Court File and Parties

COURT FILE NO.: CV-13-482046 DATE: 2020/03/18 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: DIMOSTENIS karpouzis Plaintiff

• and - CITY OF TORONTO Defendant

Counsel: William C. Wolfe for the Plaintiff Gaynor J. Roger for the Defendant

HEARD: In writing

PERELL, J.

REASONS FOR DECISION - COSTS

[1] The Plaintiff, Diomostenis Karpouzis, sued the Defendant City of Toronto for occupier’s liability and public nuisance with respect to a skateboarding accident that occurred in a City park on a recreational trail. He was seriously injured. He claimed $2.5 million in damages. The City successfully moved for a summary judgment dismissing Mr. Karpouzis’ action. [^1]

[2] The City seeks costs on a substantial indemnity basis of $75,000, all inclusive. The claim for costs is based on a discount of a Bill of Costs for $96,466.53. The claim for costs is for all steps in the action including the preparation of the costs submissions. The Bill of Costs is based on the City’s lawyer’s actual hourly rates, which it submits are significantly lower than standard rates used in the profession. These rates are part of the retainer agreement between the City and its external counsel. The hourly rates are significantly less than the rates set out in the former Costs Grid.

[3] In making its claim for substantial indemnity costs, the City notes that Mr. Karpouzis has adverse costs insurance of $100,000 pursuant to a costs insurance policy that he purchased in 2017.

[4] Mr. Karpouzis’ action made very slow progress:

a. The accident occurred during the night of June 8-9, 2011. b. On June 5, 2013, Mr. Karpouzis commenced his action. c. On January 20, 2014, the City delivered its Statement of Defence. d. On January 24, 2014, the City served an Offer to Settle on a without costs basis, which if not accepted within 10 days contemplated payment of costs to the City on a partial indemnity basis if accepted thereafter. e. On April 19, 2016, Jorge Ture, the City’s representative, was examined for discovery. f. On June 3, 2016, Mr. Karpouzis was examined for discovery. g. On November 27, 2017, the City delivered a Request to Admit. h. On December 18, 2017, Mr. Karpouzis delivered an Answer to the Request to Admit. i. In February 2018, Mr. Karpouzis brought a motion to amend his Statement of Claim to plead public nuisance. His motion was granted without prejudice to the City’s right to plead that the public nuisance claim was statue barred under the Limitations Act, 2002. j. On July 24, 2018, Mr. Karpouzis delivered his Amended Statement of Claim. k. On July 25, 2018, there was an unsuccessful mediation session. l. On August 16, 2018, the City delivered an Amended Statement of Defence and a second Offer to Settle for a dismissal of the action on a without costs basis, which was open for acceptance until five minutes following the commencement of the trial of the action. i. By this time, the City had incurred legal expenses of $30,744.50 plus HST and disbursements on a full indemnity basis. m. On April 6, 2019, Janice Wornak conducted a site investigation for Mr. Liske of Liske Accident & Injury Experts. n. On April 7, 2019, Ms. Wornak conducted another site investigation. o. On January 11, 2019, Justice Archibald fixed a timetable for the City’s summary judgment motion. p. The City complied with the timetable and delivered its Motion Record by April 1, 2019. q. Mr. Karpouzis was late in delivering his responding motion material which was delivered in late May 2019. r. On May 15, 2019, Mr. Karpouzis delivered a Preliminary Assessment Report signed by Mr. Liske. Relying on this report, Mr. Karpouzis sought an adjournment of the summary judgment motion in order that a second site inspection be conducted on the anniversary of the accident in order to study the illumination of the trail in conditions resembling those at the time of accident in 2011. s. The summary judgment motion came on for a hearing on May 28, 2019 and Mr. Karpouzis requested an adjournment. t. The City prepared materials to oppose the adjournment request, but the adjournment was granted with the summary judgment motion rescheduled and made returnable on July 30, 2019. u. On June 9, 2019, Ms. Wornak conducted another site investigation and reported to Mr. Liske the results of her investigation. v. On June 28, 2019, Mr. Karpouzis delivered an expert report signed by Mr. Liske and his associate Tyler Weaver accompanied by Mr. Liske’s affidavit. Mr w. On July 8, 2019, Mr. Liske swore his affidavit for the summary judgment motion. He relied on the investigations conducted by Ms. Wornak. x. On July 30, 2019, the summary judgment motion was adjourned for a cross-examination of Mr. Liske. The summary judgment motion was again rescheduled and adjourned to December 16, 2019. y. On August 15, 2019, Mr. Liske attended at the trail for his first personal investigation. z. On September 25, 2019, Mr. Liske was cross-examined. aa. The summary judgment motion was argued on December 16, 2019. i. Between the time of the second Offer to Settle and the completion of the summary judgment motion, the City incurred $46,198.50 in legal fees plus HST and disbursements. bb. The Reasons for Decision were released on January 8, 2020.

[5] The City’s claim for costs can be broken down as follows:

a. The City’s counsel spent 120 hours defending the action from its commencement of the action to the completion of the mediation for which the City claims $30,744.50 plus HST. b. After the second Offer to Settle, the City’s counsel spent 91.4 hours dealing with Mr. Karpouzis’s amendment of his claim and on the summary judgment motion up to the first return date of the motion for which the City claims $22,017.50 plus HST. c. The City’s counsel spent 6.8 hours reviewing Mr. Karpouzis’ expert’s report, for the court attendance on July 30, 2019 for which it claims $2,414 plus HST. d. The City’s counsel spent 84.2 hours: preparing for and cross-examining Mr. Liske; revising the motion materials; and preparing for and arguing the summary judgment motion for which the City claims $21,767 plus HST.

[6] The City’s claim for substantial indemnity costs largely rests on the circumstances that: (a) Mr. Karpouzis did not accept the City’s Offers to Settle and he lost the motion; and, (b) it is submitted that Mr. Karpouzis’ conduct unduly lengthened and complicated the motion and the proceedings causing interruptions of the timetable and causing the City to incur additional legal fees preparing materials that were ultimately unnecessary.

[7] The City relies on rule 49.13 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 [^2], which states:

49.13 Despite rules 49.03, 49.10 and 49.10, 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.

[8] In my opinion for the Reasons that follow, the City should be awarded costs in the normal course on a partial indemnity basis for an award of $55,000, all inclusive. These costs are for the summary judgment motion and for the defence of the action.

[9] Subject to the costs consequences provisions of the Offer to Settle rule, only in exceptional cases are costs awarded on a substantial indemnity scale [^3] or on a full indemnity scale. [^4] Costs on a substantial indemnity scale or full indemnity scale are reserved for rare and exceptional cases, where the conduct of the party against whom costs is ordered is reprehensible or where there are other special circumstances that justify costs on the higher scale. [^5] Unless substantial or full indemnity costs are warranted, it is an error in principle to award costs said to be on a partial indemnity basis that are virtually the same as an award on a substantial or full indemnity basis. [^6]

[10] The appropriate scale of costs in the immediate case is the normal partial indemnity scale.

[11] While, it is true that Mr. Karpouzis’ prosecution of his claim delayed the progress of the action and caused the City to repeatedly repeat its work for the summary judgment motion and to incur additional legal expenses, the City will be indemnified for these legal expenses on a partial indemnity basis and there is no reason to make a punitive costs award.

[12] In fixing the scale of costs, I have taken into account the City’s Offers to Settle. However, these offers were essentially just strategic bullying Offers to Settle to coerce a settlement and not genuine offers to settle what was a serious personal injury claim. The City’s first offer to settle came shortly after its Statement of Defence and two years before there were examinations for discovery. Mr. Karpouzis’ should not be punished for refusing to accept such an Offer and much the same thing can be said with respect to the City’s second Offer to Settle.

[13] It should be kept in mind that the award of costs belongs to the party and that a partial indemnity award is not a substantial or full indemnity. Costs as between the parties indemnifies the successful party just for a part of the legal expenses he or she actually incurred and the indemnity is only with respect to costs that are between the parties. In other words, there is a difference between costs as between a lawyer and his or her client and costs between the parties. The City’s counsel may be entitled to charge the City almost a $100,000 in the immediate case to remove the City’s exposure to a $2.5 million claim, but the City is only entitled to a partial indemnity from Mr. Karpouzis.

[14] In the immediate case, it appears that the City’s lawyer’s actual charges are below comparable rates in the legal marketplace because of the nature of its retainer agreement with the City. That is a matter as between the City and its lawyers; it is not a reason to ignore that a partial indemnity is not a substantial or full indemnity.

[15] Having reviewed the City’s Bill of Costs and exercising the court’s normal discretion with respect to costs on a partial indemnity basis, in my opinion the appropriate award in the immediate case is $55,000, all inclusive of fees, HST, and disbursements.

[16] Order accordingly.

[17] In the circumstances of the Covid-19 emergency, these Reasons for Decision are deemed to be an Order of the court that is operative and enforceable without any need for a signed or entered, formal, typed order.

[18] The parties may submit formal orders for signing and entry once the court re-opens; however, these Reasons for Decision are an effective and binding Order from the time of release.

Perell, J. Released: March 18, 2020

Footnotes

[^1]: Karpouzis v. Toronto (City of), 2020 ONSC 143. [^2]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194. [^3]: United States of America v. Yemec; Foulis v. Robinson. [^4]: Davies v. Clarington (Municipality), 2009 ONCA 722. [^5]: Whitfield v. Whitfield, 2016 ONCA 720 at para. 23; St. Elizabeth Home Society v. Hamilton (City), 2010 ONCA 280, supp. reasons 2010 ONCA 479; Davies v. Clarington (Municipality), 2009 ONCA 722; McBride Metal Fabricating Corp. v. H & W Sales Co. at para. 38. [^6]: Whitfield v. Whitfield, 2016 ONCA 720 at para. 23 (C.A.).