Court File and Parties

COURT FILE NO.: CV-11-2015 DATE: 20190528 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Cheryl Ann Yelland, Estate Trustee for the Estate of Gerald Coulson, Deceased, Deborah Gail White, Gordon G. Coulson, Lynn Cunningham-O’Connor, Cheryl Ann Yelland, Gregory A. Coulson, Shane Cunningham, Megan White-Fox, Deborah Gail White, Litigation Administrator of the Estate of Justan Tobin, Deceased, William R.L. Yelland, Hank R. J. Yelland, Jordan M. Coulson and Jeffrey A. Coulson AND: Sunrise North Senior Living Ltd., PRP Senior Living Operations Inc.

BEFORE: Tzimas J.

COUNSEL: Michael D. Smitiuch and Luke Hamer, for the plaintiffs Anita M. Varjacic and Rebecca V. Moore, for the defendants, Sunrise North Senior Living Ltd., PRP Senior Living Operations Inc.

HEARD: Oral cost submissions made on October 30, 2018; supplementary written submissions on November 7, 2018; Jury trial held on May 9, 28, 30, 31, June 1, 4, 5, 6, 7, 8, 12, 13, 15, 16, 18, 19, 20, 21, 22, 25, 26, 27, and 28, 2018

Endorsement on Deductibility of Settlement and Costs

Overview

[1] I received submissions from counsel on two issues: costs and the deductibility of Mr. Coulson’s general damages from his settlement with the City of Brampton. I also heard oral submissions and then received supplementary written submissions regarding the inclusion of various disbursements. My decision on costs ought to mark the conclusion of a very difficult and tragic case, particularly for the plaintiffs and their late mother, Evelyn Coulson.

[2] The original claim before the court was against Sunrise North Senior Living Ltd., PRP Senior Living Operations Inc. 1488245 Ontario Ltd. carrying on business as Riska Medical / Surgical Supply, Kunde Healthcare Services, Inc., Kunde Healthcare Services and Michael Kunde. The plaintiffs and the defendants Riska Medical / Surgical Supply, Kunde Healthcare Services Inc., Kunde Healthcare Services and Michael Kunde, entered into a Pierringer Agreement and accordingly these defendants took no part in the trial.

[3] The only defendants who remained before the court were Sunrise North Senior Living Ltd., PRP Senior Living Operations Inc., (Sunrise). Sunrise mounted a vigorous defence on virtually every issue before the court, right down to its position on costs.

[4] The trial by jury was held in June 2018 for almost 4 weeks with jury deliberations occurring over almost 4 days. The jury heard from a total of 20 witnesses. The evidence was intense and emotionally charged and the legal issues were difficult and complex. The jury was required to make findings on liability and damages.

[5] Even though the plaintiffs settled with the non-Sunrise defendants, the jury still had to apportion liability across all of the defendants.

[6] On damages, the jury had to consider the Family Law claims for all the plaintiffs. They also had to consider Greg Coulson’s claims for general damages for mental distress and injury and his loss of income for both past and future.

[7] Finally, the jury was asked to make an award of punitive damages exclusively against Sunrise.

[8] Ultimately on June 28, 2018, the jury made the following awards:

a. Damages for loss of care, guidance, and companionship pursuant to the Family Law Act, in the total amount of $401,500. Broken down, each of Evelyn Coulson’s five children received an award of $63,300, her 7 grandchildren were awarded $10,000 each, and the estate for her husband, who was alive when she died was awarded $15,000. b. Greg Coulson received $140,000 in general damages, $62,200 for past loss of income and $10,600 for future loss of income, for a total of $212,800. c. $25,000 in punitive damages against Sunrise. d. The jury apportioned liability as against the Sunrise defendants at 25%.

[9] The plaintiffs submit that they are entitled to costs on a partial indemnity basis for the entire action for the following reasons. They say that Sunrise’s offers to settle were not proper Rule 49 Offers. They also submit that in any event, it is not possible to compare the judgment they obtained with Sunrise’s offers to settle because the jury made two very substantial awards that were not contemplated in Sunrise’s offers: general damages of $140,000 for Greg Coulson’s mental distress and punitive damages against Sunrise of $25,000. Furthermore, they submit that the total net damages of $178,575 that they received at trial exceeded Sunrise’s net offer of $175,000 by $3,575. Finally, in addition to these considerations, the plaintiffs submit that the court has the discretion to depart from the cost consequences of Rule 49.10 and invite the court to do so, if necessary.

[10] With respect to quantum, they submit that the costs and disbursements, as outlined in their counsels’ Bill of Costs, were reasonable and necessary for the pursuit of their claim and should be granted. Their total costs on a partial indemnity basis, inclusive of tax came to $389,985. The total disbursements costs inclusive of tax came to $88,709.91.

[11] The plaintiffs also seek costs thrown away in the approximate sum of $66,000 on account of the adjournment of the trial from January 2018 to May 2018. The judge who adjourned that date reserved the costs of the adjournment to the trial judge.

[12] Accordingly, in rounded figures, the plaintiffs seek a total costs award of approximately $545,000 inclusive of all applicable taxes.

[13] Sunrise opposes the plaintiffs’ claim. Relying on the Rule 49 offer they advanced just a few days before the trial started and which they say was valid, they submit that the plaintiffs are entitled to their partial indemnity costs to April 26, 2018 but they seek to limit the sum to $100,000. They then say that Sunrise should be awarded its costs of the trial on a partial indemnity basis, which come to $150,992.97. In addition, counsel submits that the sums claimed by the plaintiffs are excessive and would not have been within the reasonable contemplation of Sunrise. With respect to its own costs, Sunrise submits that the sum of $150,992.97 is reasonable.

[14] On the issue of the deductibility of Mr. Coulson’s settlement from the City of Brampton from the loss of income damages awarded at trial, Mr. Coulson strenuously opposes the defendants’ claim. He submits that those damages were general damages and did not indemnify him for past and future loss of income.

[15] The defendants disagree. Sunrise submits that the settlement from the City of Brampton, even if labeled as general damages, could not relate to anything but a loss of income, since it arose from Mr. Coulson’s wrongful termination claim. Without a deduction to the jury’s award, Mr. Coulson would be obtaining a double recovery for his loss of past income. On that basis, the defendants further submit that the award for the past loss of income of $62,200, should be reduced to $39,631. The defendants’ corresponding obligation to pay Mr. Coulson would therefore be reduced from $15,550 to $9,907.75, for a difference of $5,642.25.

[16] For the reasons that follow, I conclude that Mr. Coulson’s settlement is not deductible from the award he received for the loss of past income and the jury award should not be reduced.

On costs, I fix costs in rounded figures in favour of the plaintiffs as follows: i. fees up to the date of the trial: $235,000; ii. fees for the trial: $80,000; iii. disbursements: $88,000; and iv. costs thrown away on account of the adjournment at $27,000 and v. costs of this motion: $15,000. The total of award therefore comes to $445,000, payable by Sunrise to the plaintiffs. My reasons and analysis for this conclusion are outlined below.

a. Deductibility of Mr. Coulson’s Settlement

[17] I begin with my consideration of Sunrise’s deductibility claim because that will identify the net award to the plaintiffs. To state perhaps the obvious, if I agree with Sunrise, the net award to the plaintiffs will be reduced accordingly. The ultimate award figure is what I require to proceed with my consideration of the appropriate costs award. However, to be clear, my treatment of the deductibility issue lies independently of any of the cost considerations. My decision on deductibility is not driven by any concern over how the figure may impact my determination on costs.

[18] Turning then to the deductibility of Mr. Coulson’s settlement with the City of Brampton from the jury’s award for his past losses of income, and having considered the evidence and the applicable law, I disagree with the defendants’ submission that it should be deducted. I accept Mr. Coulson’s submission that the settlement he received from the City of Brampton was the result of a negotiation and that it was for general damages, as described in the formal documentation.

[19] In short, there was nothing in the evidence to support the defendants’ contention that however the settlement was labeled it could not have been for anything other than for Mr. Coulson’s past loss of income. In coming to this conclusion I am guided by the following decisions: Basandra v. Sforza, 2016 ONCA 251, which places the onus of proving the deduction on the party who stands to benefit from the deduction, IBM Canada Limited v. Waterman, 2013 SCC 70, [2013] 3 SCR 985 on the nature and purpose of the benefit, and Helix Biopharma Corp. v. Lifecodes Corp., for the cardinal presumption that the parties intended what they said in their documents.

[20] On the evidence before me, the settlement agreement with the City of Brampton resulted from a negotiation that was preceded by a union grievance. The Minutes of Settlement stated that the City of Brampton, “the Employer”, “shall pay the Grievor”, Mr. Coulson, “the sum of $112,945 as general damages for settling this claim and in recognition of his disability during his period of absence”.

[21] The court also heard from the forensic accountant that Mr. Coulson’s past loss of income would have been between $150,000 and $160,000 having regard for his salary and the length of time that intervened between Mr. Coulson’s termination and reinstatement.

[22] In contrast to Mr. Coulson’s evidence, although Sunrise asked the court to interpret the terms of Mr. Coulson’s employment contract with the City of Brampton, (Brampton), to mean that any grievance settlement pursuant to that agreement could only be for loss of income and that Brampton could not have intended anything else, Sunrise did not lead any evidence to support such an interpretation. Nor did it lead any evidence of Brampton’s intentions in its settlement with Mr. Coulson.

[23] I recognize that a confidentiality agreement may have impeded such an inquiry, but here too, there was no evidence that such an agreement existed or that the City of Brampton would have refused an attempt by Sunrise to call such evidence. To argue in the factum that in the circumstances of a union grievance and the underlying contract, the settlement could only be for loss of past income and to ask the rhetorical question, what else the settlement sum could be for, only served to underscore the failure in the evidentiary record. Sunrise effectively asked the court interpret Mr. Coulson’s employment contract and related union documents in Sunrise’s favour, but without a proper evidentiary foundation to support the contentions.

[24] Against the two positions, when I consider the forensic accountant’s evidence alongside the fact that Mr. Coulson gave up certain future rights and privileges in relation to possible future promotions and salary increases, it is far from certain that Brampton’s settlement sum was only on account of the past loss of income, as Sunrise would like the court to find. My conclusion might have been different if the compensation to Mr. Coulson was the result of a grievance arbitration where the court might have had the benefit of reasons. But having regard for the broader context for Mr. Coulson’s original termination, his post traumatic stress symptoms, (PTSD), which resulted a suicide attempt, and the fact that the settlement was the product of a negotiation, I can only conclude that the process provided the parties with substantial flexibility over the terms of the settlement and the parties very deliberately identified the settlement as “general damages”.

[25] Simply put, without an evidentiary foundation to the contrary, I have no basis upon which to find that Brampton’s settlement was only for past loss of income and that the jury’s award for past loss of income would effectively result in a double-dipping for Mr. Coulson. Accordingly, I decline to make any deduction against the jury’s award to Mr. Coulson’s past loss of income.

[26] Before, I leave this section, I do wish to make the observation that given the overall outcome in this case, and in particular, the jury’s apportionment of liability of only 25% against Sunrise, and having regard for Sunrise’s estimate that the deduction would reduce the plaintiffs’ overall award by $5,642.25, I was deeply troubled that Sunrise would pick away at the plaintiffs and cause them to incur additional costs to oppose the claim, such that any benefit they would derive from a finding of non-deductibility would be cancelled out by their costs to defend that sum.

[27] To be clear, this observation should not be taken to have any bearing on either my decision on this point or my costs analysis, which follows below. However, I cannot help but to note that Sunrise’s treatment of this issue is only one of many instances where their overzealous defence of this claim caused the plaintiffs to incur costs that they might otherwise have had to incur. I acknowledge that defendants have the right to defend a claim against them and to do so with the appropriate vigour. But at some point, having regard for the specific tragedy, the undisputed evidence by Sunrise staff on their specific inadequacies, and ultimately, the jury’s punitive award against Sunrise, one just might have expected that Sunrise might demonstrate some humility, even if late in the day. Regrettably, that was not evident.

b. Costs

i. Background

[28] To place the subject of costs into context, it is appropriate to understand what the claim was about, the complexity of the litigation, and the chronology of offers to and from the plaintiffs.

[29] Ms. Evelyn Coulson was a short-term resident at Sunrise North Senior Living Ltd. Very tragically, on the early morning of June 15, 2009, her neck got caught between her bed mattress and a halo device that was improperly attached to her bed and she choked to death. The tragedy was compounded by the fact that Sunrise advised Ms. Coulson’s children that their mother had died of natural causes. They only learned of the true cause of her death after they spoke to the coroner and after he showed them the bruising to their mother’s neck.

[30] The plaintiffs are Ms. Coulson’s immediate family. They commenced an action on May 13, 2011 against Sunrise North Senior Living Ltd., PRP Senior Living Operations Inc., 1488245 Ontario Ltd. carrying on business as Riska Medical / Surgical Supply, Kunde Healthcare Services, Inc., Kunde Healthcare Services and Michael Kunde. On September 14, 2013, the plaintiffs entered into a Pierringer Agreement with the defendants, 1488245 Ontario Ltd, carrying on business as Riska Medical/Surgical Supply and Kunde Healthcare Services Inc. In return, the plaintiffs signed a full and final release and the action against those defendants was dismissed.

[31] Sunrise continued to defend the claim. They made a first offer to settle the claim on December 15, 2015 for a global sum of $75,000. They made a second offer to settle just a few weeks before the commencement of the trial, on April 26, 2018, for the sum of $175,000 in damages to the plaintiffs and $15,000 compensation for Ms. Coulson’s funeral and out of pocket expenses, for a total offer of $190,000. I note that Ms. Coulson’s funeral and out of pocket expenses were not the subject of the trial. Thus, for comparison purposes, the relevant part of Sunrise’s offer is the sum of $175,000 on account of the plaintiffs’ claims.

[32] This second offer proposed FLA damages at various levels for all of the plaintiffs and a loss of income award for Mr. Coulson. There was nothing in the offer for Mr. Coulson’s claim for general damages. Nor was there anything on account of punitive damages. There was also nothing for legal costs that the plaintiffs incurred to the date of the offer.

[33] Both offers contemplated consent to the settlement by all of the plaintiffs and a dismissal of the claim without costs. There was nothing in the offer to suggest that it permitted one or more of the plaintiffs to accept the proposed offer.

[34] The plaintiffs responded with their own offer on April 28, 2018, which contemplated a global settlement in the sum of $585,000 plus costs and assessable disbursements, to be agreed upon or fixed by a judge.

[35] None of the offers were accepted and accordingly the parties proceeded to trial. As I noted in my overview, the jury returned awards for the Family Law claims and general damages and damages for loss of past and future income for Greg Coulson in the total sum of $614,300. They apportioned liability to Sunrise at 25%, such that Sunrise’s total contribution was reduced to $153,575. In addition, the jury awarded punitive damages of $25,000 only against Sunrise. Accordingly, the total damages owed by Sunrise to the plaintiffs came to $178,575.

ii. Applicable Legal Principles

[36] Against that outline, I find it appropriate to begin with a review of Rule 57.01 of the Rules of Civil Procedure, O. Reg. 575/07, s. 6 (1):

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 the 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 of 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. R.R.O. 1990, Reg. 194, r. 57.01 (1) ; O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.

[37] Rule 49.10 of the Rules of Civil Procedure has the following elements:

Plaintiff’s Offer

49.10(1) Where an offer to settle,

(a) is made by the plaintiff at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the defendant,

and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.

Defendant’s Offer

(2) Where an offer to settle,

(a) is made by a defendant at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.

Burden of Proof

(3) The burden of proving that the judgment is as favourable as the terms of the offer to settle, or more or less favourable, as the case may be, is on the party who claims the benefit of subrule (1) or (2).

[38] In addition to the Rules, it is recognized that the fixing of costs is to be governed by an overarching principle of reasonableness. The court’s discretion must be exercised in light of the specific facts and circumstances of the case as anticipated by Rule 57.01(1), see Boucher, Moon, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 75 O.R. (3d) 638, C.A.

[39] As well, although a consideration of experience, rates charged and hours spent are appropriate, these elements are subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount that the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, [2002] O.J. No. 4495 at para. 4, (C.A.).

iii. Analysis

[40] Having regard for these guiding principles and the particular circumstances of this case, a fair and reasonable outcome in this case is a costs award of $430,000 payable by Sunrise to the plaintiffs.

[41] I have come to my decision on the basis of the following considerations.

a) Was Sunrise’s offer of April 26, 2018 a proper Rule 49 offer?

[42] I have concluded that Sunrise’s offer of April 26, 2018 was not a proper Rule 49.10 offer and accordingly, the cost consequences that may have been engaged by a proper Rule 49 offer are not applicable. I agree with the plaintiffs’ submissions that an offer to settle between multiple plaintiffs that is non-severable is not a proper Rule 49 offer and cannot attract adverse cost consequences, see Lumsden v. Delpeche, [2003] O.J. No. 2248, Mayer et al. v. 1474479 Ontario Inc. [2014] ONSC 2622, and Hayden v. Stevenson, et al., 2010 ONSC 633.

[43] I disagree with Sunrise’s contention that this case may be distinguished from the cases referenced above and I actually find the submissions that, “it was impossible for the plaintiffs to play their claims off one another”, that “there was no term in the Sunrise defendants’ offer that stated it had to be accepted in its entirety” and that there “were no provisions in the terms of the offer that said that the terms were non-severable”, to be rather audacious and disingenuous.

[44] First, there was nothing in Sunrise’s offer to suggest that the offer was severable. On its face, the language was clear: “the plaintiffs” had to agree to execute a full and final release in favour of Sunrise and “the plaintiffs” had to consent to an Order dismissing the action without costs. Nothing on the face of the offer suggested severability.

[45] Second, I find it quite misleading for Sunrise to submit on the one hand that their offer, even if broken down by plaintiff, was a global offer and that the plaintiffs should have treated the offer as a global offer, but on the other hand to contend that the silence on the severability of the offer did not preclude its severability. I find these two views to be mutually exclusive and contradictory. If, as Sunrise submits, the plaintiffs should have treated the Sunrise offer as a global offer, how could some of the plaintiffs accept the offer and others continue to litigate?

[46] To further imply that the plaintiffs’ own global offer made Sunrise’s offer acceptable and therefore cured the severability defect in Sunrise’s offer, misses the point. The plaintiffs’ offer may have been global but it was for a very substantial sum. They also included a claim for their costs.

[47] More significantly, for the purposes of determining whether Sunrise’s offer meets the requirements of Rule 49, Sunrise’s offer must be considered on its own merit. As drafted, any suggestion that the break down of the awards implied severability was eclipsed by the requirement that all of the plaintiffs agree to the dismissal of the action. As an offer that was non-severable, it could not satisfy the requirements of Rule 49, see Mayer et al., supra., at paras. 114 and 115.

[48] I would also add that having regard for the totality of the evidence that the plaintiffs had to lead to support their various claims, it makes good sense that the offer could not be severable. Especially given Greg Coulson’s very substantial claims, unless all of the claims were settled, I do not see how there would have been any savings in trial time if some of the claims went forward. The court would have had to hear substantially most of the evidence that was presented whether that related only to the FLA plaintiffs, Mr. Coulson’s claims, or some combination.

[49] My preceding comment leads into my third finding that Sunrise’s submission that it would have been impossible for the plaintiffs to play off their claims and proposed Sunrise awards is wrong. Greg Coulson’s claims for general damages, loss of income, and punitive damages, stood in stark contrast to the remaining 13 plaintiffs who were only FLA claimants. The differences in the plaintiffs’ claims were also captured in the differences between the awards offered by Sunrise and the jury awards. On Sunrise’s own admission, Sunrise’s offer was more favourable to 9 of the 14 plaintiffs but less favourable to four of them. Most significantly, the offer was less favourable to Greg Coulson.

[50] When viewed in that light, the parties’ claims were very different and engaged very different considerations. The non-severable nature of Sunrise’s offer was particularly prejudicial to Greg Coulson’s claims, which included the claim for punitive damages. In the result, all of the plaintiffs were obliged to go to trial so that Greg Coulson could advance his claim.

[51] Given these findings and concerns, I can only conclude that Sunrise’s offer of April 26, 2018 did not meet the requirements of Rule 49, it was not severable, and accordingly, Sunrise cannot rely on it to advance its costs claim.

b) Is it Possible to Compare Sunrise’s Offer with the Jury Awards?

[52] Separate and apart from whether Sunrise’s offer met the requirements of Rule 49, its comparison to the jury’s awards is complicated by the differences in the heads of the various awards.

[53] To begin with, on its face, Sunrise’s offer of $175,000, having regard for the downward adjustment of $15,000 for Ms. Coulson’s funeral and related expenses that were not in issue in the trial, fell short of the jury’s net award to the plaintiffs of $178,575, even if only marginally.

[54] Here, I am obliged to correct Sunrise’s submission that the jury’s net award to the plaintiffs after apportionment came to $159,825. Sunrise arrived at that conclusion by apportioning the punitive damages across all of the defendants in accordance with the jury’s apportionment of liability. But the punitive award was only against Sunrise. For greater clarity, I reproduce the award figures as follows:

Total Family Law award for the 14 plaintiffs: $401,500 Greg Coulson’s total award: $212,800

TOTAL: $614,300 25% apportionment of liability to Sunrise: $153,575 Plus Punitive Damages against Sunrise: $ 25,000 TOTAL Award by Sunrise to the Plaintiffs: $178,575

[55] For argument’s sake only, had I concluded that the sum of $5642.25 on account of Mr. Coulson’s settlement with Brampton had to be deducted from the jury’s award, one would be comparing a difference between Sunrise’s $175,000 against a net award to the plaintiffs of $172,932.75, or a marginal difference of $2,642.25 in Sunrise’s favour.

[56] I would also add that whether I find a net award of $178,575 or $172,932.75 a numerical comparison with Sunrise’s offer would obscure the qualitative differences which are relevant to the overall comparison.

[57] First, Sunrise’s offer was not made until the eve of trial. The plaintiffs were obliged to incur very substantial trial preparations, which they claimed came to approximately $243,000 in fees and about $50,000 in disbursements. In addition, Sunrise’s April offer did not include anything for costs. Had the plaintiffs accepted Sunrise’s offer, they would have had to forego all of their costs and actually be indebted for the difference. In such circumstances, the plaintiffs were compelled to go to trial, even if only to salvage some of their costs.

[58] The more significant nuances to a comparison of the Sunrise’s April offer and the jury award rest with the qualitative dimensions of the jury’s award. Specifically, the jury awarded $140,000 in general damages for Greg Coulson, resulting in a net award against Sunrise of $35,000, and $25,000 for punitive award, exclusively against Sunrise.

[59] Having regard for the plaintiffs’ repeated aspiration to vindicate their mother’s tragic death, to recognize the magnitude of the harm to Greg Coulson, and to obtain the renunciation of Sunrise’s conduct, these two awards imported an intangible but highly symbolic value that exceeded their monetary value. In that sense it is difficult to compare that outcome with the Sunrise’s April offer because Sunrise offered nothing for either of these two heads of damages.

c) The Award of Punitive Damages

[60] The jury’s awarding of punitive damages against Sunrise is a very relevant consideration in my overall assessment of costs. I accept the plaintiffs’ repeated submission that the principal reason for proceeding with the trial was to make Sunrise accountable and responsible for its conduct in their mother’s ordeal and for the way that Sunrise interacted with Ms. Coulson’s children in the aftermath of the accident.

[61] The jury’s punitive award underscored the need to renounce Sunrise for its conduct. Having regard for all of the evidence before the court, I find very regrettably that Sunrise never really recognized its shortcomings and responsibilities to the plaintiffs, and more particularly, to Mrs. Coulson. Although counsel would have the court believe that Sunrise’s offer of April 26, 2018 represented an attempt to take some responsibility, the reality is that Sunrise’s offer represented little more than an attempt to forego what it would otherwise be spending for the trial. My finding is underscored by Sunrise’s claim of $150,000 for its trial costs. The proximity of that figure to the April 26 offer cannot be a coincidence.

[62] Against the overall backdrop of this case, I find that the only way for the plaintiffs to obtain a renunciation of Sunrise’s conduct was to go through with the trial. Having regard for the fact that punitive damages are the exception rather than the rule and are only awarded in exceptional circumstances, the jury’s award of $25,000 was significant and qualitatively represented a significant success for the plaintiffs. As such, this award is a very relevant consideration in favour of the plaintiffs’ costs claim.

d) Did the Plaintiffs obtain a jury award that was more favourable than Sunrise’s offer?

[63] Even if I were to conclude that Sunrise’s offer of April 26, 2018 were a proper Rule 49 offer and leaving aside the heads of damages that were awarded and the issue of costs, the strict arithmetical analysis leads to the following figures: a global jury award owed by Sunrise to the plaintiffs of $178,575 v. Sunrise’s offer of $175,000. On that analysis, the plaintiffs’ award exceeded Sunrise’s offer, even if only by $3,575. That then is a further reason to conclude that the plaintiffs should receive their costs of the action. The next task is to determine the appropriate quantum of costs and disbursements. To do that, I will review proceed to review the specific requirements of Rule 57.

1. (0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

[64] According to the Bill of Costs for the plaintiffs’ counsel, three lawyers and an articling student worked on this file. Michael Smitiuch was called to the Bar in 1998, Peter Cho was called in 2011, and Luke Hamer was called in 2013. All three brought to the court specific expertise for cases that involve personal injury and wrongful death claims. Mr. Smitiuch and Mr. Hamer were trial counsel and the high quality of their expertise and their outstanding level of preparedness was evident throughout the trial. I especially appreciated the various briefs that were prepared in advance of trial and available to address the various specific legal issues that surfaced as the case unfolded.

[65] With respect to their respective hourly rates, including any increases over the course of the litigation, I am satisfied that the rates claimed are reasonable. I disagree with Sunrise’s counsel that the rates are excessive. I also disagree with the submission that there was “excessive over-lawyering and overstaffing” on the file. Having regard for the 14 plaintiffs, as well as the demands, especially of Greg Coulson’s claims, and the 20 witnesses who testified, the time invested in the litigation of this action was reasonable and proportional to the issues at stake. In coming to this conclusion, I am guided by the Rules, but also by the dicta in Forbes & Manhattan v. URSA Major Minerals, [2011] ONSC 3911 at para. 29, and Bain v. UBS Securities Canada Inc., [2018] ONCA 190, at para. 32.

[66] I also agree with the plaintiffs’ submission that in the assessment of the amount of preparation to be allowed in a given case, counsel is entitled to incur significant legal expenses if the size of the case and the amount in dispute justifies such expenditure, see Tri-Associates Insurance Agency v. Douglas, [1986] O.J. No. 557, and Apotex Inc. v. Pharmaceuticals, [1991] 2729 (ONSC) at page 15.

[67] Furthermore, in light of the fact that the plaintiffs’ Bill of Costs provides the court with substantial details of the hours spent and the tasks performed, it is appropriate for the court to take a global approach to the costs claimed.

[68] Finally, I accept that the determination of costs is not a mechanical exercise and that I ought not to second guess the amount claimed unless what is claimed is clearly excessive and overreaching, see T. Archibald, G. Killeen, J.C. Morton, Ontario Superior Court Practice, 2017 Edition. (Markham: LexisNexis Canada, 2016) at page 1699, Fazio v. Cusimano at para.8, and TMS Lighting v. KJS Transport, 2014 ONSC 7148 at paras. 15 and 16.

2. (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

[69] In my review of the submissions, I am satisfied that the sums claimed by the plaintiffs would have been within Sunrise’s contemplation. The comparative costs claims by the plaintiffs and the defendants offers a good measure of Sunrise’s expectations. I note the following comparators: On the time claimed for the approximately 4 week trial, the plaintiffs seek costs of $203,693.80 and Sunrise claims $150,992.97. On the activities leading up to trial, the plaintiffs claim $243,317.25 and the defendants claimed $95,146.

[70] Working backwards and beginning with the costs of the trial and recognizing that the evidentiary burden rested on the plaintiffs, I actually do not find the difference of almost $50,000 between the two sides to be that remarkable. Counsel for the plaintiffs had the added burden of having to arrange for witnesses to testify from Australia and from Sunnybrook Hospital where one of the witnesses was confined. If anything, the comparison leads me to conclude that counsel for both sides followed similar practices and therefore neither could be said to have incurred excessive expenses. I might add that the costs claimed are very reasonable given the length of the trial of approximately four weeks, that included a substantial ruling on Greg Coulson’s negligence claim.

[71] For the period between the commencement of the action and trial, while I appreciate the substantial differential between the parties, the 2.5:1 ratio is not excessive, having regard for the specific claims before the court and for the fact that it was the plaintiffs who had the burden to prove their very claims.

[72] I may have been concerned about that differential if all that was at stake were the plaintiffs’ FLA claims. However, Greg Coulson’s claims for general damages and for loss of income required very substantial pre-trial work that required the involvement of medical, vocational, and forensic accounting expertise. The negligence claim also required the testimony of various experts to address issues pertaining to the standard of care applicable to institutions such as for Sunrise. Moreover, the claim for punitive damages required an extensive evidentiary foundation in order to underscore the magnitude of Sunrise’s failing.

[73] Against the totality of these considerations, for a claim that was commenced in February 2011, that was amended a few times, and that moved to a trial within 7 years, the total costs up to trial of $243,317.25, which included the very substantial preparation for trial, would have been within Sunrise’s contemplation.

[74] All that said, as I take a global review of counsel’s Bill of Costs, while I decline to do a line by line review, I do note some duplication of effort by counsel and accordingly, I round down these costs to an award of $235,000.

3. (a) the amount claimed and the amount recovered in the proceeding

[75] I agree with Sunrise’s observation that the plaintiffs’ net recovery of $178,575 fell short of what they hoped to recover. I can certainly agree that given the plaintiffs’ submissions on the apportionment of liability against Sunrise at 70%, the resulting 25% also fell short of their expectations on any account.

[76] That said, for the purposes of the cost analysis, I am unable to ignore the fact that the jury made very substantial awards for Greg Coulson’s general damages claim and for punitive damages. The figures of $140,000 and $25,000 respectively are significant.

[77] And yet, even with those figures in mind, whether I compare the outcome to the plaintiffs’ expectations, as reflected in their counsel’s submissions to the jury or their offer of April 28, 2018, the jury’s net award against Sunrise did not come anywhere close to their expectations. This is problematic. The plaintiffs’ claim for fees and disbursements comes to $478,695.51, exclusive of the additional claim for costs thrown away on account of the trial adjournment in November 2017. Even with my recognition of the plaintiffs’ modest means, the significance of the issues before the court, and Sunrise’s generally unsavoury engagement with the issues at stake, there is something very troubling in the disproportion between the results obtained and costs for those results.

[78] In the same vein, I have concerns that counsel for the plaintiffs’ may have overshot the mark in the requests that were made of the jury, as those related to the apportionment of liability and punitive damages. Having regard for the high stakes in any litigation but especially in a case such as this one where the plaintiffs were seeking to make a point, going as far as to possibly make new law, they must also take some responsibility for the associated costs. Hindsight of course is 20/20, but having regard for the jury’s gross award, I can only note that a more modest liability apportionment request against Sunrise by the plaintiffs would have yielded a far greater net award.

The totality of these concerns lead me to conclude that an appropriate award for costs would be one that allows the plaintiffs’ partial indemnity costs up until the commencement of the trial, subject to my scrutiny for duplication of effort. For the trial proper I find it appropriate to reduce the plaintiffs’ trial costs from a claim of approximately $200,000 to an award of $80,000.

Concerns about proportionality also informed my decision round-down the costs up to trial by a small sum.

4. (b) the apportionment of liability

[79] For the reasons already discussed in the preceding paragraph, even with the considerations in favour of the plaintiffs and having regard for the court’s inherent discretion, the jury’s apportionment of 25% liability to Sunrise is a reality that cannot be overlooked. The qualitative significance of the punitive damages award against Sunrise operates to some degree as a counterweight to the outcome on apportionment to permit some costs for the trial but it cannot extend as far as to eviscerate the implications of the jury’s finding on the apportionment on liability. In these circumstances, the reduction of the trial costs to $80,000 in fees is an appropriate and reasonable award.

5. (c) the complexity of the proceeding and (d) the importance of the issues

[80] Contrary to Sunrise’s submission, this action was no ordinary claim. Underlying the FLA and the negligence claims were principles of fundamental honesty, safety and trust that members of the public are entitled to have when they retain the services of a service provider to care for an elderly and vulnerable individual. These are very important issues and the plaintiffs had to go to extraordinary lengths to lead the evidence necessary to address them. Greg Coulson would not have obtained the punitive award without that effort.

[81] The magnitude of the complexities was reflected in the number of issues before the court, the multiple questions that the jury had to answer, and the evidence from twenty witnesses over the course of a four-week trial. The plaintiffs’ efforts and costs to pursue their claim were compounded by Sunrise’s exceptionally vigorous defence. As I already stated, while I am not suggesting that Sunrise should not have defended the action, their aggressive approach resulted in increased costs for the plaintiffs. In such circumstances, Sunrise’s tactical decisions in their approach to the litigation had a cost to the plaintiffs and they therefore have to be taken into account in my overall consideration of an appropriate costs award.

6. (e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding

[82] Counsel for both parties worked diligently and collaboratively, at least before me, to allow for an efficient trial. There could have been a savings of a few days of trial time had they finalized their questions for the jury in advance of the trial. But I also recognize that they may still have had to argue a voir dire with respect to Greg Coulson’s claim. In short, neither party contributed unnecessarily to the duration of this proceeding.

7. (f) whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution

[83] This consideration is not engaged in this case. As already noted, counsel for both sides worked diligently and efficiently, and as I said to them in court, separate and apart from the positions they took on behalf of their clients, their professional and respectful conduct and interaction with the court is a credit to the legal profession.

8. (g) a party’s denial of or refusal to admit anything that should have been admitted

[84] There was no evidence before the court that this consideration was engaged.

9. (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

[85] This factor was not engaged in this litigation.

10. (i) any other matter relevant to the question of costs

[86] As I already explained above, the difficult nature of the case, the great expense to which the plaintiffs were put to get to trial, the dramatic losses they all suffered and the need to relive the experience of seeing their deceased mother, learning of the real reason for her death, and then in Greg Coulson’s case requiring him and his son to recount Greg’s disastrous difficulties once he understood the cause of Ms. Coulson’s death, which included an attempted suicide, all serve to underscore the magnitude of the claim. These elements collectively, together with the preceding analysis, operate to support a substantial cost award in the plaintiffs’ favour, even if I decline to grant them their full claim.

Costs Thrown Away

[87] The plaintiffs also seek costs thrown away in the sum of $66,694.53 for costs thrown away as a result of Sunrise’s request to amend their statement of defense in November 28, 2017, which was a little over a month before the trial was due to begin. Price J. granted leave for the requested amendment but also adjourned the trial to the May 2018 blitz period. He also reserved the issue of costs thrown away to the trial judge, to be paid in any event of the cause. He also made the observation that “certainly not all of the preparation costs will be wasted.”

[88] Neither side spent much time in their submissions on this particular issue. In my review of Mr. Smitiuch’s Bill of Costs, I find it very difficult to identify the true costs thrown away. I accept that some of the preparation would have had to be repeated in April 2018, leading up to the trial but I would have also expected much of the preparation would be preserved. I further note that Price J. required plaintiffs’ counsel to produce their dockets, which they did not do. Accordingly, I fix costs thrown away at $27,000, inclusive of costs and disbursements.

Disbursements

[89] On the disbursements claimed by the plaintiffs, I find them to be reasonable and necessary for the pursuit of their claims and are therefore payable by Sunrise. In coming to this conclusion, I considered the submissions of the parties but I am also guided by the judgments in Hamfler v. Mink at paras. 17 and 18 and Bombardier Inc. v. AS Estonian Air, 2013 ONSC 4209 at paras. 10 to 12.

[90] I have considered Sunrise’s specific objections to the disbursements and make the following observations. As an overriding observation, Sunrise’s approach to the plaintiffs’ disbursements is consistent with its overall approach to aggressively deprive the plaintiffs of as much as possible. As I read and re-read Sunrise’s submissions I had to ask time and again, who was the wrongdoer here? That said, there are some costs claimed that are questionable and accordingly, I reduce the disbursements by $710 dollars and fix the disbursements at $88,000. For the sake of completeness, I find it appropriate to review the specific concerns and give my reasons for my findings.

a) The effect of Sunrise’s April 26, 2018 Offer

[91] For the reasons already discussed, Sunrise’s offer was not a proper Rule 49 offer and accordingly, Rule 49 considerations are not engaged. Even if it were a proper offer, after the appropriate adjustments, the plaintiffs beat Sunrise’s offer by a few thousand dollars and accordingly, I see no reason to deprive the plaintiffs of the costs of their disbursements. In any event, I note that of the $88,709.91 in disbursements costs and applicable taxes, the sum of $50,108.12 was incurred prior to the date of the offer.

b) Disbursements related to Natalie Molin

[92] I allow the disbursements related to Ms. Molin. Sunrise’s rejection of that cost for failure to testify is misleading and fails to take into account the reasons that prevented her from testifying. Ms. Molin was retained to speak to issues of liability by an institution such as Sunrise.

[93] I accept the plaintiffs’ indication that Ms. Molin’s report was necessary and proper expense to advance their action. I also accept that when after two and half years from the preparation of her report she accepted employment with the Ministry of Health and Long Term Care, she may have been confronted with a potential conflict of interest should she be obliged to testify in this action. The conflict of interest was not brought to the plaintiffs’ attention until the letter of May 8, 2018. The plaintiffs had no choice but to scramble to obtain an alternate expert.

[94] While it is not uncommon for material changes to occur in a witness’s availability for trial, the plaintiffs should not be penalized for such a development. Moreover, I have the sense that counsel on both sides benefited significantly from Ms. Molin’s analysis. The plaintiffs’ counsel likely used that analysis to frame their specific issues. Sunrise’s counsel received the report and gained substantial insight on the depth of the plaintiffs’ concerns. Accordingly, I reject the suggestion that the plaintiffs be denied the disbursements associated with Ms. Molin.

c) Costs for Katherine Smith

[95] The total disbursement for Ms. Smith’s involvement and testimony is allowed. I disagree with Sunrise’s submission that the cost related to Ms. Smith should be reduced because of the limited purpose of her testimony. I accept the plaintiffs’ submission that even if Ms. Smith did not testify to each of the points contained in her report, it was prudent and reasonable to have her canvass all areas of liability.

[96] Having regard for the fact that much of how the parties proceeded with Ms. Smith’s testimony was the subject of an agreement, I see no basis to look behind that agreement to apportion costs or otherwise reduce the cost of $13,106.25.

d) Private Mediation Costs

[97] The dispute on this issue is over a sum of $3,060 for a process that had the potential of leading to a settlement. Sunrise’s objection to this cost makes no sense, especially given their pronounced criticism of the plaintiffs’ failure to accept their April 2018 offer. I accept the plaintiffs’ observation that to disallow such a cost would discourage parties from attempting to resolve their claims. I also see this objection as just one more instance of Sunrise’s attempt to reduce the plaintiffs’ entitlement to costs.

e) Private Investigator

[98] I allow this expense as I accept the plaintiffs’ explanation that they had to hire a private investigator to investigate how Sunrise held themselves out to potential residents. The characterization of Sunrise’s services, the specific services offered to people suffering from various types of dementia and the corresponding standard of care was a very live issue during the course of the trial. Having regard for the cases that have held private investigation services to be recoverable as a disbursement, on the totality of the evidence before me, this is an appropriate charge.

f) All other expenses

[99] For all other charges, although most are reasonable, there are some, such as costs claimed for mileage, certain teleconferences, meals at trial, and parking, that are questionable at best. The most practical approach is to reduce the disbursements by $710. On the specific issue of the summons to witnesses, I find them to be reasonable, even if the proposed witnesses were ultimately not called are appropriate expenses. I accept counsel’s explanation that they had to have their witnesses lined up and ready to go in the event that they did not appear voluntarily. Trials are dynamic. The testimony of some witnesses may obviate the need for others. Or, parties may have to change their strategy and shift their focus as the evidence unfolds in court. To be ready to adjust one’s sails, without causing delay to the trial progress, counsel have to be thoroughly prepared and anticipate their potential witnesses. As I already noted, counsel for both sides were very well prepared. To deprive a party of some of those costs would only serve to discourage the adequate preparation of the litigants.

Costs for the Costs Submissions

[100] Neither party made costs submissions with respect to the costs of the motion on deductibility and the costs of the action. Having regard for the outcome of this decision, the volume of the submissions received, the oral submissions, the supplementary submissions, and finally, the overall outcome, I fix these costs in favour of the plaintiffs at $15,000.

Conclusion

[101] In light of the foregoing analysis, I conclude that the plaintiffs are entitled to the costs of the action, which I fix globally at $430,000. The constitutive elements of that global figure are: i. fees up to trial: $235,000; ii. fees for the trial: $80,000; iii. disbursements: $88,000; iv. costs thrown away on account of the adjournment at $27,000; and v. costs of this motion: $15,000, for a total award in the plaintiffs’ favour of $445,000.

Tzimas J.

Date: May 28, 2019

COURT FILE NO.: CV-11-2015 DATE: 20190528 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Cheryl Ann Yelland, Estate Trustee for the Estate of Gerald Coulson, Deceased, Deborah Gail White, Gordon G. Coulson, Lynn Cunningham-O’Connor, Cheryl Ann Yelland, Gregory A. Coulson, Shane Cunningham, Megan White-Fox, Deborah Gail White, Litigation Administrator of the Estate of Justan Tobin, Deceased, William R.L. Yelland, Hank R. J. Yelland, Jordan M. Coulson and Jeffrey A. Coulson AND: Sunrise North Senior Living Ltd., PRP Senior Living Operations Inc. ENDORSEMENT ON DEDUCTIBILITY OF SETTLEMENT and COSTS Tzimas J.

Date: May 28, 2019