Court File and Parties
SUPERIOR COURT OF JUSTICE (ONTARIO)
RE: Estate of Steven Marcotte, Tammy Marcotte, Lynn Colynuck, Lee Ann Tomasic, Trystin Beattie, Alysha Beattie and Tyler Beattie (Plaintiffs)
- and –
David Bobar, 690681 Ontario Inc. carrying on business as Come by Chance Restaurant, John Lynch, Twenty Mach Restaurant Services Ltd, carrying on business and Boston Pizza, Gene’s Ltd., Grant Koropatnicki, carrying on business as the Endzone Bar and Grill, The Endzone Bar and Grill Inc., King Rose G.P., the Strongman Group, and Intact Insurance Company, (Defendants)
BEFORE: A. J. Goodman J.
COUNSEL: C. Tittarelli, for the Plaintiffs D. Wallace, for the Defendant, Intact Insurance Company
C O S T S E N D O R S E M E N T
On June 24, 2019, I ruled in favour of the defendant, Intact Insurance Company’s (“Intact”) summary judgment motion. The sole issue on the motion was whether a farm tractor operated by the defendant, David Bobar was an “automobile” for the purposes of granting the plaintiffs’ coverage under the uninsured and underinsured provisions of Intact’s policy.
As I stated at the time of my ruling, I held that a farm tractor was not an “automobile” for the purposes of Intact’s coverage liability, as that issue was previously decided by the Ontario Court of Appeal in Regele v. Slusarczyk, 1997 CarswellOnt 1354. I concluded that the Court of Appeal’s decision was binding on me and dismissed the action as against Intact.
At the conclusion of the motion, I invited the parties to resolve the issue of costs or to furnish their costs arguments. I have received the parties’ respective costs submissions.
Intact seeks costs from the plaintiffs, on a partial indemnity basis, as outlined in the Bill of Costs in the total amount of $16,311.32.
Positions of the Parties:
Intact submits that they were not only entirely successful in this motion, but that the plaintiffs were advised of the legal applicable principles arising from the Regele decision. Various overtures were made by Intact to the plaintiffs commencing in May 2017 to September 2018, of which letters were included in the materials. In essence, Intact invited the plaintiffs to accept a dismissal of the claim as against this insurer without costs. No formal offer to settle was rendered. However, there was discussions of amounts to resolve the costs issue as between counsel that were held post-ruling, which apparently did not come to fruition.
Although letters were written to the plaintiffs on several occasions in an effort to resolve this action, no response from the plaintiffs was received to Intact’s May 2, 2017 and September 18, 2018 correspondence. Intact says that the plaintiffs should have acknowledged the binding authority from the Court of Appeal without the necessity of this summary judgment hearing. As a result, this caused Intact to incur additional fees and lengthened these proceedings. Intact submits that its Bill of Cost is reasonable.
The defendant submits that the costs sought by Intact are excessive. The plaintiffs add that the issue was unique and warranted litigation, which ought to have distinguish it from the Regele decision. The plaintiffs’ submit that this was an issue from which the public in general will benefit from a determination and thus, the plaintiffs should not bear the costs. In any event, the plaintiffs’ submit a reasonable amount of costs in favour of Intact should be limited to $5,000, all inclusive.
Legal Principles:
As a general principle, costs are in the absolute discretion of the court. The fixing of costs is not simply a mechanical exercise. The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”.
The Court of Appeal, in Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579, (2004) 71 O.R. (3d) 291, articulated the principles that govern costs assessments. In that case, Armstrong J.A. noted that Rule 57.01(3) provides: “When the court awards costs, it shall fix them in accordance with subrule (1) and the tariffs.” He continued: “…Subrule (1) lists a broad range of factors that the court may consider in exercising its discretion to award costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43”.
It is a well-settled principle that the successful party should have its costs and there is no good reason in the present circumstances to depart from this legal principle.
The court must, first and foremost, be fair and reasonable when exercising its discretion to award costs. Proportionality is of fundamental import.
Factors to be Considered in Fixing Costs:
- Rule 57.01(1) contains what amounts to a non-exhaustive checklist of factors that should guide the court in its reasoning when awarding costs in the exercise of its discretion under section 131 of the Courts of Justice Act. Rule 57.01(1) provides, in part:
In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider…
(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;
(c) the complexity of the proceeding;
(d) the importance of the issue;
(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
(i) any other matter relevant to the question of costs.
- The amount of costs on a motion varies widely depending on the circumstances, including the complexity of the issue, of facts, and the witnesses from whom evidence is required.
Discussion:
With respect, I do not accept the plaintiffs’ characterization of this motion. The law is settled in this case and the facts arising here did not rise to the level of unique. It seems to me that the plaintiff not only chose to ignore Intact’s counsel’s letters, but chose to continue with the action against Intact, despite the clear jurisprudence from the Court of Appeal.
At the end of the day, Intact was entirely successful. There is no reason why they ought not to be paid their reasonable costs associated with defending this action on a partial indemnity basis.
Bill of Costs:
It is widely accepted that the appropriate quantum of costs is not determined by multiplying hours by rates. Rather, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding. There must be practical and reasonable limits to the amounts awarded for costs and those amounts should bear some proportional connection to the amount that should reasonably have been contemplated. I note that it is not necessary for me to have to go through the hours, or disbursements, line by line, in order to determine what the appropriate costs are. Nor is the court to second-guess the amount of time claimed unless it is clearly excessive or overreaching.
I observe that the substantive motion had a low degree of complexity. It did not engage a novel point of law or unique factual determination that was required to be litigated. This motion had the potential for significant impact on Intact’s exposure in this cause of action. Intact’s counsel is competent with many years of experience. From my review, I am satisfied that Intact counsels’ fees and hours expended for the summary judgment motion and entire action, along with the disbursement incurred are entirely reasonable.
However, in their costs submissions, Mr. Wallace fairly and reasonably concedes that Intact would have accepted an all-inclusive costs award of $7,500, including an agreement not to enforce the award. I am informed that the amounts raised during verbal discussions between counsel was not accepted. I see no reason to reduce the amounts sought here by Intact on the basis of any failed negotiations to resolve the issue of costs.
Conclusion:
- A costs award should be fair, proportionate and tailored to the circumstances of the case. In the exercise of my discretion under Rule 57.01 and the relevant authorities, it is ordered that the plaintiffs’ pay costs in favour of Intact on a partial indemnity basis fixed at $16,311.32 (all inclusive), payable within 30 days.
Justice A. J. Goodman
Date: August 16, 2019