expert Report
[51] The plaintiffs take no objection to the attendance fee for Dr. Stephens’ attendance at court, claimed at $5,200.76. Her invoice was not produced. As there is no other claim for her travel costs, I infer that they are included in this amount. I also conclude that HST was charged in this invoice.
[52] Dr. Stephens is a neuropsychologist. As I have said, the plaintiffs’ principal objection is to the cost of Dr. Stephens’ report, invoiced at $27,912.50. They contend that the sum of $5,000.00 should be allowed for the report. However, there are no particulars about their reasonable expectations for the cost of expert reports and no indication of what the plaintiffs were invoiced by their own lawyer or experts.
[53] The defendant argues that the cost is reasonable because Dr. Stephens estimated that she spent 300 hours reviewing Jon Wesselink’s medical and educational brief and his assessment took two days to complete.
[54] The defence also submits that the plaintiffs presented two expert medical witnesses plus an expert who testified about loss of future income, while the defence presented only Dr. Stephens to refute the plaintiffs’ expert testimony.
[55] Tariff A, item 26 provides that a reasonable amount may be ordered for experts’ reports supplied to the other party and that were reasonably necessary to the conduct of the proceeding.
[56] In addition, Tariff A, item 28 allows $350.00 a day for the testimony of an expert giving opinion evidence at a hearing, subject to increase in the discretion of the assessment officer. I conclude that the fees set out in the Tariff are out of date, especially when compared to the hourly rates of lawyers.
[57] There can be no doubt that this was expensive litigation from the perspective of expert opinion. I am mindful that Dr. Stephens was an effective defence witness in light of the jury’s verdict. Her task was to qualify or refute the testimony of the plaintiffs’ three expert witnesses, two of whom were qualified as experts in the psychological or neurological fields. The plaintiffs’ claims were significant. The witness was eminently qualified in her field. The court must recognize that in order for parties to attract qualified experts, they must be prepared to pay reasonable fees.
[58] As well, it is evident that Dr. Stephens spent a good deal of time considering Jon Wesselink’s medical and educational background and present and future prospects. Her time for assessment of Jon Wesselink greatly exceeded that spent by Dr. Collins. Nevertheless, in order to preserve access to the courts in litigation, the court must consider what are reasonable costs. The court must also consider the reasonable expectations of the parties with respect to costs.
[59] Having regard for the totality of the costs awarded, and for the costs for Dr. Stephens’ attendance at trial, accounted for separately, I am of the view that a reasonable fee for her assessment and report is $15,000.00 inclusive of HST.
Summary
[60] The defendant is entitled to its costs, including HST, from the plaintiffs, jointly and severally, as follows:
- Total fees on a partial indemnity basis: $73,921.78
- Dr. Stephens’ report dated September 1, 2017: $15,000.00
- Dr. Stephens attendance to testify: $5,200.76
- Disbursements and travel paid by law firm: $13,798.97
- Disbursements paid by client: $2,252.08
Total fees, disbursements and HST: $110,173.59
“original signed by”
The Hon. Madam Justice H.M. Pierce