Court File and Parties
COURT FILE NO.: CV 16-28 DATE: 2019/09/06
SUPERIOR COURT OF JUSTICE - ONTARIO
Between ROBERT DAVIDSON, Plaintiff
AND: REGAN HOSKIN and RIORDAN CAR AND TRUCK RENTALS INC., Defendants
BEFORE: Turnbull, J.
COUNSEL: I. Iwasykiw, Counsel, for the Plaintiff Richard Campbell, Counsel for the Defendants
COSTS ENDORSEMENT
[1] This trial was heard over four days in April 2019 and written reasons for judgment dismissing the plaintiff’s action were released to the parties on June 3, 2019[^1]. I requested counsel to provide me their submissions on costs in writing if they were not able to resolve the issue. I have received written submissions from the plaintiff dated June 10, 2019 and reply submissions from counsel for the defendant dated June 28, 2019.
Purpose of Costs Orders:
[2] In Fong v. Chang (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), the court stated the following:
Modern cost rules are designed to foster three fundamental purposes:
To indemnify successful litigants for the cost of litigation;
To encourage settlements; and
To discourage and sanction inappropriate behaviour by litigants.
[3] A corollary to the indemnification principle can be added. In assessing damages, the court must always be mindful to award a quantum of costs which is fair and reasonable to the unsuccessful party who must pay them and which takes into account the expectations of the parties concerning the quantum of a costs award. Atlantic Financial Corporation v. Henderson (2007), 2007 CanLII 19791 (ON SC), 86 O.R.(3d) 121 (S.C.J.). If a general idea of the costs exposure facing a litigant can not be estimated by his/her counsel, the uncertainty of possible costs awards can negate efforts of the parties to settle litigation. Put another way, parties to litigation need to be able to assess their total financial exposure with some degree of accuracy before making decisions to litigate or settle.
[4] In assessing costs, the court is not just to take those principles into account. It is also to be guided by the factors specified in Rule 49 (Offers to Settle) and Rule 57.01(1) (factors for the court to take into account in assessing costs) of the Rules of Civil Procedure.
[5] The defendants served an Offer to Settle this action on January 30, 2017. In that document, the defendants offered to pay the plaintiff $5,000 inclusive of all claims, damages, interest and costs if the offer was accepted within 30 days. After January 30, 2019, the Offer to Settle provided that the defendants would pay the plaintiff $5,000 inclusive of all claims, damages, interest and costs, less the legal expenses incurred by the defendants jointly since the inception of the action. The Offer to Settle remained open for acceptance until one minute after the commencement of trial unless previously withdrawn in writing. It was never withdrawn, nor was it accepted.
[6] I find that the Offer to Settle complies with Rule 49 of the Rules of Civil Procedure and triggers the effects of the costs codification of that Rule. The defendants are entitled to their costs on a partial indemnity basis to January 30, 2017 and their costs on a substantial indemnity basis thereafter. (Rule 49.10 (1)).
[7] I find the following factors relevant under Rule 57.01 (1) in assessing costs in this matter.
[8] The plaintiff claimed $1,000,000 in damages and recovered nothing. The proceeding was not overly complex factually or legally. The evidence canvassed just five commercial transactions with respect to the plaintiff’s efforts to lease and finance semi-trucks.
[9] The issues were of importance to both parties. The plaintiff, as mentioned, was seeking a significant monetary award and if successful, it would have arguably allowed him to resume his career in the trucking industry. As for the defendants, the order to make payment of a large damages claim would obviously have imposed a significant financial burden upon them.
[10] I do not find that there were any steps taken in this proceeding which was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution. I also do not find that either party denied or refused to admit anything that should have been admitted.
[11] However, I did find in my judgment that the plaintiff had failed to properly produce evidence related to his damages claim and that he failed to call viva voce evidence from certain witnesses who he ought to have brought before the court. On the other hand, the defendant Hoskin was not totally faultless in this matter. He made certain comments of an implicitly negative nature about Mr. Davidson which added fuel to the fire leading to this unnecessary firestorm of allegations and litigation. Hence, I do not think the defendants are entitled to full indemnity costs after the date of serving the Offer to Settle. I also would not be inclined to grant full indemnity costs to the defendants as our courts have held that misguided litigation (in other words, unsuccessful litigation) does not warrant censure [^2] in the form of full indemnity costs.
[12] In considering the reasonable expectations of the parties, counsel for the plaintiff has filed a copy of her solicitor-client bill in which the plaintiff incurred costs of $39,216.33. She has submitted that the maximum amount of costs to which the defendants are entitled is $25,000.
[13] The defendants have filed a costs outline in which they claim $43,597.65 for fees, $5,667.69 for HST on fees and disbursements of $1701.24. I have reviewed the disbursements and allow them as claimed.
[14] Mr. Campbell was called to the bar 20 years ago and bills his time at $350 per hour on a partial indemnity basis and $390 per hour on a full indemnity basis. I do not find his hourly billing rate to be unreasonable on a full indemnity basis but would reduce the partial indemnity rate to $260.00 per hour which is about sixty six per cent of the full indemnity rate. I allow Mr. Campbell his time after the date of service of the Offer to Settle (January 30, 2017) on a substantial indemnity basis at $350 per hour. I note that counsel for the plaintiff, who was called to the bar in 2018, billed her time at $350 per hour on a full indemnity basis.
[15] The amounts claimed for his law clerks are fair and reasonable. Both are university educated people. Ms. Witmer has 28 years experience as a law clerk and her time is billed at $135 per hour on a partial indemnity basis. Mr. Killingbeck has 17 years experience as a law clerk and his time is billed on a partial indemnity basis at $90 per hour.
[16] Mr. Campbell has claimed 77.22 hours for preparation for trial and attendance at trial. On the other hand, Ms. Iwasykiw only claimed 56.30 hours for the same work. I must say that for a four day trial, I find the hours claimed somewhat excessive for Mr. Campbell and I reduce them to 65 hours.
[17] Otherwise, I find the work done by him to be reasonable and necessary for the presentation of his client’s case. He was well prepared, as was Ms. Iwasykiw.
[18] Mr. Campbell has advised the court in response to a request made by me that the work done prior to the examinations for discovery occurring was all done prior to the Offer to Settle being served on January 30, 2017. His dockets reflect the work done, which I consider reasonable and necessary prior to examinations for discovery as follows and I allow the following amounts for the period prior to the service of the Offer to Settle:
Richard Campbell: 6.95 hours at $260 per hour = $1807.00
Kathy Witmer: (law clerk) 4.15 hours at $135 per hour = $560.25
Gregory Killingbeck: (law clerk) 6.55 hours at $90.00 per hour = $589.50
Total partial indemnity costs payable to time of Offer to Settle are $2956.75 plus HST of $384.38 for a total of $3,341.13.
Costs payable to the defendant on a substantial indemnity basis from service of the Offer to Settle:
[19] From the time of the Offer to Settle being served on January 30, 2017 to the conclusion of this trial, I allow the defendants their costs on a substantial indemnity basis calculated as follows:
Richard Campbell: 83.1 hours at $350 = $29,085.00
Gregory Killingbeck: 18.91 hours x $90 = $1701.90
Kathy Witmer: 5.7 hours x $135 = $769.50
Total Costs Assessed on a Substantial Indemnity Basis are $31,556.40.
HST on Substantial Indemnity Costs Awarded = $4,102.33
Total Costs inclusive of HST payable on a Substantial Indemnity basis are $35,658.73.
Conclusion:
[20] The defendants shall have judgment against the plaintiff for their costs and disbursements in this matter in the amount of $40,701.10 inclusive of HST.
This judgment shall bear post judgment interest at the rate prescribed under the Courts of Justice Act from the date of release of judgment in this matter on June 3, 2019.
Turnbull, J.
Date: September 6, 2019
[^1]: 2019 ONSC 3112. [^2]: Davies v. Clarington (Municipality), 2009 ONCA 722, [2009] O.J. No. 4236, 100 O.R. (3d) 66 at para. 15 (Ont. C.A.).