Court File and Parties
COURT FILE NO.: 13-42743 DATE: 2020-05-14 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Wesley Hummel et al., Plaintiffs AND: Philip Jantzi and David Jantzi, Defendants AND: 1340305 Ontario Limited c.o.b. as All Star Tap & Grill, Defendant
BEFORE: Mr. Justice G.E. Taylor
COUNSEL: David Smye, Q.C. and James Cavanagh, Counsel for the Plaintiffs Robert Rogers and Emily Hill, Counsel for the Defendants Philip Jantzi and David Jantzi Daniel Reisler, Counsel for the Defendant, All Star Tap & Grill
HEARD: May 12, 2020
Endorsement re apportionment of costs
Background
1On June 7, 2012, Wesley Hummel was seriously injured in a single car motor vehicle accident. Philip Jantzi was the driver of the motor vehicle owned by his father. His ability to operate the motor vehicle was impaired by alcohol. He had consumed that alcohol at the All Star Tap & Grill.
2On June 13, 2019, after a 39-day trial I released Reasons for Judgment in which I found:
a) Philip Jantzi to be negligent in the operation of the motor vehicle in which Wesley Hummel was a passenger;
b) The All Star Tap & Grill to be negligent for over serving alcohol to Wesley Hummel and Philip Jantzi;
c) Philip Jantzi to be 80% at fault and the All Star Tap & Grill to be 20% at fault;
d) Wesley Hummel to be 25% contributorily negligent; and
e) Wesley Hummel and members of his family to be entitled to damages of approximately $12 million.
3The quantum of the plaintiffs’ costs has been settled. What remains to be decided is the apportionment of those costs as between the defendants.
Offers to Settle
4The Jantzi defendants made an offer in July 2016 to contribute $1 million to the plaintiffs’ damages. The offer required the plaintiffs to waive their claims for punitive, aggravated and/or exemplary damages and that the plaintiffs execute a release in a form satisfactory to the Jantzi defendants “when this Action is resolved in its’ entirety”.
5The plaintiffs responded to this offer by agreeing to accept an advance payment of $1 million towards settlement of their claims in exchange for a waiver of their claims for punitive and aggravated/exemplary damages against the Jantzi defendants. The response also provided that the plaintiffs were not foregoing any claim against the Jantzi defendants in excess of $1 million. Finally, the plaintiffs’ response stated that no release would be executed until “the action is resolved against all defendants”.
6In October 2016, the Jantzi defendants made an advance payment to the plaintiffs in the amount of $1 million.
7The plaintiffs made an offer to both defendants in September 2018 to accept $2.8 million in settlement of all claims including the OHIP subrogated interest. The offer included the $1 million already paid by the Jantzi defendants. This offer was not accepted.
8The All Star Tap & Grill made an offer in September 2018 to contribute $500,000 in full satisfaction of all claims of the plaintiffs plus 15% of the plaintiffs’ partial indemnity costs. This offer was not accepted.
The Trial
9As stated previously, the trial spanned 39 days. According to my notes the plaintiffs called 33 witnesses, the Jantzi defendants called three witnesses and the All Star Tap & Grill called six witnesses. In my Reasons for Judgment I identified the issues to be decided as:
a) Liability for the motor vehicle accident;
b) Liability of the All Star;
c) Contributory negligence on the part of Wesley;
d) Damages sustained by Wesley;
e) Damages sustained by the other plaintiffs.
10There were no admissions made by either the Jantzi defendants or the All Star Tap & Grill.
Positions of the Parties
11It is the position of the Jantzi defendants that this case should have been settled by the All Star Tap & Grill accepting the plaintiffs’ offer to settle. The case proceeded to trial, and the trial took as long as it did because of the issue of liability of the All Star Tap & Grill and because the All Star Tap & Grill contested the quantum of the plaintiffs’ damages. The Jantzi defendants submit that the plaintiffs’ costs to the date of their offer to contribute should be divided equally and that the All Star Tap & Grill should be responsible for 80% of the plaintiffs’ costs after that date.
12It is the position of the All Star Tap & Grill that the party who was responsible for the majority of the plaintiffs’ damages was Philip Jantzi and that the plaintiffs’ costs should be apportioned as between the defendants on the basis of the apportionment of liability as determined at trial. At no time did the Jantzi defendants admit liability to the plaintiffs or admit the quantum of the plaintiffs’ damages. All issues were contested at trial by both defendants. After factoring in contributory negligence, the All Star Tap & Grill calculates that the apportionment of liability between it and the Jantzi defendants to be 75% as against the Jantzi defendants and 25% against it. The All Star Tap & Grill submits that responsibility for the plaintiffs’ costs should be allocated in the same percentages.
Legal Principles
13Section 131(1) of the Courts of Justice Act provides that the costs of a proceeding are in the discretion of the court. Rule 57.01 of the Rules of Civil Procedure sets out the factors to be considered when exercising the discretion to award costs. Not all of the factors listed in Rule 57.01 are relevant to the present case but those that could be considered are:
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding;
(g) a party’s denial of or refusal to admit anything that should have been admitted; and
(i) any other matter relevant to the question of costs.
14Frequently, the costs awarded to a plaintiff are apportioned as between defendants on the basis of their respective degrees of fault: Mortimer v. Cameron, [1994] O.J. No. 277 at para. 75. But that is not a rule of strict application: Rochon v. MacDonald, 2014 ONSC 362, [2014] O.J. No. 362 at para. 8 and Caton v. Devecseri, 2012 ONSC 4640 at para. 43.
15Costs to which a plaintiff is entitled are at times allocated on the basis of the respective limits of liability of insurance policies of responsible parties: Ward v. Dingwall (2014), 2014 ONSC 126, 118 O.R. (3d) 550 at paras. 39 and 53. Plaintiffs’ costs have also been ordered to be paid equally by two parties to the action even though there is a significant difference in their respective apportionment of responsibility to pay the plaintiffs’ damages: Rochon v. MacDonald, 2014 ONSC 362, [2014] O.J. No.362 at para. 15.
16One of the purposes of the modern costs rule is to encourage settlement: Fong v. Chan, [1999] O.J. No. 4600.
17Costs are in the discretion of the court because every case is unique and must be considered in the context in which it was litigated: Rochon v. MacDonald, 2014 ONSC 362, [2014] O.J. No.362 at para. 9.
Discussion
18I am unable to agree with the position taken by the Jantzi defendants that the trial was solely about the liability of the All Star Tap and Grill. I accept that more than two years before the commencement of the trial, the Jantzi defendants offered to pay their policy limits in return for a full and final release and then eventually made an advance payment in the amount of the policy limits without being given a release. However, it is clear that the plaintiffs did not forgo their entitlement to seek damages in excess of $1 million from the Jantzi defendants. The Jantzi defendants did not make a formal admission of liability for the motor vehicle accident nor did they admit the plaintiffs’ damages. The Jantzi defendants vigorously contested, and were successful, on the issue of contributory negligence.
19The Jantzi defendants are critical of the All Star Tap & Grill for not accepting the plaintiffs’ offer to settle for $2.8 million. I note that the Jantzi defendants also did not accept the plaintiffs’ offer. The plaintiffs were then required to proceed to trial with all issues of liability and damages being contested. With the value of hindsight, the All Star Tap & Grill would have been wise to pay to the plaintiffs the difference between their offer to settle and the advance payment, in order to avoid a trial. The All Star Tap & Grill elected to proceed to trial for the purpose of avoiding or minimizing its liability and having the damages assessed at an amount which would result in it paying less than $1.8 million if it was found to be partially at fault. Again, with the value of hindsight, the All Star Tap & Grill would have been better off to accept the plaintiffs’ offer. It must bear responsibility for the choices made.
20Apportionment of liability for an accident is not the same as the responsibility to pay a judgment or costs: Rochon v. MacDonald, 2014 ONSC 362, [2014] O.J. No.362 at para. 7. Notwithstanding the judgment in this case, it appears that the plaintiffs have accepted the sum of $3 million paid by the defendants together. Of this amount the Jantzi defendants paid $1 million and the All Star Tap & Grill has paid $2 million.
21There was some complexity to this case involving complicated medical evidence, engineering experts and the liability of a commercial host. The trial was vigorously but expertly contested by counsel for all parties. The issues were of importance to all parties.
22The Jantzi defendants are critical of the All Star Tap & Grill for not facilitating the acceptance of the plaintiffs’ offer to settle. In my view that is different than refusing to admit something that should have been admitted. If this factor has any application to the present case, it would be because of the refusal of the Jantzi defendants to admit liability for the motor vehicle accident.
23Rule 57.01 allows the court to take into consideration any other matter relevant to the question of costs. The Jantzi defendants had $1 million of insurance to satisfy any judgment obtained by the plaintiffs. It was obvious that the plaintiffs’ damages would be assessed at well in excess of the policy limits. It was prudent on the part of the Jantzi defendants to make an offer to contribute policy limits in order to settle the action. When the plaintiffs made their offer to settle it became apparent that a settlement could be achieved for an amount less than the combined policy limits of the defendants. The All Star Tap & Grill was entitled to proceed to trial to seek to avoid any liability or to minimize its amount of responsibility. It was attempting to limit its obligation to pay damages to something less than its policy limits. It was unsuccessful.
24From the perspective of the insurers of the defendants, the Jantzi defendants had a policy with limits of $1 million while the All Star Tap & Grill had a policy with limits of $2 million. Both insurers had the right to attempt to protect their respective policy limits. In my view, considering the unique factors of this case and the respective policy limits of the defendants, it is fair and equitable to require the defendants to contribute to the plaintiffs’ costs in proportion to their respective policy limits.
Conclusion
25For the foregoing reasons there will be an order that the Jantzi defendants pay one third of the plaintiffs’ costs of this action and that the All Star Tap & Grill pay two thirds of the plaintiffs’ costs.
26I am inclined to make no order as to the cost of the video appearance before me with respect to the apportionment of payment of the plaintiffs’ costs. If however, there were offers to settle the issue of costs of which I am not aware, the parties may make brief written submissions within 14 days. If no such written submissions are received within that time, the issue of costs of the submissions on costs will be treated as resolved.
G.E. Taylor, J.
Date: May 14, 2020