COURT FILE NO.: 12-55096

DATE: 2019-04-12

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BON RATHWELL HOWLAND, by his litigation guardian MARGARET RATHWELL, AYESHA HOWLAND, MARGARET RATHWELL, and DONALD RATHWELL

Plaintiffs

– and –

The Estate of PAMELA HOWLAND, deceased, by its litigation administrator John Johnson, SYLVIO GAUTHIER, and CECILE GAUTHIER

Defendants

Laurie A. Tucker, Counsel for the plaintiffs, Bon Rathwell Howland by his litigation guardian Margaret Rathwell, Margaret Rathwell and Donald Rathwell

Jean-Marc Lefebvre, Counsel for the plaintiff, Ayesha Howland

Kerri Kamra, Counsel for the Defendants, Sylvio Gauthier and Cecile Gauthier

Harvey Klein and Darren M. Delaney, Counsel for the Defendant, The Estate of Pamela Howland

HEARD: June 11, 2018 and June 12, 2018

The text of the original Reasons for Decision was corrected on April 12, 2019 and the description of the correction is appended

AMENDED POST-JURY VERDICT REASONS FOR DECISION

JUSTICE H.J. WILLIAMS

Background

1Bon Rathwell Howland was five years old on August 3, 2010 when he was injured in a car accident that took the life of his parents. Bon sustained a brain injury and orthopaedic injuries. Bon was a back seat passenger in a car driven by his mother, Pamela Howland. Bon’s father, Rodney Howland, was in the front passenger seat.

2The family was driving south on a country road east of Ottawa. It was raining hard. Sylvio Gauthier was driving north on the same road, a few kilometres per hour over the 80 km/hr speed limit. The Howland car had bald tires. It slid into the path of Mr. Gauthier’s car. Mr. Gauthier and his wife, Cecile Gauthier, who was the owner of the Gauthier car, suffered only very minor injuries.

3In 2012, Bon, his grandparents, Margaret and Donald Rathwell, and his half-sister Ayesha Howland started an action against Pamela Howland’s estate and Sylvio and Cecile Gauthier.

4The Howland estate and the Gauthiers crossclaimed against each other.

5The Howland estate admitted liability for the accident in August 2017.

6The plaintiffs were all represented by the same lawyer when the action was started. Ayesha Howland subsequently retained her own lawyer.

7The action was tried by a jury in Ottawa. The trial began on January 22, 2018; the first evidence was called on January 23, 2018.

8The jury delivered its verdict on March 13, 2018, after 34 days of trial.

9The jury had been asked 14 questions.

10The jury found that Mr. Gauthier was not negligent.

11The jury awarded the following damages against the Howland estate:

For Bon Rathwell Howland:

(1) General damages for pain and suffering and loss of enjoyment of life: $350,000.00

(2) Loss of future earning capacity: $100,000.00

(3) Future care costs:

(a) Assessments $7,000.00

(b) Equipment $400.00

(c) Therapies $52,000.00

(d) Rehabilitation aid $75,000.00

(e) Additional driving lessons $600.00

(f) Post-secondary studies $55,000.00

(g) Vocational assistance $40,000.00 (agreed by the parties)

(h) Case Management $30,000.00

(4) Future household operations $10,000.00

(5) Family Law Act damages for the death of Rodney Howland $70,000.00

For Ayesha Howland:

(1) Family Law Act damages for the death of Rodney Howland $25,000.00¹

(2) Funeral expenses $ 2,487.06 (agreed by the parties)

12Bon’s claim for statutory accident benefits (“SABs”) had been settled for $455,000.00 in 2014. Of that amount, $50,000.00 was attributed to legal fees.

13At trial, the parties agreed that the $405,000.00 remainder of the SABs settlement would be deducted from the future care costs component of the jury award, except for any award for “post-secondary studies” and “future household operations”. The jury awarded $270,000.00 for future care costs, including $55,000.00 for post-secondary studies and $10,000.00 for future household operations. The $205,000.00 of the jury’s award that remained was then reduced to zero by the deduction of the SABs.

14After the deduction of the SABs from the amount awarded to Bon and the deduction of the statutory deductible from the amount awarded to Ayesha, Bon’s award was $585,000.00 and Ayesha’s was $8,495.39.

15Margaret and Donald Rathwell’s claims under the Family Law Act, R.S.O. 1009, c. F. 3, for the death of their daughter Pamela Howland were against the Gauthier defendants. As the jury found that Mr. Gauthier was not negligent, the Rathwells’ claims failed and they recovered nothing.

16Following the trial, the parties appeared before me and argued the following issues:

(1) Whether the jury’s $55,000.00 award for post-secondary studies should be amended;

(2) Prejudgment and postjudgment interest;

(3) Compensation for guardian of property/management fee; and

(4) Costs.

Issue #1: Should the jury’s $55,000.00 award for post-secondary studies be amended?

17This issue was raised by the Howland estate.

18The Howland estate argues that the jury’s $55,000.00 award for “post-secondary studies” must have been an administrative clerical error and that the jury must have intended to write $5,500.00 and not $55,000.00 on its verdict sheet.

19The award for post-secondary studies was to be for the difference between the cost of living on-campus and living off-campus. This is how the claim was presented to the jury and the verdict sheet described the claim as being for “post-secondary studies (differential costs for on-campus residence and meal plan)”.

20The Howland estate argued that the jury had not been asked to award Bon the cost of tuition for post-secondary education and that, even if it had, there was no evidence of what this cost would be.

21The evidence was that the difference between living on- and off-campus was $2,536.00 for the first year and $2,603.00 for subsequent years.

22The Howland estate did not take issue with the $55,000.00 award the day the jury delivered its verdict and did not appeal.

23The Howland estate relied on R. v. Burke, 2002 SCC 55, [2002] 2 S.C.R. 857, at para. 54, a case in which a jury foreperson had said or was heard to have said that the jury had found an accused “not guilty as charged” when the jury verdict had actually been “guilty.” The jurors were recalled and questioned and a “guilty” verdict was entered. In Burke, the Supreme Court of Canada held that there are some “clerical errors” or “accidental slips” that may be corrected by a judge without recalling the jury. These error or slips would be minor, however, “such as correcting dates and duties of a similar nature.”

24The Howland estate said that it was not asking me to recall the jury. It was asking me to find that the jury had made the type of administrative error that could be corrected without recalling the jury and to change the award to $5,500.00 from $55,000.00.

25The plaintiffs argue that intervention by a trial judge in these circumstances would be completely inappropriate. The plaintiffs argue that the proper recourse in the circumstances would have been for the Howland estate to appeal the verdict.

26I agree. It is certainly tempting to speculate about whether the jury intended to write $5,500.00 instead of $55,000.00 and, if it intended to write $55,000.00, about the rationale for the number. Any such speculation is pointless, however, because it is clear from Burke that the exceptional corrections to jury verdicts that may be made without recalling the jury are those that do not challenge the validity of the verdict. Changing the jury’s award to $5,500.00 from $55,000.00 would involve more than simply moving a comma and a decimal point one space to the left; it would involve reducing the jury’s verdict by $49,500.00 and would certainly challenge its validity.

27The Howland estate did not ask me to recall the jury the day it delivered its verdict and has not appealed the verdict and the requested amendment is not one that could be made without recalling the jury. The jury’s award of $55,000.00 for “post-secondary studies” will not be amended.

Issue #2: Prejudgment and postjudgment interest

Prejudgment interest

28Bon is entitled to prejudgment interest on his award for general damages for pain and suffering and loss of enjoyment of life, and both Bon and Ayesha Howland are entitled to prejudgment interest on their awards for damages under the Family Law Act.

29The parties agree that the applicable prejudgment interest rate is 1.3 per cent, the prejudgment interest rate in the third quarter of 2012, which was when the plaintiffs’ notice of action was issued. (Cobb v. Long Estate, 2017 ONCA 717, 416 D.L.R. (4th) 222; El-Khodr v. Lackie, 2017 ONCA 716, 416 D.L.R. (4th) 189)

30The parties disagree about the date from which interest should be calculated. The plaintiffs seek interest from the date of the accident, August 3, 2010. The Howland estate argues that because the plaintiffs did not serve written notice of their intention to commence their action, as required by the Insurance Act, R.S.O. 1990, c. I. 8, the start date for their prejudgment interest claim must be postponed. The Howland estate says that it did not receive written notice of the plaintiffs’ claim until the statement of claim was served. The Howland estate calculates interest from August 23, 2012, which is the date statement of claim was filed.

31Section 258.3(1)(b) of the Insurance Act requires the plaintiff in a car accident action to give the defendant notice of the plaintiff’s intention to commence an action.

Notice and disclosure before action

258.3 (1) An action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile shall not be commenced unless,

(b) the plaintiff served written notice of the intention to commence the action on the defendant within 120 days after the incident or within such longer period as a court in which the action may be commenced may authorize, on motion made before or after the expiry of the 120-day period;

32Section 258.3(8) of the Insurance Act provides that prejudgment interest does not run until after the notice under s. 258.3(1)(b) has been given:

(8) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, no prejudgment interest shall be awarded under section 128 of the Courts of Justice Act for any period of time before the plaintiff served the notice under clause (1)(b).

33Section 258.3(9) provides that an action may be started if notice under s. 258.3(1)(b) is not given, but the lack of notice is to be considered when costs are awarded.

34The Howland estate argues that s. 258.3(9) modifies s. 258.3(1) so that a plaintiff who fails to give notice may nonetheless commence an action. It argues that, in contrast, the choice of the word “shall” in s. 258.3(8), and the absence of a saving provision such as s. 258.3(9) shows a clear legislative intention that a failure to give notice limits a plaintiff’s entitlement to prejudgment interest. The Howland estate also argues that oral notice does not comply with s. 258.3(1)(b) which specifically refers to written notice.

35The plaintiffs argue that although no formal notice letter was ever sent to the Howland estate, on November 5, 2010, the plaintiffs’ lawyer, Laurie Tucker, spoke with an insurance adjuster, Margaret Crawford, who had been retained by the Howland estate’s insurer.

36The plaintiffs rely on Ms. Tucker’s dockets for November 5, 2010, which include a 12 minute entry for “[v]oicemail messages from and telephone call to M. Crawford, Quelmec”. The plaintiffs also rely on a letter dated November 5, 2010 from Ms. Crawford to Ms. Tucker, confirming their telephone conversation that day. In her letter, Ms. Crawford said that Quelmec was the independent insurance adjuster representing Pamela Rathwell’s² insurer at the time of the accident. Ms. Crawford’s letter referenced a claim number. In her letter, Ms. Crawford informed Ms. Tucker that Quelmec would be “handling the ‘tort’ side of the claim” and requested copies of records from the Children’s Hospital of Eastern Ontario and from “the Accident Benefit file” so that she could review them for her principals.

37Under s. 128(1) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, prejudgment interest is calculated from the date a plaintiff’s cause of action arises.

38The effect of s. 258.3(8) of the Insurance Act is to postpone the prejudgment interest calculation date under s. 128(1) until the plaintiff has served the notice under s. 258.3(1)(b).

39Section 130(1)(c) of the Courts of Justice Act permits the court, where it considers it just to do so, to allow interest for a period other than that provided in s. 128. Section 130(2) requires the court, in exercising its discretion under s. 130(1)(c), to consider a number of factors, including the circumstances of the case and any other relevant consideration.

40In support of its position, the Howland estate relies on Brady v. Lamb (2004), 14 C.C.L.T. (4th) 285 (Ont. S.C.), in which the defendants’ first written notice of the plaintiff’s intention to start an action was service of the statement of claim. The trial judge in Brady v. Lamb concluded that he could not rely on s. 130 of the Courts of Justice Act, which permits a court to award interest for a period other than that provided in s. 128 of the Act, to overcome the disentitlement to prejudgment under s. 258.3(8) of the Insurance Act. The trial judge awarded prejudgment interest only from the date of service of the statement of claim.

41More recently, however, in Cobb v. Long Estate, the Court of Appeal clarified that the discretion conferred on a court in s. 130(1) of the Courts of Justice Act is an “overriding discretion”. The Court of Appeal in Cobb was considering s. 258.3(8.1) of the Insurance Act, a 2015 amendment to the Act which dealt with the prejudgment interest rate for damages for non-pecuniary losses in car accident cases. In Cobb, at para. 73, the Court of Appeal held that the effect of s. 258.3(8.1) is that the applicable prejudgment interest rate for these damages is the rate in sections 127 and 128(1) of the Courts of Justice Act, “subject to the overriding discretion of the court in s. 130 of the same statute to increase or reduce the rate, to change the interest period, or to disallow interest altogether.”

42With the benefit of the guidance of the Court of Appeal, I must respectfully disagree with the approach of the trial judge in Brady v. Lamb. Just as Cobb v. Long Estate confirmed that the court’s discretion under s. 130(1) of the Courts of Justice Act to increase or reduce interest rates, change the interest period or disallow interest altogether may be exercised despite s. 258.3(8.1) of the Insurance Act, I find that the court may equally rely on its discretion under s. 130(1) of the Courts of Justice Act despite any disentitlement to prejudgment under s. 258.3(8) of the Insurance Act.

43In deciding whether to exercise my discretion under s. 130(1) of the Courts of Justice Act, I consider it to be relevant that, although the plaintiffs did not give the Howland estate notice in writing of their intention to commence a claim, it is evident that as of November 5, 2010, the Howland estate’s insurer:

• knew that the plaintiffs had retained a lawyer;

• either knew or easily could have determined that the plaintiffs’ lawyer worked in the field of personal injury;

• had already hired an adjuster to handle “the ‘tort’ side of the claim”;

• was aware of an accident benefits file; and

• had given its adjuster instructions to request and review medical records.

44The Howland estate’s insurer would have known, by November 5, 2010, that its insured and her husband had been killed in the August 3, 2010 accident. It knew that Ms. Tucker’s client was Bon and that he been injured. I find that by November 5, 2010, the Howland estate’s insurer knew or should have known of an intention to start an action on Bon’s behalf.

45Although the plaintiffs did not give the Howland estate written notice of their intention to commence an action in accordance with s. 258.3(1)(b) of the Insurance Act, I consider it just to calculate prejudgment interest from November 5, 2010, given the knowledge the Howland estate’s insurer had or should have had as of that date.

46I find that prejudgment interest is payable on the $350,000.00 in general damages awarded to Bon Rathwell Howland and the $70,000.00 in damages under the Family Law Act for the death of Rodney Howland at a rate of 1.3 per cent from November 5, 2010 to March 13, 2018, a period of 2686 days.

47I award prejudgment interest to Bon Rathwell Howland in the amount of $40,179.62.

48I find that prejudgment interest is payable on the $8,495.39 in damages under the Family Law Act awarded and special damages awarded to Ayesha Howland at the same rate and for the same period.

49I award prejudgment interest to Ayesha Howland in the amount of $812.72.

Postjudgment interest

50The plaintiffs requested postjudgment interest in accordance with s. 129(1) of the Courts of Justice Act calculated from March 14, 2018 at the applicable postjudgment interest rate which is three per cent.

51The wording of s. 129(1) suggests that money owing under an order automatically bears interest at the postjudgment rate, and does not need to be claimed.

52Accordingly, the plaintiffs shall have postjudgment interest on the jury’s award, including prejudgment interest,³ at the rate of three per cent, from March 14, 2018. The plaintiffs shall have postjudgment interest on the management fee and costs, also at the rate of three per cent, from the date of this decision. (United States of America v. Yemec, (2007), 2007 65619 (ON SCDC), 85 O.R. (3d) 751, 2007 CarswellOnt 3365, 225 O.A.C. 116 [2007] O.J. No. 2066(Div. Ct.))

Issue #3: Management fee/compensation for guardian of property

53During the trial, the parties agreed that, following the trial, they would ask me to decide the issue of a management fee that might apply to Bon’s jury award, rather than asking the jury to decide the issue. There was no agreement that such a fee would be appropriate.

The plaintiffs’ position

54Bon is asking for compensation for the guardian of his property in the amount of five per cent of the sum of:

(a) the net amount⁴ of Bon’s jury award ($585,000.00);

(b) the prejudgment interest awarded on the net amount of Bon’s jury award (I have now awarded $40,179.62); and

(c) Bon’s SABs settlement ($455,000.00).

55Five per cent of the sum of these three amounts ($1,080,179.60) is approximately $54,000.00.

56The plaintiffs argue that Bon currently requires a guardian of property because he is under the age of 18.

57The plaintiffs argue that Bon has been ordered to undergo a capacity assessment when he turns 18⁵ and if, at that time, he is determined to be incapable of managing his own property, he will continue to require a guardian of property.

58The plaintiffs also rely on s. 40(1) of the Substitute Decisions Act, 1992, S.O. 1992, c. 30, which allows a guardian of property to take compensation from the property of the person who is incapable of managing his or her affairs for the management of that property.

59The Substitute Decisions Act provides a percentage-based formula which may be used to calculate a guardian’s compensation. The case law has also identified a number of factors a court may look to when setting a guardian’s compensation, including the value of the incapable person’s property and the time required to perform the duties of guardian.

60In support of their request for five per cent of Bon’s jury award and SABs settlement, the plaintiffs rely on Cadieux v. Cloutier, 2016 ONSC 7604, 63 C.C.L.I. (5th) 79, in which, at the conclusion of a jury trial, the parties asked the trial judge to fix an appropriate management fee to be applied to both the jury’s award and the plaintiff’s pre-trial SABs settlement. The trial judge, after reviewing case law, concluded that five per cent was a “conventional award”.

61Cadieux was appealed and the appeal decision, at 2018 ONCA 903, was released while this decision was on reserve. Other than an adjustment to account for apportionment of liability, the Court of Appeal did not alter the trial judge’s assessment of the management fee.

62The plaintiffs also rely on Foniciello v. Bendall, 2016 ONSC 1119, in which a management fee of five per cent was applied to awards for general damages and for both past and future losses. The trial judge in Foniciello followed Gordon v. Greig (2007), 46 C.C.L.T. (3d) 212 (Ont. S.C.), in which the trial judge had reviewed case law with respect to management fees and had concluded that five per cent was reasonable.

63The plaintiffs also rely on the Supreme Court of Canada decision in Townsend v. Kroppmanns, 2004 SCC 10, [2004] 1 S.C.R. 315, which held that injured plaintiffs may be awarded a management fee when their ability to manage the amount they receive in a legal action is impaired because of the tortious conduct of the defendant.

The position of the Howland estate:

64The Howland estate argues that the plaintiffs’ submissions conflate two different types of compensation, a management fee of the kind discussed in Townsend, which applies only to damages for future losses, and compensation for a guardian of property under the Substitute Decisions Act.

65The Howland estate argues that neither should be awarded.

66The Howland estate argues that until Bon turns 18, his jury award will either be in the hands of the Official Guardian or in a structured annuity and that there is no evidence that he will be incapable of managing his own property after he turns 18.

67The Howland estate also argues that the contention that Bon will exhaust his award of damages due to an inability to manage his own money is speculative. The Howland estate argued both that and that the jury also concluded that Bon would have the cognitive ability to pursue post-secondary education.

68The Howland estate also argues that if the plaintiffs are entitled to a management fee, five per cent would be too much, because the evidence was that Bon would not require support of any kind after his late 20s or early 30s; unlike the plaintiffs in Cadieux and Foniciello, Bon is not expected to require support for life and his income would not need to be preserved for life.

Analysis

69I agree with the observations of the Howland estate that the purpose of the type of management fee awarded in Townsend is different from compensation for a guardian of property under the Substitute Decisions Act, which has also been described as a “management fee.”

70The management fee discussed in Townsend is intended to apply to awards of damages for future losses. The rationale for such a fee is to provide for investment advice and/or financial management assistance “to ensure that amounts related to future needs are not exhausted prematurely due to the inability of the victims to manage their affairs.” (at para. 6)

71This type of fee is not required when an award is placed in a structure. Structures ensure that lump sum awards will generate periodic payments over the period of years a plaintiff is expected to require them. No further management for this purpose is necessary. (Wilson v. Martinello (1995), 1995 303 (ON CA), 23 O.R. (3d) 417 (C.A.))

72In Gordon, to which I referred above and in which the trial judge reviewed case law with respect to management fees and had concluded that five per cent was reasonable, the management fee was applied only to the damages for future losses.

73In Foniciello, to which I also referred above, the plaintiff was awarded five per cent of his total award, which included general damages and damages for past and future losses. In a section of his decision titled “Substitute Decision s Act, 1992”, the trial judge said that he accepted that the plaintiff would never be capable of managing his own financial affairs and that someone would be required to manage the plaintiff’s monetary award. The trial judge said that he would refer to this compensation as a “management fee”. The trial judge referred to the evidence of the plaintiff’s economist that the percentage-based compensation formula in the Substitute Decisions Act would have resulted in guardian compensation, or what was being referred to as a “management fee”, of 15.58 per cent. The trial judge concluded that that was too much. He reviewed case law on attorney and guardian compensation and considered the tasks the plaintiff’s guardian would be required to perform. He accepted the analysis in Gordon and concluded that five per cent of the total award was an appropriate fee.

74When he awarded this management fee, the trial judge in Foniciello was awarding compensation for the management of an incapable person’s total award and not compensation restricted to ensuring that lump sum awards for future losses are maintained. The trial judge made no reference in his decision to Townsend. Further, in Foniciello, a structure for the judgment was being contemplated, which would have made a Townsend-type management fee unnecessary.

75In Cadieux, counsel had jointly asked the trial judge to fix what was described in the trial judge’s decision as “an appropriate management fee for the administration of the plaintiff’s assets which is the responsibility of the plaintiff’s father.” It is evident from this description that the management fee the trial judge was being asked to set was a fee for the guardian of the plaintiff’s assets, in other words, a Fonciello “management fee” and not a Townsend management fee. The trial judge awarded five per cent on the “assets under management” which included the plaintiff’s pre-trial SABs settlement and the jury award.

76The Court of Appeal in Cadieux said that the determination of whether a management fee is appropriate, and the amount of the fee, are questions of fact to be made on a case-by-case basis. It found that the trial the trial judge’s fee of five per cent was reasonable.

77As Bon is a minor, he will require a guardian of property for age-related reasons at least until he turns 18.

78The plaintiffs’ lawyers plan to seek an order appointing Margaret Rathwell as Bon’s guardian of property in respect of the jury award.

79Because they also plan to request a structure, Mrs. Rathwell may not be called upon to invest Bon’s awards for future losses to ensure that he receives the appropriate amount. However, she would be called upon to ensure that the payments Bon receives from his structure are used in his best interests. This would require communications with Bon’s health care and support providers, teachers and guidance counsellors as well as discussions and possibly negotiations with Bon. In addition to decision-making, record-keeping and banking would be necessary. Mrs. Rathwell might also require formal professional assistance.

80Depending upon the result of Bon’s capacity assessment, he might or might not require a guardian of property after age 18. The order of McNamara J. approving the settlement of Bon’s accident benefits claim requires Mrs. Rathwell to arrange for a capacity assessment for Bon in the months leading up to his 18^th birthday. The plaintiffs’ and the Howland estate’s life care planners were both of the opinion that it would be appropriate for Bon to undergo a capacity assessment at that time.

81Although the outcome of that assessment will not be known for another three years, I find, based on the evidence at trial, that there is a real and substantial possibility that Bon will be found not to be capable of managing his financial affairs.

82As the Howland estate observed, the jury, through its award, clearly conveyed its view that Bon would be capable of pursuing post-secondary education. In addition to awarding compensation relating to post-secondary education, the jury wrote a note on its verdict sheet encouraging Bon to pursue post-secondary studies “in the vocation of his choice”.

83The jury did not conclude that Bon would suffer a future loss of income of the magnitude contemplated by his lawyers. However, no inferences relevant to financial management capacity can be drawn from the jury’s conclusion in this regard; the only inference that can be drawn is that when the jury compared Bon’s income earning potential in all of the circumstances that would have existed had the accident not happened, with his income earning potential in all of the circumstances that now exist, it concluded that the difference was significantly smaller than Bon’s lawyers had suggested it would be.

84There can be no doubt that that the jury considered Bon’s injuries to be serious; it awarded Bon $350,000.00 in general damages, exceeding even the range of general damages suggested by Bon’s lawyers. Bon’s brain injury was obviously the most serious of his injuries and the injury with the greatest potential to have a negative impact on his future.

85The evidence at trial and the jury’s award suggest that Bon will continue to require various types of support until his late 20s or early 30s.

86I note that the structure in place in respect of his accident benefits settlement provides him with payments until he turns 24.

87I consider it to be significant that, as I have mentioned, the life care planners who testified at the trial shared the opinion that Bon’s capacity should be tested at age 18.

88Several witnesses at the trial gave evidence to the effect that the degree to which Bon’s brain injury will affect him in the future will not be known until his brain has fully developed, which is not expected until he is in his 20s.

89A paediatric neuropsychologist, Dr. Anderson, testified that he believed that it was more likely than not that Bon would experience issues with impulse control in the future. Dr. Anderson testified that this could affect Bon’s ability to pursue his education and how he fares in the workplace.

90The plaintiff’s expert neuropsychologist, Dr. Alyman, also described issues with impulse control when she described Bon’s future worst-case scenario and explained that poor judgment and poor decision-making could be the result.

91If Bon should experience impulse control issues, and Dr. Anderson testified that it is more likely than not that he will, this could affect his ability to act responsibly in respect of his finances, to make financial decisions that are in his best interests or to appreciate the consequences of his actions. Given this prospect and based also on the fact that Bon’s brain is not expected to be fully developed for another five or more years, I do not consider the possibility that he will be found to be incapable to be a speculative or fanciful possibility nor do I consider it to be inconsistent with the jury’s encouragement to Bon to pursue post-secondary education and the vocation of his choice.

92Having found that there is a real and substantial risk that Bon will be found incapable of managing his award after he turns 18, I must award compensation based on the likelihood that the risk will materialize and also based on whether he is likely to be incapable for the entire duration of his life.

93It is a certainty that Bon, who is now 14 years old, will require a guardian for property for the next four years, until he turns 18. Based on the evidence, I find that there is a 75 per cent chance that he will also require a guardian for six years from age 18 age to 24 and a 50 per cent chance thereafter.

94I will adopt the five per cent management fee the Court of Appeal recently found in Cadieux to be reasonable and apply it to the amount of Bon’s jury award plus prejudgment interest and the amount of his SABs settlement. As noted above, the result is $54,000.00. In a somewhat rough and ready effort to adjust this fee to reflect my assessment of the likelihood that Bon will require a guardian in the future, I will assume that Bon’s life expectancy is approximately 80 years⁶ and that, as he is now 14, 66 years remain. I will award five per cent of the $54,000.00 for the first four of the 66 years, 75 per cent of five per cent for next six years and 50 per cent of five per cent for the remaining 56 years.

95The result is approximately $30,000.00 which is the amount of the management fee I award to Bon.

Issue #4: Costs

96The issues with respect to costs include both liability for costs and quantum.

The positions of the parties

The plaintiffs (other than Ayesha Howland)

97The plaintiffs argue that their costs should be paid on a partial indemnity basis.

98The plaintiffs argue that they were successful at trial. They submit there were no offers that would trigger the cost consequences of Rule 49 in respect of their costs.

The plaintiff Ayesha Howland

99The plaintiff Ayesha Howland, who was separately represented, relied primarily on the costs submissions of the other plaintiffs. She also seeks partial indemnity costs.

The Howland estate

100The Howland estate argues that the plaintiffs are entitled to costs on a partial indemnity basis until January 19, 2018, when the Howland estate served an offer to settle. The Howland estate seeks its costs from January 20, 2018 to the end of the trial.

101The Howland estate argues that, even though its January 19, 2018 offer to settle was not Rule 49-compliant, in that it was served within the seven-day window before the trial, the offer must nonetheless be taken into consideration in the award of costs under rule 49.13 and that its terms were more favourable to the plaintiffs than the jury’s award ultimately was.

102The Howland estate acknowledges that it may be ordered to pay the costs of the Gauthier defendants under either a Bullock or a Sanderson order⁷. However, it argues that it should not be required to pay the Gauthier defendants’ costs after August 23, 2017⁸, which was the date the Howland estate admitted liability for the accident and advised that it would withdraw its crossclaim against the Gauthier defendants. The Howland estate argues that, after August 23, 2017, the plaintiffs were exclusively responsible for the Gauthier defendants’ ongoing participation in the trial.

The Gauthier defendants

103The Gauthier defendants argue that they were entirely successful at trial and that they are entitled to their costs from the plaintiffs. However, they argue that, through a Bullock or a Sanderson order, the Howland estate should pay their costs on a partial indemnity basis up to August 23, 2017, the day the Howland estate admitted liability for the accident.

104The Gauthier defendants argue that the plaintiffs should then pay the Gauthier defendants’ costs on a partial indemnity basis from August 24, 2017 to December 7, 2017.

105The Gauthier defendants argue that, because of an offer they served on the plaintiffs on December 7, 2017, the plaintiffs should pay the Gauthier defendants’ costs on a substantial indemnity basis from the date of that offer to date.

Liability for costs

Who should pay the plaintiffs’ costs?

106On October 17, 2017, the Howland estate served a Rule 49 offer for $450,000.00, inclusive of interest, to settle Bon’s claim and a total of $40,000.00, inclusive of interest, to settle both Bon’s and Ayesha’s claims under the Family Law Act relating to the death of Rodney Howland. The Howland estate also offered to pay the plaintiffs’ partial indemnity costs.

107The October 17, 2017 offer was addressed to the plaintiffs’ lawyer, Ms. Tucker. Copies were sent to the plaintiff Ayesha Howland’s lawyer, Jean-Marc Lefebvre and to the Gauthier defendants’ lawyer, Kerri Kamra.

108Although the October 17, 2017 letter setting out the terms of the offer described the offer as an “offer to contribute”, it was addressed to the plaintiffs’ lawyer, Ms. Tucker, and was worded in a manner that suggested that it was meant to be an offer to settle which would trigger the cost consequences of rule 49.10⁹ and not an offer to contribute under rule 49.12. In their submissions, counsel treated this offer as an offer to settle. I have done the same.

109There is no question that the jury’s award was more favourable to the plaintiffs than the terms of the Howland estate’s October 17, 2017 offer.

110The much more contentious issue is in respect of an offer made by the Howland estate on January 19, 2018. At that time, the Howland estate offered $750,000.00 plus $100,000.00 in costs.

111This offer stated that it was “over and above accident benefits and any offer from the co-defendants Gauthier.”

112The January 19, 2018 offer did not include an expiration date. The parties agree that it remained open throughout the trial. It was withdrawn on March 6, 2018, following the plaintiffs’ closing submissions.

113The Howland estate argues that its offer, which totaled $850,000.00 (i.e. $750,000.00 plus $100,000.00 in costs), was actually worth, in substance, at least $955,000.00 and arguably $1,155,000.00, because it specifically did not require the plaintiffs to deduct the amount of Bon’s SABs settlement of $405,000.00. The Howland estate argues that the Court of Appeal’s recent decision in Carroll v. McEwen, 2018 ONCA 902 at para. 74, is supportive of this argument.

114The plaintiffs argued that their partial indemnity costs as of the January 19, 2018 offer were approximately $168,000.00 and when that amount is added to the jury’s award, prejudgment interest and the management fee they were seeking, their result at trial was actually more favourable than the offer. However, now that I have assessed prejudgment interest and the management fee, if I accept for purposes of testing this argument only the plaintiffs’ $168,000.00 estimate of their costs and add $7,500.00 as an estimate of Mr. Lefebvre’s partial indemnity costs to the January 19, 2018 offer, the plaintiffs’ total recovery plus partial indemnity costs to the date of the offer would total $839,987.73¹⁰, about $10,000.00 less than the offer.

115The January 19, 2018 letter setting out the offer was addressed to Ms. Tucker. A copy was sent to Ms. Kamra. It was not addressed or copied to Mr. Lefebvre and the Howland estate acknowledges that it was not sent to him.

116The January 19, 2018 offer was served following what the Howland estate’s lawyers described as an “exit pre-trial conference”, a supplementary pre-trial conference held a few days before the trial was to begin in a last-ditch effort to settle the case, if possible.

117January 19, 2018 was a Friday. The parties selected their jury the following Monday, which was January 22, 2018. The first witness testified on Tuesday, January 23, 2018, four calendar days after the January 19, 2018 offer was served but considered by the Rules of Civil Procedure¹¹ to be only two days because of the rules that apply to computation of time.

118Because the January 19, 2018 offer was not served seven days before the commencement of the trial, it does not trigger the costs consequences of rule 49.10; both rule 49.03 and rule 49.10 specifically require that an offer be made at least seven days before the commencement of the hearing in order for these costs consequences to apply.

119Even if the January 19, 2018 offer had been served seven days before the commencement of the trial, the Rule 49 costs consequences would not apply because the offer did not comply with rule 49.11. Rule 49.11 requires that, where there are two or more defendants, in order to trigger the costs consequences, an offer must either propose to settle the plaintiff’s claim against all defendants or be made by all of the defendants. The January 19, 2018 offer did not comply with rule 49.11.

Rule 49.13

120The Court of Appeal for Ontario has made it clear in a number of relatively recent decisions that strict compliance with Rule 49 is not necessary for a court to consider an offer when awarding costs and that, in some situations, non-compliant offers must be considered.

121Rule 49.13 provides as follows:

Despite rules 49.03, 49.10 and 49.11, the court, in exercising its discretion with respect to costs, may take into account any offer to settle made in writing, the date the offer was made and the terms of the offer.

122Although rule 49.13 says that any offer to settle in writing “may” be considered when costs are awarded, in König v. Hobza, 2015 ONCA 885, 129 O.R. (3d) 57, at para. 35, the Court of Appeal made it clear that offers must be considered, even if they do not comply with rules 49.03, 49.10 or 49.11, if it would be unjust not to do so.

Rule 49.13 calls for a holistic approach to the determination of costs having regard to the factors including any offers to settle—regardless of whether they meet the requirements of r. 49—where appropriate to do justice between the parties. Rosenberg J.A. addressed the role of r. 49.12 in Elbakhiet at para. 33:

As this court pointed out in Lawson v. Viersen, 2012 ONCA 25, at para. 46, rule 49.13 is not concerned with technical compliance with the requirements of rule 49.10. Rather, it “calls on the judge to take a more holistic approach.” The appellants complied with the spirit of Rule 49 even if they failed for technical reasons to provide an offer that exceeded the Judgment. As held in Lawson, at para. 49, this was the type of offer that ought to have been given “considerable weight in arriving at a costs award.”

123In König a defendant’s offer was served nine calendar days before trial but fewer than seven days when days were counted in accordance with rule 3.01 of the Rules of Civil Procedure. The trial judge held that although the offer did not comply with rule 49.10, because the plaintiff had had “more than enough time” to consider the offer before the trial started, the “spirit” of Rule 49 had been complied with. The trial judge applied rule 49.10 and awarded the defendants partial indemnity costs after the date of the offer. The Court of Appeal concluded although the trial judge was not entitled to treat the offer as a valid Rule 49 offer, he was entitled to take the offer into account both under rule 49.13 and rule 57.01(1), which sets out the general principles applicable to costs awards. The Court of Appeal upheld the trial’s judge’s costs award after concluding that he had taken “the required holistic approach”.

124In Elbakhiet v. Palmer, 2014 ONCA 544, 121 O.R. (3d) 616, to which the Court of Appeal made reference in the above excerpt from König, the defendant’s offer was found to have been made at least seven days before the trial started. The offer was $145,000.00 plus interest and costs. The jury awarded the plaintiff $144,013.07 in damages. The Court of Appeal held that the defendant could not prove that its offer exceeded the judgment, because doing so would require an arbitrary allocation of interest. Consequently, the cost consequences in rule 49.10 did not apply. The Court of Appeal held that it was because the offer was made at least seven days before the hearing and “was virtually the same as the judgment” that the trial judge should have looked to rule 49.13 and given the offer “considerable weight”.

125In Lawson v. Viersen, 2012 ONCA 25, 108 O.R. (3d) 771, also referred to in the above excerpt from König, the plaintiff started two actions, each relating to a different car accident. The plaintiff claimed that both actions had contributed to her injuries. The actions were tried together. The defendants in each action made an offer to settle. The plaintiff’s award against the defendants in one of the actions was significantly lower than the offer of the defendants in that action; the plaintiff’s award against the defendant in the other action was somewhat higher than that defendant’s offer. The trial judge did not apply the cost consequences of rule 49.10 and held that the plaintiff could recover her costs from the defendants in both actions and that the defendants should not recover any costs. The Court of Appeal decided that although the rule 49.10 cost consequences did not apply because there were multiple defendants and their offers did not comply with rule 49.11, because the sum of the two defendant offers exceeded the plaintiff’s total award, the trial judge should have considered rule 49.13. The Court held that the offer of the defendants whose offer was significantly higher than the jury’s award against them (“the successful defendants”) should have been given considerable weight. It ordered the successful defendants to pay the plaintiff’s costs to the date of their offer and the other defendant to pay the successful defendants’ costs following the date of their offer.

126In Wilson v. Cranley, 2014 ONCA 844, 42 C.C.L.I. (5th) 173, at trial, the plaintiff beat the defendant’s Rule 49 offer of $61,609.56 by less than $700.00. The trial judge did not order costs in accordance with rule 49.10. The defendant appealed and argued that although the Court of Appeal in Elbakhiet had made it clear that there is no “near miss” policy,¹² the trial judge in Wilson had not mentioned rule 49.13, an omission for which the trial judge in Elbakhiet had been faulted. The Court of Appeal in Wilson upheld the trial judge’s costs decision because the trial judge had considered the $61,609.56 offer and that it was a “near miss”. The Court of Appeal held that the trial judge had taken the required “holistic approach” to costs because he had considered the circumstances surrounding the appellant’s offer, the offers the respondent had made and that the appellant had not participated in mandatory mediation under the Insurance Act.

127I am satisfied that, in the circumstances of this case, I must consider the Howland estate’s January 19, 2018 offer and, with fairness to the parties as my guidepost, must decide what influence, if any, the offer should have on the exercise of my discretion in respect of the plaintiffs’ costs.

128Two factors in particular suggest that the January 19, 2018 offer should be given considerable weight:

(1) Based on assumptions I consider to be the plaintiffs’ best case scenario in respect of their partial indemnity costs to the date of the offer (pre-offer partial indemnity costs of $168,000.00 for the plaintiffs other than Ayesha Howland and $7,500.00 for Ayesha Howland), the terms of the January 19, 2018 offer were more favourable than the plaintiffs’ outcome at trial to the tune of about $10,000.00; and

(2) Although, under rule 3.01 of the Rules of Civil Procedure, the offer was served only two and not the required seven days before the first witness was called and the trial, therefore, commenced (Elbakhiet v. Palmer, at para. 20), the offer remained open not only until the commencement of the trial, as required to trigger the costs consequences of rule 49.10, but until immediately after the plaintiffs’ closing submissions. The plaintiffs therefore had ample time to consider the offer as the trial proceeded – witnesses were examined and cross-examined and rulings were made.

129However, certain features of the January 19, 2018 offer suggest that it would be unfair to give the offer significant weight:

(1) The identity of the offerees was not clear. Although, in his submissions, the Howland estate’s lawyer said that the offer was intended to apply to all of the plaintiffs, including Ayesha Howland, the letter setting out the terms of the offer was addressed only to Ms. Tucker, the lawyer for Bon and the Rathwells. The letter was not addressed to Mr. Lefebvre, the lawyer for Ayesha Howland, nor did it indicate that a copy was being sent to him. The Howland estate conceded that it had not been served on Mr. Lefebvre. The letter made no reference to Ayesha Howland or her claim. Although the letter referred to “all claims”, it did not break down the sums being offered or specify to whose claims the sums being offered were to apply; the letter made no reference, for example to “the plaintiffs”, collectively, or to any individual plaintiff. In contrast, the January 9, 2018 $1,700,000.00 offer of Bon and the Rathwells had been in the names of these three plaintiffs only and used the phrase “the offering plaintiffs” to specifically exclude Ayesha Howland.

(2) Although the January 9, 2018 offer of Bon and the Rathwells had specifically stated that the amount of the offer was net of all applicable statutory deductibles, the Howland’s estate’s January 19, 2018 offer made no reference to the treatment of statutory deductibles.

(3) The January 19, 2018 offer was served on the afternoon of the Friday before the Monday the parties were scheduled to select a jury for what was expected to be a six-week trial.

130The amount of the Howland estate’s January 19, 2018 offer represented a remarkably accurate prediction of how a jury would see the plaintiffs’ case. I am satisfied that the offer exceeded the plaintiffs’ recovery at trial. Although the timing of the offer gave the plaintiffs only a weekend to consider it before the jury was to be selected, I am also satisfied that it was the product of a genuine effort by the Howland estate to settle the action without a trial.

131I am not, however, satisfied that the offer was capable of being accepted. There are two reasons for this: (1) The lawyer for Bon and the Rathwells, Ms. Tucker, could not have accepted the January 19, 2018 offer without first requesting and receiving clarification from the lawyer for the Howland estate about whether the offer was intended to include Ayesha Howland’s claim and whether the offer was intended to be net of statutory deductibles; and (2) assuming that one of the answers that came back was that the offer was intended to apply to Ayesha Howland, before the offer could be accepted, it would have had to have been served on Mr. Lefebvre. Ms. Tucker and Mr. Lefebvre then would have been required to agree to accept the offer and either to agree on the amount of Ayesha Howland’s share or on some mechanism for determining what Ayesha Howland’s share would be.

132It would be speculative to suggest what might have happened if Ms. Tucker and Mr. Lefebvre had been placed in this position. However, that it would have been an awkward position is evident from the fact that the January 19, 2018 offer was considerably less than the $1,700,000.00 offer Ms. Tucker had made on behalf of Bon and the Rathwells nine days earlier and that, in his closing submissions at the trial, Mr. Lefebvre requested damages for Ayesha Howland of $65,000.00 to $90,000.00. Every dollar from the offer that went to Ayesha Howland would come from a pool Ms. Tucker would have considered to be too shallow already and would be a dollar that did not go to Bon. A global settlement offer that does not allocate specific amounts to specific plaintiffs may not be a roadblock to acceptance when the injured plaintiff and the Family Law Act plaintiffs have common interests but this was not the case here.

133Malik v. Sirois, 2002 7008 (Ont. S.C.), was a car accident case involving multiple plaintiffs. The trial judge concluded that it was not clear whether an amount offered by the defendant was intended to apply only to the claim of the injured plaintiff or to all plaintiffs or whether all plaintiffs were to share the prejudgment interest that was offered. As a result, the judge awarded the defendants no costs. The defendants appealed and the Court of Appeal at 2003 29931 (ON CA), 176 O.A.C. 348 upheld the trial judge’s decision, noting “that especially in cases where there are multiple claimants, to be effective, Rule 49 offers must be crystal clear.” The Court of Appeal described this as an important underlying policy of Rule 49.

134More recently, the case law has been divided on whether a global offer made by a defendant to multiple plaintiffs can be sufficiently clear to trigger the costs consequences of rule 49.10. (Fragomeni v. Ontario Corp. 1080486 (2006), 81 O.R. (3d) 577 (S.C.); Mayer v. 1474479 Ontario Inc., 2014 ONSC 2622, 33 C.C.L.I. (5th) 150.) In Singh v. Shoppers, 2018 ONSC 6879, my colleague Gomery J. considered the opposing views and said, at para. 18, that “[w]hether a global settlement offer to multiple plaintiffs is sufficiently clear depends on its terms and the relationship between the plaintiffs.” Gomery J. concluded, at para. 21, that such an offer is appropriate “in a case involving a main plaintiff and family members with derivative FLA claims all represented by the same counsel.”

135In the case before me, of course, the plaintiffs were not all represented by the same counsel and the two lawyers, Ms. Tucker and Mr. Lefebvre, each owed a duty to their respective clients to maximize their recovery.

136I find that, in this case, the plaintiffs cannot have been expected to accept an offer that did not clearly specify the plaintiffs to whom it was being made or the amount to be allocated to a separately-represented plaintiff and which was not served on one of the plaintiffs. I find, therefore, that although the offer exceeded the jury’s award to the plaintiffs and remained open throughout the trial, it was not an offer that was capable of being accepted; acceptance by the plaintiffs would have required clarification from the Howland estate and then negotiation between the two lawyers for the plaintiffs.

137There is no doubt that the Howland estate’s offer of January 19, 2018 reflected a much more accurate assessment of how the jury would see the plaintiffs’ case than the January 9, 2018 offer of Bon and the Rathwells, which was for approximately twice the amount. However, I find that the fundamental deficiency in an offer that is not capable of acceptance cannot be cured by speculation that the plaintiffs never would have accepted it anyway because they thought their case was much better than it proved to be.

138Having considered the Howland estate’s January 19, 2018 offer with a view to taking the “holistic” approach to the determination of costs required by rule 49.13, I have concluded that it would be unfair to the plaintiffs in this case to place weight on an offer the plaintiffs could not have accepted and I place no weight on the January 19, 2018 offer.

Conclusion with respect to who should pay the plaintiffs’ costs

139As I have concluded that it would be unfair to place weight on the Howland estate’s January 19, 2018 offer, the plaintiffs shall have their costs to the end of the trial, payable by the Howland estate.

The amount of the plaintiffs’ costs

140The plaintiffs Bon and the Rathwells request fees at a partial indemnity rate in the amount of approximately $400,000.00, disbursements of approximately $195,000.00 plus HST.

141As their claim against the Gauthier defendants was unsuccessful, these plaintiffs are not asking for any fees or disbursements relating to the issue of liability.

142Ayesha Howland requests partial indemnity fees of approximately $43,000.00 plus disbursements of about $5,000.00 plus HST.

143Rule 57.01(1) of the Rules of Civil Procedure lists factors a court may consider in exercising its discretion to award costs, in addition to the result and the effect of any written offers to settle or to contribute. These factors are:

• 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;

• 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;

• the amount claimed and the amount recovered in the proceeding;

• the apportionment of liability;

• the complexity of the proceeding;

• the importance of the issues;

• the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

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

• a party’s denial of or refusal to admit anything that should have been admitted;

• 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

• any other matter relevant to the question of costs.

144In Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), the Court of Appeal said that costs “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.”

145Rule 57.01(1) was amended post-Boucher to add the first two factors on the list I have reproduced above, “the principle of indemnity, including…the rates charged and the hours spent” and “the amount of costs that an unsuccessful party could reasonably expect to pay…”

146Boucher does not say that, in awarding costs, the focus should be limited to the reasonable expectations of the losing party. Rule 57.01(1) does not suggest that either; as noted above, it lists both the principle of indemnity and the expectations of the unsuccessful party as factors a court may consider in awarding costs.

147In Hamfler v. 1682787 Ontario Inc., 2011 ONSC 3331, M. Edwards J. noted that the comments in Boucher, while typically quoted in relation to fees, are equally applicable to the determination of whether a disbursement is both properly assessable and reasonable in the amount claimed. I agree with M.L. Edwards J. and adopt his observation.

148I will briefly review the rule 57.01(1) factors I consider relevant to the exercise of my discretion in regard to the plaintiffs’ costs.

The principle of indemnity, including lawyers’ experience, hourly rates and hours spent

149The more senior of the two lawyers for Bon and the Rathwells, Ms. Tucker, was called to the bar in 2001 and was in her 18^th year of practice at the time of the trial. Ms. Tucker’s practice over the years has been focused almost exclusively on personal injury matters on behalf of plaintiffs. Ms. Tucker’s actual hourly rate over the eight year life of the file ranged from $250.00 to $420.00, which she converted to $150.00 to $252.00 on a partial indemnity basis.

150Ms. Tucker’s more junior colleague, Eliane Lachaine, began to work on the file in 2015. Ms. Lachaine charged from $300.00 to $380.00/hour, or $180.00 to $228.00 on a partial indemnity basis. Ms. Lachaine was called to the bar in 2005; her practice is similar in nature to that of Ms. Tucker.

151Ms. Tucker and Ms. Lachaine’s law clerks charged $135.00/hour or $81.00 on a partial indemnity basis.

152Ayesha Howland’s lawyer Jean-Marc Lefebvre has 46 years of experience as a lawyer. Mr. Lefebvre has a general practice based in Alexandria, Ontario, east of Ottawa. Mr. Lefebvre claims an actual hourly rate of $325.00 and a partial indemnity rate of $250.00. Mr. Lefebvre also claims a partial indemnity hourly rate of $90.00 for a junior lawyer and $45.00 for an articling student.

153I consider the hourly rates of all of the plaintiffs’ lawyers and other timekeepers to be reasonable. I note that there was no suggestion by the defendants’ lawyers that they were not.

154With respect to the hours spent, the lawyers for Bon and the Rathwells argued that this was a lengthy, complex and hard-fought action. They were retained in 2010, almost immediately following the accident. The trial did not take place until 2018. They argued that the amount of time they spent was fair and reasonable, particularly given that the complex nature of the case, which involved, in part, predicting the long-term consequences of a child’s brain injury. The lawyers for Bon and the Rathwells argued that because of the nature of Bon’s injuries, they were required to spend a great deal of time dealing with medical and rehabilitation professionals, both Bon’s treatment providers and expert witnesses. They also argued that because Bon is a child, they also spent a significant amount of time communicating with and advising Bon’s grandmother and litigation guardian, Margaret Rathwell and her husband, Bon’s grandfather, who had, of course, also lost their daughter and son-in-law in the accident.

155The total number of lawyer hours on the bill of costs of the lawyers for Bon and the Rathwells, from the beginning of their retainer, was 1,472.9, including work relating to post-trial issues such as costs submissions. From the beginning of 2017 to the end of the trial, the two lawyers who represented Bon and the Rathwells at the trial, Ms. Tucker and Ms. Lachaine, docketed 1,118.2 hours. Their bills of costs also includes relatively small amounts of time for other lawyers and a paralegal and approximately 700 hours of clerk time.

156Ms. Tucker and Ms. Lachaine were both active participants at the trial. Ms. Tucker was responsible for the opening and closing submissions; Ms. Tucker and Ms. Lachaine shared the examinations in chief and the cross-examinations of the witnesses.

157Mr. Lefebvre’s bill of costs included 60 hours of preparation time plus a counsel fee for trial attendance. Mr. Lefebvre attended 13 days of the seven-week trial. At his partial indemnity hourly rate of $250.00, his counsel fee translates into 108 hours.

The costs an unsuccessful party could reasonably expect to pay

158The Howland estate argued that it should not be required to pay for all of the hours spent by the plaintiffs’ lawyers. The Howland estate argued that pre-trial events were neither numerous nor time-consuming; examinations for discovery were completed in one day, the mediation was completed in one day and there were two half-day pre-trial conferences.

159The Howland estate argued that the dockets of the lawyers for Bon and the Rathwells reflect time spent on services the lawyers had every right to provide but the cost of which should not be recoverable from an opposing party. The Howland estate relied on a decision of Mew. J.¹³, in which the injured party was awarded $190,750.00 in damages after a seven-day jury trial. The plaintiffs requested fees of $269,371.00. The plaintiffs’ lawyers had spent 1,219 hours. Mew J. held that the plaintiffs’ case was extremely well-prepared but that the defendant should not be required to pay for all of the time spent by the plaintiffs’ lawyers and, in particular, the plaintiffs’ lawyers’ use of jury focus groups. Three lawyers had monitored the deliberations of three jury panels. Mew J. described it as “Rolls-Royce preparation” for a “family sedan of a case.” Mew J. reduced the plaintiff’s fees by $60,000.00, saying that the reduction would have been $80,000.00 if the defendant had not refused to participate in mediation. Mew J. awarded the plaintiff’s lawyer fees of $210,000.00 plus applicable taxes.

160The Howland estate also argued that it should not be expected to pay all of the costs associated with Bon’s accident benefits claim.

161The Howland estate also argued that it should not be required to pay any costs relating to three of the plaintiff expert witnesses, Ross Skirda, Marielle Desjardins and Dr. Catherine Gow, all of whom had prepared reports but who, for different reasons, did not testify at the trial. The Howland estate also argued that the $20,895.58 account of paediatric neurologist Dr. Daune MacGregor for preparation for and attendance at trial, over and above the cost of her reports, was excessive.

162The Howland estate also argued that some of the amounts the plaintiffs claimed as disbursements, such as postage and parking, should be concerned law firm overhead and that Mr. Lefebvre’s claims for travel and accommodations are not properly recoverable.

163The plaintiffs argue that not only are the amounts they claim fair and reasonable, they are in a range that should have been anticipated by the Howland estate. The lawyers for Bon and the Rathwells conceded that their docketed time exceeded that of the defendants but argued that this is to be expected, given that the plaintiffs bear the burden of proof. The plaintiffs’ lawyers also argued that they dealt with both the issues of liability and damages while, on the defendants’ side, Ms. Kamra focused primarily on the issue of liability while the Howland estate, having admitted liability, focused exclusively on damages.

164Mr. Lefebvre argued that in representing Ayesha Howland he did not duplicate the efforts of the lawyers for Bon and the Rathwells and relied heavily on their work and adopted their submissions.

165With respect to the costs associated with Bon’s SABs claim, the lawyers for Bon and the Rathwells argue that because the amount of the jury’s award was reduced by the $205,000.00 as a result of the settlement of the SABs claim, it is appropriate for the Howland estate to pay the costs of the accident benefits claim; they argue that the case law is clear that these costs are compensable in some circumstances. (Moodie v. Greenaway Estate, [1997] O.J. No. 6525 (Ont. Gen. Div.) per Morin J.; Hoang (Litigation guardian of) v. Vicentini, 2014 ONSC 5893 per D. Wilson J.) They also argued that the $50,000.00 portion of the SABs settlement that was attributed to legal fees came from their clients’ pockets and that their clients should be made whole through their claim for costs in this action.

166With respect to the costs of their experts, the plaintiffs conceded that one of Mr. Skirda’s accounts, which was in the amount of $1,417.50, should be removed from their bill of costs but that his remaining accounts are proper disbursements because, although he did not testify at the trial, his reports were the foundation for the parties’ agreement that Bon should be awarded $40,000.00 for vocational assistance. The plaintiffs argued that although Marielle Desjardins retired before the trial and they were required to retain a second life care planner, Monique Besz, Ms. Desjardins’ life care plan was nonetheless required because it was relied upon at the mediation. The plaintiffs acknowledged that I had ruled that Dr. Gow could not testify at the trial because the plaintiffs had already served reports from another neuropsychologist, to which the Howland estate’s expert neuropsychologist had responded. However, they argued that Dr. Gow had assisted them by attending the trial during the testimony of the Howland estate’s expert and probably at less expense than if their first expert neuropsychologist had done so, because Dr. Gow, unlike their first expert, is Ottawa-based. The plaintiffs did not take issue with the Howland estate’s observation about Dr. MacGregor’s trial account; they were unable to justify the amount of the account beyond saying that Dr. MacGregor is highly-skilled and experienced and Toronto-based.

167I will defer my observations and conclusions under this heading until later in these reasons.

The amount claimed and the amount recovered

168The amount claimed in the statement of claim was more than $5,000,000.00.

169The plaintiffs argued that the amount claimed was not unreasonable, in that they had started the action at a time when the long-term effects of Bon’s head injury were completely unknown and that, over time, his prognosis had become somewhat more predictable. The plaintiffs had reduced the amount claimed to about $3,000,000.00 by the time of the trial.

170The plaintiffs argued that the jury’s award with respect to loss of income in particular was much lower than the plaintiffs had anticipated but that there was evidence that could have enabled the jury to come to a different conclusion.

171The Howland estate argued that the plaintiffs went to trial because they were hoping that the jury’s award would exceed the Howland estate’s insurance limits of $1,000,000.00 and that the Gauthier defendants would be found to be at least one per cent responsible for the accident, neither of which happened.

172The Howland estate relied on the Court of Appeal’s recent decision in Carroll to argue that a trial judge may reduce costs where there is a lack of material benefit in proceeding to trial. The plaintiffs’ response to this argument was that the trial judge in Carroll had been highly critical of the conduct of the appellants and their counsel and that there is no comparison between the Carroll case and this one. I agree with the plaintiffs.

173There can be no doubt, however, that the plaintiffs’ recovery at trial fell far short of the amount claimed, even though it was not a case in which the plaintiffs received next to no recovery or one in which the jury’s award reflected disbelief about the severity of the injured plaintiff’s injury; as noted above, the jury’s award of $350,000.00 in general damages for Bon exceeded the ranges presented to them by the plaintiffs’ lawyers and by me.

The apportionment of liability

174There was no suggestion in this case that the plaintiffs were in any way responsible for the August 3, 2010 accident. As discussed above, the Howland estate admitted liability and agreed to drop its crossclaim. The jury found that the Gauthier defendants bore no responsibility for the accident.

The complexity of the proceeding

175I accept the plaintiffs’ argument that the matter was complex in that the main issue involved predicting the long-term implications of a traumatic brain injury for a boy who was five years old when he was injured and whose condition had evolved over time and was not static at the time of the trial. The case involved a significant amount of medical evidence and conflicting opinions about the injured plaintiff’s prognosis.

The importance of the issues

176The plaintiffs argued that the issues were of the utmost importance in that the case involved claims for compensation for a brain-injured child whose injury may affect him for life, who lost his parents in the accident in which he was injured and whose guardians, one of whom is in poor health, were a generation older than his parents. I accept that for the plaintiffs, the stakes were extremely high, particularly given the uncertainty about Bon’s condition in the future.

The conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding

177The plaintiffs said that while they do not allege improper conduct on the part of the Howland estate, it was a hard-fought trial in which numerous disputes arose and which lasted more than one week longer than anticipated.

178The number of times the jury was asked to leave the court room and the number of rulings I was called upon to make certainly brought home to me that it was not, at all times, a tea party of a trial. However, a number of matters were also resolved on consent, and what I witnessed were lawyers who took their role as advocates for their clients very seriously and who carried out the role, at all times, in a professional and civil manner.

179I do not find that this factor weighs in favour of or against any of the parties.

A party’s denial of or refusal to admit anything that should have been admitted

180The plaintiffs argue that an engineer retained by the Howland estate early in the process had concluded that Pamela Howland had been negligent and that the Howland estate, therefore, should have admitted liability earlier than it did.

181Given that the plaintiffs were aware of the conclusion of the Howland estate’s engineer, and given that the Howland estate admitted liability approximately five months before the second pre-trial conference and the trial, I am not convinced that the timing of the admission weighs against the Howland estate.

182The defendants argued that the plaintiffs’ claim against the Gauthier defendants was remote and speculative; the Howland estate’s lawyer said that he was particularly well-placed to make this argument because his client had admitted liability for the accident. As I will discuss in greater detail below, the plaintiffs argued that there was evidence the jury could have relied on to find that the Gauthier defendants were liable and I accept the plaintiffs’ argument.

Whether it is appropriate to award any costs or more than one set of costs where a party commenced separate proceedings for claims that should have been made in one proceeding

183One statement of claim was issued on behalf of all plaintiffs, but one of the plaintiffs, Ayesha Howland, subsequently retained her own lawyer and is now seeking her costs.

184The Howland estate argues that it should not be required to pay two sets of costs and that the fact that the plaintiffs were represented by two separate law firms was through no fault of the defendants.

185The reason for Ayesha Howland’s separate representation was never explained in court. Nonetheless, given her impecuniosity, it would be surprising to me if she had retained independent counsel if she not been required to do so. Ayesha Howland’s claim under the Family Law Act for her father’s death was not a large one. I saw no evidence that she made any offers to settle her claim. However, the Howland estate, which is now saying that it should not be required to pay her costs, did not make any offers to settle her claim that she could have accepted. As discussed above, the Howland estate’s January 19, 2018 offer did not mention her and was not served on her lawyer. The Howland estate had made a previous offer, on October 17, 2017, which did refer to her and which was copied to her lawyer. However, it offered a total amount of $40,000.00 to settle both her Family Law Act claim and that of Bon. Acceptance by Ayesha Howland of the October 17, 2017 offer would have required negotiation with Bon, who, of course, was separately represented.

186In these circumstances, and given Mr. Lefebvre’s efforts to avoid duplication of the work done by the lawyers for Bon and the Rathwells, I consider it to be fair for Ayesha Howland’s costs to be paid by the Howland estate.

Conclusion with respect to the amount of the plaintiffs’ costs

187The following conclusions inform my assessment of a fair and reasonable costs award for the plaintiffs:

• As I noted above, I find that the plaintiffs’ lawyers’ hourly rates are reasonable.

• I do not consider the hours in the bill of costs of the lawyers for Bon and the Rathwell from 2010 to 2018 to be excessive for an action that was lengthy and complex and which culminated in a seven-week jury trial. A rough comparison of the hours spent by the plaintiffs’ lawyers with those of the defendants’ lawyers guided me to this conclusion. From the date of their January 19, 2018 offer to settle to the end of the trial, the two lawyers for the Howland estate docketed just under 700 hours. From January 22, 2018 to the end of the trial, the Gauthier defendants’ lawyer, Ms. Kamra and her associate, who worked from Toronto, docketed approximately 520 hours for trial preparation and for Ms. Kamra’s attendance. I do not have a breakdown of the plaintiffs’ lawyers’ time beginning on either January 19, 2018 or January 22, 2018, but from January 1, 2018 to the end of the trial, Ms. Tucker and Ms. Lachaine docketed 959.7 hours for trial preparation and for attendance at the trial. The 959.7 hours were docketed over a period of time that was roughly three weeks longer than the period of time over which the Howland estate’s lawyers docketed their almost 700 hours and Ms. Kamra and her colleague docketed their 520 hours. Further, Ms. Tucker and Ms. Lachaine had the burden of proof at trial and called most of the witnesses. I also accept the plaintiffs’ argument that the Howland estate and the Gauthier defendants were able to divide labour to some extent, with the Howland estate dealing with the issue of damages and the Gauthier defendants focusing primarily, if not exclusively, on the issue of liability, although I also accept that Ms. Kamra needed to be prepared to deal with the damages issue in the event that the plaintiffs’ action against the Howland estate settled.

• Having said that the plaintiffs’ hours are not excessive, I will nonetheless reduce them for two reasons: (1) I have a reaction to the plaintiffs’ participation in a focus group in November, 2017 similar to that of Mew J. in Canfield and I question whether, as useful as the focus group may have been, it was a step for which an opposing party should be called upon to pay. Even if I did not have this reaction, it appears from the plaintiffs’ lawyers’ dockets that the focus group dealt with “neuropsychological and liability evidence” and, because the plaintiffs were unsuccessful on the liability issue, time spent on liability was not to have been included in the plaintiffs’ fees; (2) I find that it would be appropriate for the Howland estate to pay some but not all of the costs of Bon’s SABs action because, as a result of the settlement of the action, the Howland estate received the benefit of a $205,000.00 deduction from the jury’s award. I note that the Howland estate acknowledged in its submissions that it might be appropriate for it to contribute to these costs, but not to pay all of them. The lawyers for Bon and the Rathwells said that they devoted 63 hours to the SABs action prior to a joint mediation of the SABs action and this action, that 46 lawyer hours and 25.3 clerk hours were then spent on the mediation and 39 lawyer hours on the motion to approve the settlement. In the circumstances, I find that it would be fair for the Howland estate to pay for approximately half of the costs of the pre-mediation period and the settlement approval motion and for about 25 per cent of the mediation. As such, I will reduce the plaintiffs’ fees by an estimate of 50 per cent of the pre-mediation and approval motion hours and of 75 per cent of the mediation-related hours, at the plaintiffs’ lawyers’ 2014 and 2015 rates. I will reduce the plaintiffs’ fees by a total of $25,000.00 to account for the focus group and the reduction in the SABs-related fees.

• Mr. Lefebvre is claiming 60 hours of preparation time plus a counsel fee of $27,000.00. The counsel fee translates into an additional 108 hours when it is divided by Mr. Lefebvre’s partial indemnity hourly rate of $250.00. It was clear from Mr. Lefebvre’s submissions that his client was not paying him for his time. It was evident that Mr. Lefebvre was careful not to spend any more time working on the file or attending court than he believed was necessary to represent his client’s interests. I consider the 168 hours he spent from 2013 to the end of the trial to be reasonable.

• I find that the plaintiffs’ disbursements should be reduced by the following amounts: (a) Mr. Skirda’s account of $1,417.50; as he did not testify at the trial an account for a trial preparation meeting is not appropriate. Although he did not testify, I accept that his reports were relied upon for the agreement with respect to the $40,000.00 award for vocational assistance and I allow his other accounts; (b) Ms. Desjardins’ account of $7,026.00 for her life care plan; although I accept that this plan was used for the mediation, Ms. Besz charged a similar amount for the replacement plan she prepared and which the plaintiffs relied on at trial; (c) Dr. Gow’s account of $16,750.00 for her assessment, file review and report; Dr. Gow did not testify at trial. I find Dr. Gow’s $2,000.00 account for assisting the plaintiffs with trial evidence to be appropriate; I accept the plaintiffs’ argument that if Dr. Gow had not assisted the plaintiffs with the testimony of the defendants’ neuropsychology expert, Dr. Alyman would have done so and possibly at a higher cost as Dr. Alyman, unlike Dr. Alyman, is not based in Ottawa; (d) $10,000.00 of Dr. MacGregor’s trial attendance account to make it more consistent with the charges of the other experts who testified; and (e) Mr. Lefebvre’s travel and accommodation-related disbursements.

• I do not take issue with the plaintiffs’ minor disbursements for postage and parking, the amounts of which I consider to be reasonable and which I consider to have been reasonably necessary to advance their claim.

188I have also considered whether the plaintiffs’ costs are proportional to the importance and complexity of the issues and the amount involved in the proceeding. (Rule 1.04(1.1) of the Rules of Civil Procedure):

• With respect to Bon and the Rathwells, having found that the action was both complex and of extreme importance to these plaintiffs and given that the amount recovered for Bon was more than half a million dollars after the deduction of his SABs settlement, I find that, subject to the adjustments in the preceding paragraph, the claimed costs are proportional, even though the amount of damages claimed significantly exceeded the jury’s award.

• With respect to Ayesha Howland, Mr. Lefebvre admitted that his costs were disproportional to the amount recovered and, had he not done so, I would have found that they were. However, Mr. Lefebvre should be credited for providing access to justice to a client who could not afford it. Although civil litigation was not the focus of Mr. Lefebvre’s 46 years in practice, and I think it is fair to say that he was not entirely within his comfort zone at all times, Mr. Lefebvre went to trial on behalf of a client who could not pay his fees and who, over time, also could not pay her disbursements. The lawyers for Bon and the Rathwells also represented their clients without being paid and in making this observation about Mr. Lefebvre, it is not my intention to in any way minimize their role in providing access to justice for their clients. That said, Ayesha Howland’s claim, which was under the Family Law Act, was never going to result in a large judgment that, on a simple cost benefit analysis, would justify the lawyer hours that would be required if the case went to trial which, of course, it did.

As I noted above, the October 17, 2017 offer that was made to Ayesha Howland was not one that she could have accepted without negotiation with Bon and the January 19, 2018 offer did not refer to her and was not sent to Mr. Lefebvre. Short of abandoning her claim, Ayesha Howland had no off ramp from this litigation. As I mentioned above, there was no evidence that she made any offers either and I will take this into account in assessing her costs. I will also take into account the disproportionality of her costs and I will reduce them for that reason. I will not, however, reduce them significantly because, as I mentioned previously, Mr. Lefebvre was careful to keep his time to a minimum while still providing legal representation to a client who could not afford it and who had a legitimate but not a large claim. To place undue weight on proportionality in these circumstances would be to discourage lawyers from doing what Mr. Lefebvre did in this case.

189Having found that the Howland estate must pay the plaintiffs’ partial indemnity costs, and based on the conclusions in the preceding two paragraphs, I find that that the following assessments strike an appropriate balance between the principle of indemnity and the amount that the losing party could reasonably expect to pay:

• I fix the partial indemnity fees of Bon and the Rathwells at $375,000.00 plus HST for a total of $423,750.00;

• I fix the taxable disbursements of Bon and the Rathwells at $145,538.20 plus HST for a total of $164,458.16;

• Bon and the Rathwells shall also have their claimed non-taxable disbursements of $15,592.57;

• I fix the partial indemnity fees of Ayesha Howland at $32,250.00 plus HST for a total of $36,442.50; and

• I fix the disbursements of Ayesha Howland at $2,750.00 plus HST for a total of $3,107.50.

Who should pay the Gauthier defendants’ costs?

190The parties agree that the Gauthier defendants were successful at trial and that they are entitled to their costs.

191The Gauthier defendants argue that: (1) the Howland estate should pay their costs, on a partial indemnity basis, from the beginning of the action until August 23, 2017, when the Howland estate admitted liability for the August 3, 2010 accident and advised that it would withdraw its crossclaim against the Gauthier defendants; (2) the plaintiffs should pay their costs, on a partial indemnity basis, from August 23, 2017 until December 7, 2017, when the Gauthier defendants served an all-inclusive offer to settle for $50,000.00 which remained open until the commencement of the trial; and (3) the plaintiffs should pay their costs, on a substantial indemnity basis, after December 7, 2017.

The Gauthier defendants’ costs to August 23, 2017

192The Howland estate argued that, during the trial, on January 24, 2018, the Gauthier defendants consented to a without-costs dismissal of the Howland estate’s crossclaim and, in doing so, agreed to waive costs against the Howland estate. The Howland estate conceded that, otherwise, it might have been required, under a Bullock or a Sanderson order, to pay the Gauthier defendants’ costs before August 23, 2017, when the Howland estate admitted liability for the accident.

193The Gauthier defendants argued that the dismissal of the Howland estate’s crossclaim has no bearing on whether the Howland estate has liability to pay the Gauthier defendants’ costs because the Gauthier defendants maintained their crossclaim against the Howland estate and, in it, claimed indemnity or contribution with respect to their costs of defending the plaintiffs’ action.

194The Gauthier defendants argued that the Howland estate, as an unsuccessful defendant, should pay their costs to August 23, 2017 either directly or by way of a Bullock or a Sanderson order, which are different mechanisms but which both indemnify plaintiffs for their cost obligations to successful defendants. The Gauthier defendants noted that a crossclaim is not a precondition to a Bullock or a Sanderson order. (Moore (Litigation Guardian of) v. Wienecke, [2006] O.J. No. 2044 at para. 15.)

195The threshold question when determining whether a Bullock or a Sanderson order is appropriate is whether it was reasonable to join the several defendants together in one action. (Moore (Litigation Guardian of) v. Wienecke, 2008 ONCA 162 at para. 41) and I find that it was in this case. The plaintiffs’ losses arose from a two-car collision between the Gauthier defendants’ car and that of the late Pamela Howland. It would have been unreasonable and contrary to the rule against multiplicity of proceedings (Courts of Justice Act, s. 138) not to have joined the defendants in the same action.

196After deciding the threshold question, the court must decide whether a Bullock or a Sanderson order would be just and fair in the circumstances. In Moore (Litigation Guardian of), the Court of Appeal identified a number of factors which may be relevant to this determination. The primary consideration is whether the defendants tried to shift responsibility to the other. In this case, they did. Another consideration is whether the unsuccessful defendant caused the successful defendant to be added as a party, which was not the case here. A further consideration is whether the two causes of action were independent of each other, in which case a Bullock or Sanderson order may not be appropriate. In this case, the plaintiffs’ claims against the Gauthier defendants and the Howland estate arose from a single collision between their two cars; the plaintiffs’ claims against the Gauthier defendants and the Howland estate were not, therefore, separate or distinct. Ability to pay is another factor. Bon and the Rathwells argue that their ability to pay is limited, that the jury’s award was less than they had hoped for and that Bon is a minor whose future financial prospect are unknown. Bon’s litigation guardian, Margaret Rathwell, who will be responsible for any costs awards, works part-time at a small restaurant in Smiths Falls and had been hoping to stop working to be more available for Bon. Donald Rathwell is retired and his health is unreliable.

197I agree with the Gauthier defendants that the consent dismissal of the Howland estate’s crossclaim does not bar the Gauthier defendants’ claim for costs in their crossclaim against the Howland estate and that it does not prevent me from making a Bullock or a Sanderson order.

198Having considered the factors identified by the Court of Appeal in Moore (Litigation Guardian of), I consider a Sanderson order to be just and fair in the circumstances and I order the Howland estate to pay the Gauthier defendants’ costs up to and including August 23, 2017.

The Gauthier defendants’ costs after August 23, 2017

199As I noted above, the Gauthier defendants made an offer to settle for $50,000.00 on December 7, 2017. They argue that the plaintiffs should pay their costs on a partial indemnity basis from August 23, 2017, when the Howland estate admitted liability for the accident, to the date of their December 7, 2017 offer and then substantial indemnity costs after the date of the offer.

200For the reasons below, while I agree that the Gauthier defendants are entitled to costs from the plaintiffs after August 23, 2017, I do not agree that the post-offer costs should be on a substantial indemnity scale.

201Although for different reasons and to different effect, the plaintiffs and the Gauthier defendants agree that the December 7, 2017 offer should not trigger the costs consequences of rule 49.10. I agree with them.

202Rule 49.10 does not apply when a plaintiff’s action is dismissed, even if the defendant to the action made a Rule 49-compliant offer; “[t]he words in the rule ‘and the plaintiff recovers a judgment as favourable’ make it clear that the rule has no application where the plaintiff fails to recover any judgment.” (S & A Strasser Ltd. v. Town of Richmond Hill, (1990) 1990 6856 (ON CA), 1 O.R. (3d) 243 (C.A.))

203The Gauthier defendants rely on S & A Strasser Ltd. in support of their claim for substantial indemnity costs after the date of their December 7, 2017 offer. In S & A Strasser Ltd., the defendant had made a $30,000.00 offer to settle an action. The plaintiff had originally claimed $1,000,000.00 but reduced its claim to $70,000.00 shortly before the trial. At trial, the action was dismissed. The trial judge relied on rule 49.13 and awarded the defendant solicitor and client (now “substantial indemnity”) costs for the entire action. The Court of Appeal held that the solicitor and client costs should have been linked to the date of the offer and, based on the costs-related considerations in rule 57.01, awarded the defendant party and party (now “partial indemnity”) costs to the date of the offer and solicitor and client costs following the date of the offer.

204More recently, however, the Court of Appeal has clarified the appropriate application of S & A Strasser Ltd. In Davies v. Clarington, 2009 ONCA 722, the Court of Appeal noted that it had repeatedly said that elevated (that is to say, full or substantial indemnity as opposed to partial indemnity) costs are warranted in only two circumstances: (1) where specifically authorized through the operation of an offer to settle under rule 49.10; or (2) where the losing party has engaged in behaviour worthy of sanction.

205In Davies, the Court of Appeal said that it had attempted to clarify S & A Strasser Ltd. in Scapillati v. A. Potvin Construction Ltd. (1999), 1999 1473 (ON CA), 44 O.R. (3r) 737 (C.A.), in which it had said that the principle upon which solicitor and client costs were awarded in S & A Strasser Ltd. was “a very narrow one” and had also observed that the trial judge in S & A Strasser Ltd. had said that the circumstances of the case “scream[ed]” for solicitor and client costs. The Court of Appeal in Davies concluded that S & A Strasser Ltd. must be interpreted as a case which implicitly fell into the second category of cases in which elevated costs are warranted, cases in which the losing party engaged in behaviour that was worthy of sanction.

206The principle that substantial indemnity costs are available only in the two categories of cases identified in Davies has been affirmed by the Court of Appeal more recently in St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280 at para. 90 and AB2000 Software Corporation v. Infinium Capital Corporation, 2015 ONCA 829 at para. 41.

207S & A Strasser Ltd. does not, therefore, support the proposition that substantial indemnity costs are properly awarded to a defendant simply because the defendant made an offer to settle to a plaintiff in an action which was ultimately dismissed; in such a scenario, for substantial indemnity costs to be awarded, the plaintiff also would have had to have acted inappropriately. In this case, while the Gauthier defendants obviously fault the plaintiffs for having pursued an action against them which ultimately proved to be unsuccessful, there was no suggestion and no evidence to suggest that the plaintiffs’ behaviour was in any way deserving of sanction.

208The Gauthier defendants are not entitled to substantial indemnity costs after December 7, 2017 but shall have their costs after August 23, 2017 on a partial indemnity basis.

209The plaintiffs requested a Bullock or a Sanderson order that would require the Howland estate to pay the Gauthier defendants’ costs that would otherwise be payable by the plaintiffs. I agree with the submission of the Howland estate that such an order would be extremely unfair to the Howland estate because of its August 23, 2017 admission of liability and agreement to withdraw its crossclaim. I agree with the Howland estate that after August 23, 2017, the plaintiffs were exclusively responsible for the Gauthier defendants’ ongoing involvement in the action.

210The plaintiffs, therefore, shall pay the Gauthier defendants’ partial indemnity costs after August 23, 2017.

211As Bon recovered $585,000.00 and Ayesha Howland recovered $8,495.39, Bon’s litigation guardian shall pay 98.57 per cent of these costs and Ayesha Howland shall pay 1.43 per cent.

The amount of the Gauthier defendants’ costs

212The Gauthier defendants are asking that their partial indemnity costs to August 23, 2017 be fixed at $32,251.53, comprised of fees of $23,723.70, HST of $3,084.08 and disbursements of $5,443.75, inclusive of HST.

213The Gauthier defendants are asking that their partial indemnity costs after August 23, 2017 and to December 7, 2017 be fixed at $64,355.28, comprised of fees of $8,512.20, HST of $1,106.59 and disbursements of $54,736.49, inclusive of HST.

214The Gauthier defendants calculated their partial indemnity costs after December 7, 2017 to be $222,754.19, comprised of fees of $111,227.40, HST of $14,459.56 and disbursements of $97,057.23, inclusive of HST.

215I consider the following factors in rule 57.01 to be relevant to the Gauthier defendants’ claim for costs:

The principle of indemnity, including lawyers’ experience, hourly rates and hours spent

216At the time of the trial, the Gauthier defendants’ lawyer, Ms. Kamra, had been practising law for 27 years. I consider her actual hourly rate of $290.00 and her partial indemnity rate of $174.00 to be more than reasonable for a lawyer with her experience and skill.

217Ms. Kamra described her bill as “very lean” which she said probably reflected the fact that her client was an insurer. Ms. Kamra did not have co-counsel with her at the trial; an associate and a law clerk assisted her from her law firm’s office in Toronto.

218Ms. Kamra noted that in all phases of the litigation, her docketed time was considerably less than that of the plaintiffs’ lawyers. Ms. Kamra argued that she was efficient at trial and used as an example that her case on liability was presented in 1.5 days.

The costs an unsuccessful party could reasonably expect to pay

219With respect to fees, the plaintiffs argued that any costs they are required to pay the Gauthier defendants should be limited to preparation and trial attendance related to the issue of liability. The plaintiffs argued that the Gauthier defendants and the Howland estate had divided the defence of the plaintiffs’ case, with the Gauthier defendants dealing with liability and the Howland estate with damages. The plaintiffs argued that only about 18 per cent of the trial was devoted to the liability issue.

220I do not accept the plaintiffs’ argument. Although Ms. Kamra deferred to the Howland estate’s lawyers on the issue of damages at the trial, I accept Ms. Kamra’s submission that this was a strategic decision and that she was nonetheless required to be prepared to step in and deal with the damages issue if necessary. An offer to settle made to the Howland estate by the plaintiffs a week into the trial which, if accepted, would have left Ms. Kamra defending the case alone illustrated why Ms. Kamra had to be prepared at all times to deal with both the issues of liability and damages. It would not have been reasonable to expect Ms. Kamra to attend the trial only when the issue of liability was to be dealt with. To the extent that Ms. Kamra was able to defer to the Howland estate on the issue of damages, the plaintiffs benefit because Ms. Kamra‘s claimed time and disbursements are less than they otherwise would have been.

221Ms. Kamra conceded that some of the time she docketed relating to the retainer of Dr. Stewart, a neurologist whom she did not call as a witness, would properly be deducted from her account. A review of Ms. Kamra’s dockets suggests that about $1,200.00 of time was devoted to communications with Dr. Stewart, roughly half of it before August 23, 2017 and half after that date.

222Ms. Kamra also conceded that the $17,740.09 in disbursements relating to Dr. Stewart was not recoverable as he was not called as a witness.

223The plaintiffs’ counsel took issue with Ms. Kamra’s travel time from Toronto to Ottawa, which Ms. Kamra said amounted to $8,526.00 on a partial indemnity basis and to Ms. Kamra’s travel and hotel expenses, which Ms. Kamra said amounted to approximately $13,000.00.

224I agree with the plaintiffs’ counsel’s submission that there are qualified insurance defence lawyers based in Ottawa and that while the Gauthier defendants’ insurer had the right to retain its counsel of choice, the opposing parties in an Ottawa action should not be called upon to pay travel-related costs if that counsel of choice does not reside in Ottawa.

225The plaintiffs’ most emphatic objection to the Gauthier defendants’ disbursements related to the amount charged by the Gauthier defendants’ liability expert, engineer Joseph McCarthy. Mr. McCarthy’s accounts totalled $106,221.17.

226In contrast, the plaintiffs’ two liability experts, engineers Peter Williamson and Sam Maach, who dealt with the same issues as Mr. McCarthy, charged a combined total of $42,634.68.

227Ms. Kamra conceded that Mr. McCarthy’s bills were much higher than those of the plaintiffs’ experts but argued that his time was justifiable. Ms. Kamra argued that Mr. McCarthy devoted a great deal of thought and work in this case, that he had to respond to six reports from Mr. Williamson and two from Mr. Maach and that he also attended court for the liability-related evidence and spent time educating Ms. Kamra.

228In Kirby v. Andany, 2017 ONSC 301, M. Edwards J. said that several factors should be taken into account before an expert’s fee is reduced, including whether the fee was disproportionate to the economic value of the issue at risk and whether the evidence was duplicated by another expert. He concluded that the fundamental question is whether the amount is fair and reasonable and he said that reasonableness and fairness dictate whether a disbursement is recoverable, not simply whether or not an expert has rendered an account that he or she considers appropriate, which the expert can then expect to have paid. I agree with and adopt M. Edwards’s J.’s comments.

229Mr. McCarthy’s evidence was not duplicated by other witnesses.

230Ms. Kamra’s submission that the plaintiffs’ claim against the Gauthier defendants was “remote and speculative” casts some doubt on whether Mr. McCarthy’s fee was proportionate to the cost of the risk. That said, as the plaintiffs argued in support of their decision to proceed to trial with their claim against the Gauthier defendants, there was some evidence that could have supported a finding of liability against the Gauthier defendants: it was raining; the Gauthiers’ car was exceeding the speed limit slightly; its tires may have been worn; there was expert evidence about what the outcome could have been if the Gauthier car had been travelling more slowly. Additionally, the Gauthier defendants were entitled to an effective defence against a multi-million dollar allegation that they shared responsibility for an accident in which two people were killed and a child was injured.

231Mr. McCarthy has impressive credentials. He also struck me as a knowledgeable, thorough and methodical witness. He was adept at explaining difficult concepts through the use of the evidence at trial and illustrations. I accept that Mr. McCarthy legitimately devoted many hours to his retainer, which included formulating and reporting on his opinions, responding to the opinions of Mr. Williamson and Mr. Maach, attending court to observe the testimony relevant to the liability issue and assisting Ms. Kamra.

232As I noted above, Mr. McCarthy’s opinions covered both the issues of accident reconstruction and impact biomechanics, areas covered separately by Mr. Williamson, who is also an experienced accident reconstruction expert, and Mr. Maach. Mr. McCarthy’s accounts did not reflect the economy of scale that might be expected when the same expert considers two issues arising from the same event, in comparison to two single-issue experts, such as Mr. Williamson and Mr. Maach, who must each analyze the event from the ground up.

233I accept the plaintiffs’ submission that accounts of approximately 2.5 times the amount of the combined accounts of the two plaintiffs’ liability experts were not in the reasonable contemplation of the plaintiffs.

234I find that, in the circumstances, it would be fair and reasonable to order the plaintiffs to pay $50,000.00 toward Mr. McCarthy’s accounts.

A party’s denial of or refusal to admit anything that should have been admitted

235As I noted above, Ms. Kamra argued that the claim against the Gauthier defendants was remote and speculative and should not have been pursued, while acknowledging that the claim nonetheless caused concern for the Gauthier defendants, in part because of the unpredictable nature of a jury’s verdict.

236As I also noted above, the plaintiffs argued that there was evidence upon which a jury could have found liability against the Gauthier defendants:

237Hindsight being as perceptive as it is, it is easy to say, after a jury has found a defendant not to be liable, that the plaintiffs never should have advanced a claim against the defendant, because the jury would never have found the defendant to be liable. I find that, before the jury delivered its verdict on March 13, 2018, it was not a foregone conclusion that the Gauthier defendants would not ultimately share liability for the plaintiffs’ losses.

Conclusion with respect to the Gauthier defendants’ costs

238I consider the hourly rates and the time spent by the lawyers and clerks who represented the Gauthier defendants to be fair and reasonable and proportional to the issues at stake. The rates and particularly the hours spent were considerably lower than those of the plaintiffs, which I also found to be reasonable, although the comparison is not entirely fair, given the plaintiffs’ burden of proof and that the Gauthier defendants and the Howland estate were able to divide labour to a certain extent.

239Ms. Kamra made appropriate concessions in response to the plaintiffs’ observations about some of the disbursements on her bill of costs; those disbursements will be deducted. Mr. McCarthy’s fees will be reduced.

240For the period before August 24, 2017, I will reduce the Gauthier defendants’ fees slightly to account for time spent communicating with Dr. Stewart and award partial indemnity fees of $23,000.00, HST of $2,990.00 and disbursements of $5,443.75 for a total of $31,433.75. This amount shall be paid by the Howland estate.

241For the period after August 24, 2017, I will again reduce the Gauthier defendants’ fees slightly to account for time spent communicating with Dr. Stewart. I will also deduct Ms. Kamra’s travel time. The requested partial indemnity fees of $119,739.6 will be reduced to $110,600.00. The requested disbursements of $151,793.72 will be reduced by Dr. Stewart’s account of $17,740.09, by $56,221.17, which is the amount by which I reduced Mr. McCarthy’s account and by Ms. Kamra’s travel and accommodation expenses of $13,000.00. The balance is $64, 832.46.

242The plaintiffs shall pay the Gauthier defendants’ fees of $110,600.00, HST of $14,378.00 and disbursements of $64,832.46, inclusive of HST. As set out above, Bon’s litigation guardian Margaret Rathwell shall pay 98.57 per cent and Ayesha Howland shall pay 1.43 per cent.

Next steps

243I have not addressed the parties’ submissions with respect to the priority of payment of costs or the Gauthier defendants’ submissions with respect to the plaintiffs’ litigation insurance and the appropriateness of an order for payment of the Gauthier defendants’ costs against the plaintiffs and the Howland estate on a joint and several basis. If counsel are of the view that these issues need to be addressed, they may inform me accordingly through the Ottawa trial coordinator.

244The lawyers for Bon and the Rathwells have indicated that they intend to request a structure and that they will require an order appointing a guardian for property for Bon and approval of their account.

245Counsel may arrange a conference call with me through the Ottawa trial coordinator to discuss the next steps to be taken to conclude this matter.

Justice H. J. Williams

Released: April 12, 2019

COURT FILE NO.: 12-55096

DATE: 2019-04-12

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BON RATHWELL HOWLAND, by his litigation guardian MARGARET RATHWELL, AYESHA HOWLAND, MARGARET RATHWELL, and DONALD RATHWELL

Plaintiffs

• And –

The Estate of PAMELA HOWLAND, deceased, by its litigation administrator John Johnson, SYLVIO GAUTHIER, and CECILE GAUTHIER

Defendants

AMENDED REASONS FOR DECISION

Madam Justice H.J. Williams

Released: April 12, 2019

APPENDIX

139As I have concluded that it would be unfair to place weight on the Howland estate’s January 19, 2018 offer, Margaret Rathwell, in her capacity as litigation guardian for Bon Rathwell, shall have her costs to the end of the trial, payable by the Howland estate.

Paragraph 189 of my reasons should read:

189Having found that the Howland estate must pay the partial indemnity costs of Margaret Rathwell, in her capacity as litigation guardian for Bon Rathwell, and based on the conclusions in the preceding two paragraphs, I find that that the following assessments strike an appropriate balance between the principle of indemnity and the amount that the losing party could reasonably expect to pay:

• I fix the partial indemnity fees of Margaret Rathwell, in her capacity as litigation guardian for Bon Rathwell at $375,000.00 plus HST for a total of $423,750.00;

• I fix the taxable disbursements of Margaret Rathwell, in her capacity as litigation guardian for Bon Rathwell at $145,538.20 plus HST for a total of $164,458.16;

• Margaret Rathwell, in her capacity as litigation guardian for Bon Rathwell shall also have her claimed non-taxable disbursements of $15,592.57;

• I fix the partial indemnity fees of Ayesha Howland at $32,250.00 plus HST for a total of $36,442.50; and

• I fix the disbursements of Ayesha Howland at $2,750.00 plus HST for a total of $3,107.50.

Footnotes

1. 1The $25,000.00 is subject to a deductible of $18,991.67 leaving a remainder of $6,008.33.
2. 2Pamela Howland, the daughter of the plaintiffs Margaret and Donald Rathwell, had been known as Pamela Rathwell before her marriage to Rodney Howland.
3. 3If necessary, I exercise my discretion under s. 130 of the Courts of Justice Act to award postjudgment interest on the prejudgment interest as of March 14, 2018.
4. 4By “net amount” I am referring to the $585,000.00 amount that remained after the $205,000.00 attributable to future care costs was deducted.
5. 5Order of McNamara J. dated April 23, 2015 approving Bon’s SAB settlement, at para. 4.
6. 6Statistics Canada data, referred to by the plaintiffs’ expert economist Dr. Eli Katz of J.K. Economics.
7. 7A Bullock order requires an unsuccessful defendant to reimburse a plaintiff for a successful defendant’s costs; a Sanderson order requires an unsuccessful defendant to pay a successful defendant’s costs directly.
8. 8The Howland estate’s letter to this effect was dated August 23, 2017 but appears not to have been faxed to the plaintiffs’ lawyers until August 24, 2017. The Howland estate and the Gauthier defendants referred to the August 23, 2017 date in their submissions and the plaintiffs to August 24, 2017. In these reasons, when setting out the parties’ positions, I use the date used by the party. I consider the admission to have been effective August 24, 2017 but not a great deal turns on this.
9. 9If a plaintiff serves an offer to settle at least seven days before the commencement of the hearing, and the offer remains open for acceptance until the commencement of the hearing, if the offer is not accepted, and the plaintiff obtains a judgment that is as favourable as or more favourable than the terms of the offer, the plaintiff is entitled to partial indemnity costs to the date of the offer and substantial indemnity costs after the date of the offer. In the case of an offer served by a defendant, if the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer, the plaintiff is entitled to partial indemnity costs to the date of the offer and the defendant is entitled to partial indemnity costs after the date of the offer.
10. 10$585,000.00 + $8,495.39 + $30,000.00 + $40,179.62 + $812.72 + $168,000.00 + $7,500.00 = $839,987.73.
11. 11Rule 3.01(1)(b) provides that where a period of seven days or less is prescribed, holidays, which include Saturdays and Sundays, do not count.
12. 12In other words, if an offer comes close to meeting the judgment but doesn’t, the offeror is not entitled to an award of costs as though its offer had met the judgment; a “near miss” does not trigger the cost consequences of rule 49.10.
13. 13Canfield v. Brockville Ontario Speedway, 2018 ONSC 3288