Court File and Parties

COURT FILE NO.: CV-13-113859 DATE: 2020-06-02 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Harry Blaese and Soren Blaese, Plaintiffs AND: Robert Metcalfe and Catherine Metcalfe, Defendants

BEFORE: Justice M.L. Edwards

COUNSEL: Vincent Genova, Counsel, for the Plaintiffs R. Donald Rollo, Counsel, for the Defendants

HEARD: In Writing

COSTS ENDORSEMENT

Overview

[1] The parties, to their credit, agreed to bifurcate liability and damages in this matter, and as a result liability was dealt with by a jury between November 18 and November 22, 2019. The jury returned with a verdict finding liability in favour of the plaintiffs, apportioning liability as follows: 92% against the plaintiffs and 8% against the defendants. The parties have now exchanged written submissions with respect to costs. The plaintiffs are asking the court to fix costs in the amount of approximately $120,000 on a partial indemnity scale, plus disbursements of approximately $20,000. The defendants take the position that the court should award costs of approximately $40,000 plus disbursements.

Offers to Settle

[2] Prior to the commencement of the trial, both parties exchanged offers to settle. The defendants’ offer amounted to what would have forced a total capitulation on the part of the plaintiffs, as it required the plaintiffs to accept a disposition that would have dismissed the action on a without costs basis. The plaintiffs, on the other hand, offered to settle on the basis of a payment by the defendants of $300,000 plus interest, plus costs. Neither side made an offer that dealt exclusively with liability. In future, where a case proceeds to trial where the only issue is liability, it may assist the court if the parties exchange offers that only deal with liability.

Position of the Plaintiffs

[3] In support of the plaintiffs’ position seeking costs on a partial indemnity basis to be fixed in an amount well in excess of $100,000, plaintiffs’ counsel has referred the court to a number of decisions where the insurer for the defendants in this case took a similar “scorched earth” perspective to the resolution of an action. Regardless of the fact that the plaintiffs only succeeded in establishing a liability apportionment of 8% against the defendants, it is argued that the plaintiffs were the successful party at trial.

[4] Supporting the plaintiffs’ position for costs, plaintiffs’ counsel has also served a detailed breakdown of the costs incurred throughout this action together with a listing of the plaintiffs’ disbursements.

Position of the Defendants

[5] Mr. Rollo initially argued that this court should not exercise its discretion to make any award of costs until the damages portion of the action had been disposed of. That objection was ultimately removed, and as such this court is now asked to critically review the plaintiffs’ dockets filed in support of the plaintiffs’ costs. In that regard, Mr. Rollo notes that a significant quantum of the costs claimed clearly relate to work done on behalf of the plaintiffs solely in connection with the damages portion of this action.

[6] As for the argument that the defendants’ insurer refused to make any offer going into trial and the case law cited by Mr. Genova in that regard, Mr. Rollo points out that this court must exercise its discretion with respect to costs solely as it relates to the conduct of this action and not the conduct of a particular insurer in unrelated matters.

[7] As it relates to the issue of disbursements, Mr. Rollo takes issue with two of the disbursements for which he essentially seeks further information, specifically disbursements incurred with respect to two previous law firms which had been retained by the plaintiffs prior to Mr. Genova’s retainer.

Analysis

[8] The conduct of this action by both counsel, in my view, merits some judicial comment. Rule 6.1.01 of the Rules of Civil Procedure gives the court the discretion, with the consent of the parties, to order a separate hearing on one or more issues in a proceeding. Specifically, with the consent of the parties the court can bifurcate issues of liability and damages. Case law has developed which makes it clear that a jury trial cannot be bifurcated without the consent of the parties: see Bondy-Rafael v. Potrebic 2015 ONSC 3655, 128 O.R. (3d) 767 (Div. Ct.) and Robichaud et al. v. Constantinidis et al., 2018 ONSC 227, 22 CPC (8th) 227 (S.C.J.). In this case, both counsel obtained the consent of their clients to bifurcate the trial so that the key issue between the parties – that being liability, could be dealt with expeditiously. Undoubtedly, counsel believed that the verdict of the jury as it relates to the liability issue would likely then inform how the parties might deal with damages. Counsel should be commended for their informed approach to the trial of this action.

[9] With the COVID-19 pandemic it has become increasingly apparent to the court that wherever possible, judicial economies of scale will have to be employed in the future to ensure that parties have access to our court system. An amendment to the Rules of Civil Procedure, giving the court the discretion to bifurcate issues of liability and damages absent the consent of the parties, is something that the Civil Rules Committee may wish to consider.

[10] In making an award of costs the court is, of course, obliged to consider fixing an amount that is reasonable and proportionate. The ultimate award of costs at the same time must be viewed as something that is reasonable from the perspective of the losing party: see Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) and Davies v. Clarington (Municipality) et al., 2009 ONCA 722.

[11] The Court of Appeal, at paragraph 52 of Davies, makes clear that the court must apply the overriding principle of reasonableness and arrive at an award that reflects what the court views as a reasonable amount that should be paid by the unsuccessful party, rather than an exact measure of the actual cost of the successful litigant.

[12] While the plaintiffs’ bill of costs is helpful in understanding the total quantum of time expended by plaintiffs’ counsel (none of which I take issue with), it nonetheless did conflate issues of liability and damages.

[13] In addition to the principles enunciated by the Court of Appeal in both Davies and Boucher, I am obliged to consider the application of Rule 57.01 which sets forth the general principles that must guide the court in exercising the discretion to award costs under s. 131 of the Courts of Justice Act. The trial of this action before a jury was a relatively straightforward trial, taking approximately five days of court time. Undoubtedly, there would be preparation time incurred by counsel to present their case to the jury. Defence counsel did not, nor do I, take any issue with the fact that Mr. Genova had assisting him junior counsel.

[14] In my view, taking into account all the various principles that I am required to consider under both Rule 57.01 as well as the guidance given by the Court of Appeal in Davies and Boucher, I am of the view that an appropriate award of costs in this matter, fixed on a partial indemnity basis, would be $55,000 plus disbursements. The disbursements incurred, and as listed in the plaintiffs’ list of disbursements, are only challenged to the extent of two disbursements that appear to have been incurred by the plaintiffs’ former solicitors. I would encourage counsel to resolve that issue.

[15] If further submissions are required as it relates solely to the issue of those two disbursements, counsel can submit two pages of written submissions and I will resolve the issue of disbursements. If I do not hear from counsel within the next seven days as it relates to the issue of disbursements, I will assume that that issue has been resolved. The award of costs also bears HST.

Justice M.L. Edwards Date: June 2, 2020