Court File and Parties

COURT FILE NO.: CV-16-00000056-0000 DATE: 25 June 2019

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

STEVEN STEWART, TARA STEWART, MACKENZIE STEWART by her litigation guardian Steven Stewart, DESIREE STEWART by her litigation guardian Steven Steward and ALEXIS STEWART by her litigation guardian Steven Stewart Plaintiffs

– and –

TRACY WOOD, JENNIFER SALMON and GERALD STENVERS Defendants

Counsel: Kristian Bonn, for the Plaintiffs Scott McMahon, for the Defendants Salmon and Stenvers

HEARD: Written Submissions

TAUSENDFREUND, J.

COSTS ENDORSEMENT

Overview

[1] This personal injury action settled on April 26, 2019, 10 days prior to the start of a scheduled three week trial. The parties agreed upon the Plaintiffs’ damages of $75,000 and that the issue of costs and disbursements be referred for assessment to a Justice of this court.

[2] The parties provided written costs submissions. They also agreed that their pre-trial memoranda could be submitted to me for review. My costs decision now follows.

Background

[3] At about 10:00 p.m. on January 5, 2015, the Plaintiff, Steven Stewart was driving on an unlit rural road on his way to work for the night shift. Two horses suddenly appeared in front of his car. One horse escaped. He struck the other. The crash caused severe damage to the car and killed the horse. He suffered a concussion and soft-tissue injuries to his neck and back.

[4] The Defendant, Tracy Wood owned the horse that was hit. She was renting the farm property at 4294 Stirling-Marmora Road, adjacent to the scene of the collision. The evidence of ownership of the second horse is unclear.

[5] The Defendants, Salmon and Stenvers are the registered owners of the property in question, which they had rented to Ms. Wood.

[6] The Plaintiffs started this action on February 10, 2016. They collectively claimed damages of $1,200,000.

[7] Ms. Wood failed to defend the action. She was noted in default on May 15, 2017.

[8] Until the date of settlement, liability remained a contested issue. It was clear that the horses had apparently escaped their paddock and were roaming freely on a travelled road. However, there was no definitive evidence of how the horses escaped. The Defendants, Stenvers and Salmon took the position that they were not liable as owners and landlords of the property.

[9] The Plaintiff, Steven Stewart was 38 years old at the time of the collision. He was then temporarily working at Auto Systems in Belleville at $11 per hour. He had recently obtained his Electrical Technician’s diploma and was in the process of applying for a job with Ontario Power Generation. He was scheduled to take an aptitude test for that position. His injuries in this accident caused him to cancel that scheduled test.

[10] As a result of his injuries, he was unable to return to work for 2.5 years.

[11] There was significant dispute regarding the nature and extent of Mr. Stewart’s injuries. He alleged that the accident caused him to suffer a mild traumatic brain injury and chronic pain to his neck and back. This was vigorously disputed by the Defendants.

[12] Counsel for Mr. Stewart retained a number of medical specialists for opinions on the nature and extent of Mr. Stewart’s injuries. These included an optometrist with particular interest in neuro-optometric rehabilitation, a radiologist to interpret MRI and SPECT scans, a pain specialist and an actuary.

[13] In September 2017, 2.5 years after the accident, Steven Stewart returned to the workforce. He obtained full-time employment with a manufacturer of tissue products. The following year, he obtained a promotion as a millwright apprentice. Once qualified as a millwright, his salary is expected to be similar to what he would have earned, but for this accident.

Offers to Settle

[14] Both sides made offers to settle.

[15] On January 12, 2018, the Defendants offered to settle for $7,500, with the action to be dismissed on a without costs basis.

[16] On September 10, 2018, the Defendants made a second offer, now for $25,000 inclusive of all damages, PJI and costs.

[17] On December 7, 2018, the Plaintiffs offered to settle for $125,000, all in.

[18] On December 17, 2018, the Plaintiffs made a written Rule 49.10 Offer to Settle for $99,000, plus costs to be agreed upon or assessed.

[19] On March 8, 2019, the Defendants offered to settle for $75,000, all in.

[20] On March 11, 2019, the Plaintiffs served a second Rule 49.10 Offer to Settle for $75,000 plus costs to be assessed or agreed. In a letter of the same date, counsel for the Plaintiffs advised that the Plaintiffs had incurred disbursements to date of $25,000 and that the Plaintiffs would be prepared to settle for the amount of $115,000, all in. That offer was not accepted.

[21] During an “exit” pre-trial held on April 26, 2019, the parties agreed to settle the action for $75,000 payable to the Plaintiffs for damages and interest and to have the costs assessed by a Judge of the Superior Court.

Issues Re: Plaintiffs’ Costs

[22] The statement of claim was filed February 10, 2016.

[23] The Plaintiffs seek costs at partial indemnity rates in the amount of $95,096 plus HST of $12,362 for a total of $107,458. They also seek disbursements of $29,070. Included in the list of disbursements is the insurance premium of $1,458 the Plaintiffs paid to obtain $100,000 coverage for possible adverse costs insurance. The Defendants state that it is settled law that such an insurance premium is not a recoverable disbursement. I disagree. There are conflicting opinions on this issue. Milanetti, J., Reilly, J. and Firestone, J. respectively in Markovic v. Richards, 2015 ONSC 6983, Foster v. Durkin, 2016 ONSC 684 and Valentine v. Rodriguez-Elizalde, 2016 ONSC 6395 each held that the premium for adverse costs insurance is not to be reimbursed by the Defendants as a compensable disbursement. I then turn to Armstrong v. Lakeridge Resort Ltd., 2017 ONSC 6565. Salmers, J. in that decision held that the costs insurance premium was a compensable disbursement. Salmers, J. noted at para 21:

“Without costs insurance, the fear of a very large adverse costs award would cause many Plaintiffs of modest means to be afraid to pursue meritorious claims. It is in the interests of justice that Plaintiffs be able to pursue meritorious claims without fear of a potentially devastating adverse costs award.

[24] I find adverse costs insurance to be an “access to justice” issue. For that reason, I hold it to be a compensable disbursement to be included as a costs obligation payable to the Plaintiffs. This amount is $1,458.

[25] The Defendants state that disbursements relating to the Defendant, Wood who did not defend the action and was noted in default should not be visited on the remaining Defendants. I disagree. These disbursements include service, notice of examination, summons to witness and service of trial summons. Firstly, all Defendants needed to be served. Resolution of liability as of that date had not moved beyond its incubation stage. Secondly, the Defendant Wood likely would have been an important witness for the Plaintiffs on the issue of liability.

[26] The Defendants also take issue with the number of experts retained by the Plaintiffs. These include:

a. Dr. Sohan Pal – A pain expert to provide evidence of physical impairment; b. Dr. Brooker – A Neuro Psychologist to provide evidence of psychological impairment and brain injury; c. Dr. Siow – A Neuro Radiologist to provide evidence on imaging to demonstrate that Steven Stewart had likely suffered an organic brain injury from the collision; d. D.L. Alan Mills – A vocational expert to provide evidence on Steven Stewart’s employability; e. Vivek Gupta – An actuary to quantify past and future loss claims.

[27] This matter was set for a three week trial. Issues of liability and damages were all in dispute. In the face of opposition, the matter was expected to go to trial. The Plaintiffs marshalled relevant evidence to prove their case. That included opinions from experts relating to the Plaintiffs’ injuries and damages. I find that the involvement of these multiple experts on these facts was reasonable: see Dhar v. McGuinness, 2019 ONSC 2603 at para 42.

[28] I remind myself that the amount I award for costs must be fair and reasonable and that the measure of what is fair and reasonable is generally considered to be the amount that an unsuccessful party could reasonably expect to pay for costs: see Bourcher v. Public Accountants Council for the Province of Ontario, [2004] 71O.R.(3d)291.

[29] The amount sought by the Plaintiffs exceeds the amount of the settlement. I note that the mere fact that this is so does not render such an award as inappropriate: see Vonaiuto v. Pilot Insurance Company, 2010 ONSC 1248 at para 7. As Lane, J. wrote in the decision 163972 Canada Inc. v. Isacco, [1997]O.J. 838:

“That the costs significantly exceed the amounts at stake in the litigation is regrettable, but it is a common experience and is well known to counsel as one of the risks involved in pursuing or defending a case such as this to a bitter end rather than finding a compromised solution. To reduce the Plaintiff’s otherwise reasonable costs on this basis would simply encourage the kind of intransigence displayed by the Defendants in this case.”

[30] As noted above, the parties reached an agreement on the quantum of damages. However, that occurred but 10 days prior to the start of the scheduled three week trial. The Plaintiffs by then would likely and in fact were expected to have been fully prepared to proceed to trial. A compromised resolution as a settlement should, in a perfect world, occur not long after all of the available evidence is on the proverbial table. In this case, that was likely long before trial preparation had begun in earnest.

[31] Applying the principle of proportionality, I assess the Plaintiffs’ claim for fees at $75,000 plus HST of $9,750 and disbursements fixed at $29,070.

Tausendfreund, J. Released: June 25, 2019