Court File and Parties
COURT FILE NO.: CV-19-620346 DATE: 20200708 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: GEORGE MACPHERSON and SIERRA MACPHERSON, a minor, by her Litigation Guardian, GEORGE MACPHERSON, Plaintiffs AND: SYLVIA MARIE-LOUISE SAMUEL, DAVID PAQUETTE (also known as MARK PAQUETTE), ALLAN STAR ROOFING LTD. AND EBRAHIM KHEZRI, Defendants
BEFORE: Kimmel J.
COUNSEL: K. Wolf and D. Tomovski, for the Plaintiffs/Responding Parties P. Banerjee and Y. Barsky, for the Defendant Sylvia Marie-Louise Samuel, Moving Party D. Bierstone, for the Defendants Allan Star Roofing and Ebrahim Khezri, Moving Party No one appearing for the defendant David Paquette (also known as Mark Paquette), who was noted in default and is now deceased
READ: Written costs submissions dated June 5, 12 and 18, 2020
Costs Endorsement (Defendants’ Motions for Summary Judgment)
[1] In an endorsement dated May 6, 2020, I dismissed two motions for summary judgment, brought by the Allan Star defendants and Ms. Samuel. I found there to be genuine issues for trial regarding the credibility of the plaintiff George MacPherson that could impact the determination of whether these defendants owed him duties of care and, if so, whether those duties were breached.
[2] The defendants acknowledged that I would have to make findings that the plaintiff was not credible and would have to disregard certain of his testimony for them to succeed on their respective motions, but they argued that the court could and should use its enhanced fact-finding powers to do so in this case based on the plaintiff’s own testimony and other objective evidence. They were not prepared to have me decide the motion on the basis that all of the plaintiff’s evidence be accepted as true.
Parties’ Positions on Costs
The Plaintiffs’ Position on Costs
[3] The plaintiffs seek partial indemnity costs of these motions under Rule 57.01 of the Rules of Civil Procedure, in the amount of $75,000.00 all inclusive, comprised of costs outlines indicating partial indemnity costs of $39,541.67 in respect of the motion by the Allan Star defendants and $33,514.05 in respect of the motion by Ms. Samuel, plus some costs for preparing their cost submissions. The plaintiffs argue that these motions put their entire claims at issue and had to be hard fought, leaving no stone unturned. The stakes were high and the claims against these remaining (moving) defendants were more complex than the claims against the in-default defendant Paquette who is now deceased and was uninsured, although Paquette did appear to be examined on the pending motion at the request of one of the defendants before he died.
[4] The plaintiffs argue that the amount of costs sought should have been within the contemplation of the losing defendants, whose costs outlines indicated their own partial indemnity costs of this motion to be more than $80,000.00 in the aggregate, with $68,606.74 attributed to the Allan Star defendants alone.
[5] Relying on the principal of indemnity and reasonable expectations from earlier caselaw (e.g. Boucher v. Public Accountants’ Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (CA) at para. 26 and Davies v. Clarington (Municipality), 2009 ONCA 722 at para. 52), now embodied in sub-rules 57.01(0.a) and (0.b) of the Rules of Civil Procedure, the plaintiffs argue that the amounts claimed are based on reasonable partial indemnity hourly rates ($375 per hour for experienced counsel, approximately 60% of his actual hourly rate of $625, and $200 per hour for more junior counsel), and the hours spent are consistent with what the lawyers for the moving defendants expended. The plaintiffs argue that the court should not engage in a retrospective analysis, second guessing “the amount of time spent on the case or the allocation of counsel to the tasks at hand,” when the time and rates are within the range of reasonable. See Gallo v. Bramalea City Centre Equities Inc., 2019 ONSC 2227, at para. 14, citing Risorto v. State Farm Mutual Automobile Insurance Co (2003), 64 O.R. (3d) 135.
The Defendants’ Position on Costs
[6] The defendants argue that the partial indemnity costs claimed by the plaintiffs are too high because:
a. The partial indemnity rates are higher than those charged by their own lawyers, some of whom had more experience than plaintiff’s counsel;
b. Plaintiffs’ counsel is likely working under a contingency arrangement that has not been disclosed;
c. Some of the arguments raised by the plaintiffs in opposition to the motions (such as the requirement for leave to bring the motions and a res judicata argument arising from an earlier interlocutory decision of Trimble J.) were not accepted by the court, and ultimately the court could have decided all of the issues but for the credibility points that arose out of Mr. MacPherson’s testimony after the motions were brought; and
d. Even though they themselves incurred partial indemnity costs totalling in excess of what the plaintiffs are claiming, they did not reasonably expect that they would have to pay costs in that amount if they lost, based on cost awards in other summary judgment cases and the overlap of issues on their two motions which should not have led to double the work for plaintiffs’ counsel.
[7] The defendants submit that an aggregate award of $30,000.00 of partial indemnity costs against all moving defendants would be more reasonable.
[8] The defendants also argue that their motions were reasonable given that they were peripheral players, compared to the defendant Paquette, and that they had good defences to the plaintiffs’ claims, including certain arguments that they maintain did not depend on credibility determinations that they contend were not addressed in the court’s endorsement on this motion.
Costs Disposition
[9] I do not understand the plaintiffs to be arguing that the defendants acted unreasonably in bringing the summary judgment motions (which might attract substantial indemnity rather than partial indemnity costs under Rule 20.06 of the Rules of Civil Procedure). I disagree with the latter point raised by the defendants in support of their position on reasonableness. However, I will say no more than to refer the parties back to my endorsement which I believe does address these arguments and why they could have been impacted by the assessments of Mr. MacPherson’s credibility that I was not prepared to make on the written record.
[10] There appears to be no dispute that the plaintiffs are entitled to be awarded their partial indemnity costs of these summary judgment motions. That is consistent with Rules 20, 37 and 57 of the Rules of Civil Procedure and I commend the parties for their concurrence to that extent.
[11] I agree generally that the relevant principles that are to guide me in the determination of the appropriate amount of costs have been identified by the plaintiffs.
[12] The court has a broad discretion when determining the issue of costs. Rule 57.01 of the Rules of Civil Procedure sets a non-exclusive list of factors that may be considered in the exercise of that discretion. I have considered the factors that are applicable in this case, including the result of the motions, what was at stake, the complexity and importance of the issues and the conduct of the parties.
[13] One of the factors that favours the moving defendants contention that the amounts claimed by the plaintiffs should be reduced is that the plaintiffs pursued many issues rather than focussing on the ones that raised genuine issues for trial, including the pursuit of some procedural points that he was not successful on.
[14] The amount of costs that the unsuccessful parties could reasonably have expected to pay is a relevant factor that has been expressly incorporated into Rule 57.01(1)(0.b) of the Rules of Civil Procedure. While not determinative, the amount of partial indemnity costs that the moving parties collectively indicated in their costs outlines prior to learning the outcome of their motions, which exceeds $80,000.00, is an objective indication of what they could reasonably have expected to recover, and thus to pay, in partial indemnity costs. This is more persuasive to me than their statements now that, while those costs were incurred by their counsel who were working hard to have the action dismissed, they did not expect the same of plaintiffs’ counsel in responding to their motions.
[15] The principle of indemnity expressly incorporated into Rule 57.01(1)(0.a) of the Rules of Civil Procedure, leads me to consider the level of experience, allocation of responsibilities and hourly rates of the plaintiffs’ legal representation. Partial indemnity costs that are calculated based on 60% of actual hourly rates are within the range of what is to be expected. I do not agree with the defendants’ submissions that the fact that plaintiffs’ counsel may be working on contingency is a relevant consideration when determining the amount of the partial indemnity costs to which the plaintiffs are entitled after successfully opposing the summary dismissal of his action.
[16] I am not going to get into the weeds and assess the specific calculations of the lawyer’s hours and rates. Rather, adopting the approach taken by the parties, I have assessed an overall amount of costs that are payable by the defendants to the plaintiffs for the summary judgment motions, based on what I consider to be reasonable having regard to the relevant considerations.
[17] Although not directly addressed by the parties, another relevant consideration in my determination of a reasonable and proportionate amount of partial indemnity costs in this case is the prospect that some of the efforts expended on these motions will inevitably be useful at the trial, even though the motions were unsuccessful. While the trial efficiencies will be different with a jury trial than if this were to proceed to trial before me, there are still advantages in the development of the evidence and the identification of the issues that will have to be decided that have been gained through this process. This warrants some reduction of the costs claimed, which are better addressed as part of the costs of the action. As noted earlier, a reduction is also warranted for the time spent on interlocutory and procedural points that the plaintiffs did not succeed on. I do not consider this to be a situation of divided success, but I do consider these to be relevant considerations in the exercise of my discretion to fix the appropriate amount of costs to award to the plaintiffs for these motions.
[18] Having considered the submissions of the parties and having regard to the Rule 57.01 of the Rules of Civil Procedure factors that are to guide the exercise of my discretion in awarding costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C-42, I am fixing the plaintiffs’ partial indemnity costs of the summary judgment motions in the all-inclusive amount of $55,000.00.
[19] Based on my knowledge of the issues and the procedural history, it is surprising to me that the amounts claimed as against the Allan Star defendants and Ms. Samuel are roughly the same. I would have expected the costs associated with the motion by Ms. Samuel to be less. Subject to any agreement that the defendants have reached as between themselves regarding the respective contributions to any costs award made, I order that two-thirds of costs are payable by the Allan Star defendants and one-third are payable by Ms. Samuel. These costs are payable within 30 days of this endorsement.
[20] Notwithstanding Rule 59.05 of the Rules of Civil Procedure and in accordance with Rule 1.04 of the Rules of Civil Procedure, this endorsement and the resulting orders dismissing the defendants’ summary judgment motions are effective from and after the date indicated below and enforceable without any need for the entry and filing of formal orders. Any party to this endorsement may nonetheless submit (with this PDF copy of my endorsement) a formal order(s) for original signing, entry and filing if required for an appeal or motion for leave to appeal to an appellate court. Any party may also do so for any other reason when the Court returns to regular operations.
Kimmel J.