COURT FILE NO.: CV-15-529632

DATE: 20190621

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CHO-LAM IP and LAI-KUEN IP, Plaintiffs

AND:

OLALEKAN KARIMU OLOKUN, SASHAWA ANISHKA SMITH and TD HOME AND AUTO INSURANCE COMPANY, Defendants

BEFORE: Leiper J.

COUNSEL: J. A. Michael Wolfe, for the Plaintiffs

Rovena Hajderi for the Defendant Sashawa Anishka Smith and Akari Sano for the Defendant TD Home and Auto Insurance Company

HEARD: In Writing

COSTS ENDORSEMENT

LEIPER J.

INTRODUCTION

[1] The applicant, defendant Sashawa Smith (“Smith”) brought a motion for summary judgment on the issue of whether she had given the driver of her vehicle consent to possess the vehicle, making her vicariously liable for the driver of her vehicle in the motor vehicle accident that was the precipitating event in this litigation.

[2] Smith’s motion was brought following examinations for discovery and a failed mediation. The motion began on April 29, 2019 with argument on whether certain records summonsed by the defendant TD Home and Auto Insurance Company (“TD”) should be ordered produced. These records included a statement taken by Smith’s insurer from the driver of the subject vehicle who was not participating in the litigation. Smith resisted production of this record on the basis of litigation privilege, although a summary of its contents had previously been disclosed to TD. Ultimately, I ordered that the statement be produced, along with other records from the adjusting and underwriting files that were relevant to the issue of consent to possess the vehicle.

[3] The substance of the motion was adjourned to June 3, 2019 to provide the parties with an opportunity to resolve any outstanding document issues, to produce the records ordered and to revise the materials required for the argument on the substance of the motion.

[4] On June 3, 2019 Smith supplemented her materials with an argument that the summons served on the record holders and returnable that date should be quashed on the basis of abuse of process. TD continued to seek additional records in the adjusting file and a detailed list of any such records. I reviewed these additional materials and determined that Smith’s abuse of process motion was without merit. I heard additional submissions from TD about further records and the deficiencies in Smith’s listing of any further privilege claims. I concluded that there was no foundation to pursue further information or records from Smith’s insurer and that the material produced by Smith was sufficient for the argument on the merits of the motion. The parties completed argument on June 3, 2019.

[5] By reasons delivered on June 4, 2019, I concluded that Smith had rebutted the presumption that she had permitted the driver to drive or possess her vehicle. The plaintiffs sought and received a Sanderson order which would require the unsuccessful defendant on the motion to be responsible for the costs of the successful defendant. TD and Smith were requested to provide submissions on costs if they were unable to resolve the matter between them.

[6] On Friday, June 7, 2019, Smith made an offer to settle costs with a deadline of 12:00 noon on Monday June 10, 2019. TD said it would receive instructions on Wednesday June 12. Smith declined to provide any extension of the offer beyond 12:00 noon on Tuesday June 11. It was unclear from the correspondence filed on this point Smith would have been prejudiced by providing TD with this additional time to take instructions.

THE PARTIES’ POSITIONS ON COSTS

[7] The parties provided written costs submissions. Smith seeks costs of the action and the motion for summary judgment on a partial indemnity (60%) basis of $ 47,712.83 inclusive of disbursements and HST. This amount includes $15,481.03 for the first day of the summary judgment motion. That day involved TD successfully arguing for the production of a significant piece of evidence which featured prominently in the reasons for decision on the substance of the motion. TD submits that any costs award which is fair and reasonable will be in the range of $5,000 to $10,000 all-inclusive and address the following features of the litigation:

a. The first day of the motion which was required to address and order production of relevant material to TD, including the full statement of the driver Olokun, portions of the adjusting file and the underwriting file relevant to the issue of consent;

b. Steps taken before production of the missing records to TD because of the possibility of settlement if all material productions had been made in a timely way;

c. A reduction in Smith’s costs on the second day of the motion due to time spent by Smith on unfounded allegations of improper conduct by counsel.

[8] Smith rests her submission for partial indemnity costs on these grounds:

a. Costs follow the event and Smith was successful on the motion for summary judgment;

b. The issue was of moderate complexity;

c. TD ought to have brought a motion for production sooner rather than summonsing the record holders to Smith’s motion; and

d. TD ought to have considered Smith’s evidence on discovery that she had not given permission to Olokun, the driver, to possess her vehicle which would have saved TD the expense of the additional proceedings.

[9] The parties referred to case law, the Rules and the Courts of Justice Act in support of their positions on costs. These principles may be summarized as follows:

a. Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 which provides that “Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid”;

b. The overriding principle in awarding costs is reasonableness; in applying this principle to matters of some complexity there should be some critical examination of the parts of the proceeding: Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52; Boucher et al. v. Public Accountants Council for the Province of Ontario et al, (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at paras. 25-26; and Kaymar Rehabilitation Inc. v. Champlain Community Care Access Centre et al. 2010 ONSC 6614;

c. The court may take into account offers to settle, the date an offer was made and the terms of any offer: r. 49.13;

d. Failure to produce relevant documents when ordered to do so may lead to costs consequences in spite of success in the action: Lefebvre v. Osborne [1983] O.J. No. 2136.

[10] Rule 57.01 of the Rules of Civil Procedure also identifies factors to consider in making an award of costs. These factors include:

a. The result in the proceeding;

b. Any offers to settle or contribute;

c. The principle of indemnity, including the experience of the lawyer, rates charged and hours spent;

d. The amount an unsuccessful party could reasonable expect to pay;

e. The amount claimed and recovered in the proceeding;

f. The apportionment of liability;

g. The complexity of the proceeding;

h. The importance of the issues;

i. Whether any step in the proceeding was improper, vexatious, unnecessary or taken through negligence, mistake or excessive caution;

j. A party’s denial or refusal to admit anything that should have been admitted; and

k. Any other matter relevant to costs.

[11] Here, Smith was successful on the summary judgment motion. The time spent on the argument on June 3, 2019 was reasonable, and responsive to the nature of the issue. The issue of consent was not a complex matter. It required the application of well-defined legal principles and policy to the facts of this particular case. There was proportionality in the amount of counsel time spent by TD and Smith in preparing for and arguing the substance of the motion for summary judgment. Smith’s associates and students put in more time than did TD’s, but not substantially disproportionate to the factors, cases and research required by the issue.

[12] I have considered TD’s argument that Smith ought to have disclosed the statement of the driver sooner as this might have led to an earlier settlement. TD seeks to limit Smith’s total costs to only the argument on June 3, 2019, based on her failure to disclose this piece of evidence prior to the order of April 29, 2019. I am not able to conclude that TD would have settled the action had it received the statement earlier: it received the statement as a result of the production order well in advance of the second day of the motion, yet it resisted the motion, and cited portions of the statement in support of its position. It made no offers to settle once the additional disclosure was in hand. I would not limit Smith’s costs in the manner proposed by TD, but as discussed below, I will take into account the production issue in relation to other portions of Smith’s claim for costs. These areas are discussed next, in turn.

[13] On April 29, 2019, counsel for Smith and TD argued the issue of the production of the driver’s statement and other documents. TD was successful. The disclosure ordered was a material piece of evidence that was relied upon by both parties. The information in the statement formed a part of the decision. Smith’s position required the use of the time on April 29 to consider this preliminary issue. Accordingly, TD should receive its costs on a partial indemnity basis from Smith for the preparation and arguments made on April 29, 2019.

[14] I have also considered the abuse of process argument advanced by Smith in the materials filed for June 3, 2019. This argument was without merit and based on a faulty understanding of the discussion concerning the summonses to the record-holders. Such positions should not be taken lightly. I will reduce the costs of Smith as the successful party by 15% on June 3 to underline the fact that Smith’s position on the abuse of process issue was without merit.

[15] I have given no weight to the offer to settle costs made by Smith on June 7, 2019, given that TD was not provided with a reasonable extension of the deadline in order to take instructions, and there was no evidence of any particular prejudice to Smith in extending the deadline.

[16] Finally, in relation to the steps taken prior to the motion, if Smith had provided the statement to TD, instead of an incomplete summary this could have led to a more informed mediation. Smith held back a more complete description of the driver’s description that was directly relevant to the issue of consent. I found that it was not a matter of litigation privilege, and if there had there been privilege, Smith waived any privilege by giving a summary of the driver’s statement to TD. This meant that TD and the mediator participated in a process without full disclosure of a material document. Such conduct undermines the ability of the parties to fully assess a case or receive the full benefits of mediation. Accordingly, I will reduce Smith’s fees related to the preparation for and attendance at the mediation by 50%.

CONCLUSION

[17] After applying the considerations described above and the reductions to the partial indemnity costs sought by Smith, I order that TD pay costs in the amount of $16,687.29 inclusive of fees, disbursements and HST. This total is based on the following components with partial indemnity rates calculated at 60%:

Investigation and Preparation:

2,439.19

Pleadings:

234.93

Affidavit of Documents, Discovery:

Trial Brief:

11,332.25

Settlement/Mediation:

(reduced by 50%)

1,993.25

Summary Judgment Motion

(June 3, 2019; reduced by 15%)

7,901.88

Bill of Costs Preparation:

542.40

Disbursements :

4,400.25

Sub Total:

28,844.15

Less Set-Off of TD’s costs of

April 29, 2019 Motion:

12,156.86

TOTAL:

$16,687.29

Leiper J.

Released: June 21, 2019