Court File and Parties

COURT FILE NO.: CV-14-4954 DATE: 20200813 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Suthasini Arulanantham, Plaintiff AND: Krista M. Devine and Stephen E. Devine, Defendants

BEFORE: Madam Justice E. Ria Tzimas

COUNSEL: Salina Chagpar, Counsel for the Plaintiff Alex Feldbloom and Jennifer Marquis, Counsel for the Defendants

HEARD: Submissions in writing

Endorsement on Costs

[1] The trial of this action proceeded before a jury on January 21, 2020. The jury rendered its verdict on February 12, 2020. The issues before the court concerned damages. The plaintiff advanced a very substantial claim, but the jury rejected it in its entirety.

[2] Although the parties were encouraged to settle their costs, they were unable to do so and accordingly, I received written submissions from both of them. The defendants served and filed their costs in early March as anticipated by the court’s timeline. The plaintiff delayed her submissions until July 30, 2020. Part of the delay was caused by emergency circumstances related to COVID19. The delay was also caused by certain difficulties between counsel who represented the plaintiff at trial and Chagpar & Associates, the formal counsel of record. Those differences have no bearing on the cost award that follows.

[3] The defendants submit that as the successful parties they ought to receive a costs award on a partial indemnity basis. That figure comes to a total cost of $244,893.47, inclusive of all disbursements, applicable taxes and the fees of previous counsel.

[4] The plaintiff agrees that since she did not have any recovery the defendants are presumptively entitled to an award of costs but strongly disputes the quantum on the basis that the fees are inflated, that the defendants are seeking full recovery of their disbursements, and that in any event that what is claimed is beyond what the plaintiff could reasonably have anticipated to pay under the circumstances. She submits that a fair and just award on a partial indemnity basis would be $100,000, inclusive of assessable disbursements and applicable taxes.

[5] For the reasons that follow, I fix costs at $145,000 which I find is fair and just in all of the circumstances.

Position of the Defendants

[6] The Defendants seek costs on a partial indemnity scale, which they suggest represents two-thirds of their actual costs. They argue that as early as June 2016 they served an offer to dismiss the action on a without costs basis. That offer expired on July 6, 2016. Then they offered the plaintiff additional opportunities to walk away from the litigation in January 2019, December 2019 and early January 2020. On the eve of trial, they offered to pay a portion of the plaintiff’s disbursements in exchange for a dismissal without costs.

[7] The Defendants accept that the court has discretion over the awarding of costs pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43. They agree that such discretion is to be guided by the requirements of Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. With reference to those guidelines, the defendants submit that their costs claimed are reasonable in all the circumstances and ought to have been foreseeable by the plaintiff. They add that this was not a situation where the plaintiff advanced a modest claim or was partially successful; she advanced a very substantial claim and obtained nothing. The trial was rendered complex by the nature of the damages that were claimed. Causation was difficult to determine because of a number of post-accident life events. Counsel also pointed to the number of witnesses that were called, ten by the plaintiff and three by the defendants to underscore the magnitude of the complexity.

[8] They also say that the matter was made more complicated by a couple of motions in relation to the introduction of surveillance evidence and Ms. Devine’s right to testify at trial. The plaintiff lost both motions.

[9] Finally, with reference to jury trials and outcomes, counsel submit that the jury’s preference for the defense’s theory of the case was a relevant factor in the awarding costs and referred the court to Elbakhiet v. Palmer, 2014 ONCA 554, paragraphs 34-38.

[10] In contrast to the matter’s complexity, the defendants submit that they took various steps to shorten the length of the trial that included the preparation of a joint document brief at their own expense, exhibit binders for the court, and they did what they could to cross-examine the witnesses in an efficient and focused manner.

Position of the Plaintiff

[11] Counsel for the Plaintiff takes issue with the quantum claimed. She does not dispute that the Plaintiff was not successful. To begin with, she relies on Rule 1.04(1.1) that requires the court to make orders that are proportionate to the importance and to the complexity of the issues in dispute. She submits that the issue before the court was limited to damages for soft tissue injuries and chronic pain causation and therefore not so complicated to require two counsel to defend their claim. Specifically on the subject of two counsel, counsel drew the court’s attention to Justice Lemon’s observations in Zuk v. Atkinson, 2014 ONSC 4708 at paragraphs 6 and 7, who held that while it was entirely appropriate for defendants to divide the work among lawyers, clerks, students and assistants of different levels, it would not be appropriate for the losing party to pay those costs where one lawyer could manage the task at hand.

[12] Adding to that specific submission, counsel highlights counsel’s failure to produce dockets so as to identify what time was spent for what tasks and therefore making it impossible for the court to assess the reasonableness of the time spent. Counsel also disputes the claim that partial indemnity represented 2/3 of actual fees and relied on Rule 1.03 of the Rules of Civil Procedure and Moore v. Gehatun, 2014 ONSC 3931 for the proposition that partial indemnity fees represent 60 per cent of the successful party’s full indemnity costs.

[13] Finally, counsel challenges the claim of a number of the disbursements as being non-recoverable.

Analysis

[14] Section 131 of the Courts of Justice Act, provides the court with the discretion to award fair and reasonable costs. Such discretion is to be exercised in accordance with the considerations set out in Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:

Factors in Discretion

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) 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;

(0.b) 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;

(a) the amount claimed and the amount recovered in the proceeding;

(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 to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

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

(h) 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

(i) any other matter relevant to the question of costs. R.R.O. 1990, Reg. 194, r. 57.01 (1) ; O. Reg. 627/98, s. 6; O. Reg. 42/05, s. 4 (1); O. Reg. 575/07, s. 1.

[15] In Davies v. Clarington (Municipality), 2009 ONCA 722, [2009] O.J. No. 4236, the Court of Appeal identified reasonableness in the circumstances as the overarching principle to be applied in the awarding of costs. Epstein J.A. adopted the elements to be considered in the assessment of reasonableness in the circumstances, as they were outlined by the Divisional Court in Andersen v. St. Jude Medical Inc. (2006), 264 D.L.R. (4th) 557, and they bear repeating here:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher, [2004] OJ. No. 2634, Moon, [2004] O.J. No. 4651, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 75 O.R. (3d) 638 (C.A.).
2. A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 118 A.C.W.S. (3d) 341 (Ont. C.A.), at para.4.
3. The reasonable expectation of the unsuccessful party is to be considered in determining an amount that is fair and reasonable; rule 57.01(1)(0.b).
4. The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano v. Bank of Montreal (1998), 41 O.R. (3d) 222 (C.A.), at p.249.
5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.

See also Rodas v. Toronto Transit Commission, 2012 ONSC 5662.

[16] Epstein J.A. concluded at para. 52:

As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at 37, where Armstrong J.A. said “[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice.”

[17] In my view, having regard for the type of damages claimed, the actual damages claimed, the complexity of the evidence, and considerations for access to justice, the respective positions on costs are over and under inflated respectively.

[18] The defendants’ submissions are overinflated and create some impressions that do not line up with what occurred. For example, when they submit that the jury was picked on January 15 and that the jury verdict came in four weeks later, they create the impression that this was a 4-week trial; it was not. The trial did not begin immediately following the jury’s selection. Moreover, there were a few half day sittings, as well as days when the trial did not proceed at all because of scheduling issues. The length of the trial is very material to the determination of costs.

[19] The defendants also imply that the plaintiff was unreasonable in her claim with reference to the $1.5 million in damages claimed in the statement of claim. But counsel for the plaintiff put to the jury a far more modest figure. If there were any doubt over the plaintiff’s expectations, her Rule 49 offer of $55,000, plus costs and disbursements, in December 2018, ought to have given the defendants some substantial insight on the plaintiff’s expectations.

[20] What is more significant is that the defendants’ efforts to defeat the plaintiff’s claim was proportional to a modest claim, needing only three witnesses to respond to the plaintiff’s evidence and not to a case where $1.5 million dollars in damages was actually pursued.

[21] I also reject the defendants’ implication that the magnitude of the plaintiff’s claim was unreasonable such that given the nil outcome she should bear a higher costs burden. In this regard, I adopt Wilson J.’s observations in Rodas where she said that “cases involving damages sought for chronic pain arising from an accident often have a large sway in terms of their value and this is particularly true when the case is being tried by a jury. One of the difficulties in assessing cases of this nature is the fact that there is generally nothing objective from a clinical perspective that one can look to as a reason for the severity of the patient’s complaints. Thus, the triers of fact must look to the credibility of the Plaintiff and the expert opinions of the medical witnesses when attempting to assess the damages. The outcome is highly unpredictable in cases involving this type of injury”. Against such a dynamic it is wrong to imply that there was something untoward with respect to how the Plaintiff approached her damages.

[22] Consistent with the attempt to create impressions over the extent of counsel’s efforts, counsel for the defendants submitted a Bill of Costs that was inadequate for the purposes of determining an appropriate costs award. Although I am very mindful of the direction in Boucher, that it is not the court’s role to undertake a line-by-line review of dockets and disbursements, a bald claim, without even a modest breakdown of the various tasks and the associated time allocations, makes it virtually impossible for the court to evaluate the proportionality between time spent and the task at hand. This task is rendered even more challenging when there is multiple counsel assuming varying tasks and responsibilities.

[23] In this instance, the defendants’ Bill of Costs is especially problematic because it speaks to senior counsel spending 122 hours in pre-trial preparation time without any other explanation as to what those activities entailed. That does not appear to take into account the work that was undertaken by outside counsel before the matter was assumed in-house. While I would expect some substantial pre-trial preparation, without the benefit of any particulars for that time spent, I find these hours questionable.

[24] My concern is compounded by the fact that the evidence of such pre-trial preparation was wanting. Although my concerns with the adequacy of counsels’ performance applies to counsel for both sides, insofar as this inquiry is focused on the defendants’ costs claim, there were gaps in that preparation that caused delays and interruptions during the trial. Most problematic in this regard was the defendants’ failure to reach agreement, or alternatively, to settle on the questions that were to be put to the jury in advance of the trial commencing. Better preparation would have obviated some of the motions and voir dires, that had to be considered in the course of the trial. In short, if senior counsel spent 122 hours preparing for the trial, the product of that effort was only partially evident.

[25] Regarding the time at trial, the duplication of effort is also a concern as the case was of modest complexity and did not require the involvement of multiple counsel. To be clear, I acknowledge that two counsel and a law clerk attended at the trial on most days on behalf of the defendants. I also expressly reject the submission by the plaintiff’s counsel that the second chair was there to take notes as insulting. I hasten to add that I observed the second chair working exceptionally hard throughout the trial, with certain distinct responsibilities. These observations do not negate the fact that there was duplication in effort as between counsel for which the plaintiff should not be responsible.

[26] In addition to concerns over duplication, I find that at least some of counsels’ participation was designed to offer them both, irrespective of their level of seniority, the opportunity to conduct a jury trial and to learn from that experience. I come to that conclusion in light of counsels’ demonstrated unfamiliarity with some of the requirements related to a jury trial, the most serious one being, though not limited to, the issue of the advance preparation of the jury questions. In this regard, I do adopt the view expressed by Justice Lemon in Zuk concerning the costs of training counsel and who should bear them. The only difference on this point with Zuk is that in this instance, the training had less to do with seniority and more with actual experience conducting jury trials.

[27] Tied to my concerns about the adequacy of preparation and experience are the billing rates claimed in the Bill of Costs. Even on a partial indemnity scale, the rates claimed may have corresponded to counsels’ respective levels of seniority but they did not correspond to the demonstrated level of experience. Especially in the case of senior counsel, his years of seniority suggest to me that he may have substantial experience in other areas of practice but not necessarily with litigation or with jury trials.

[28] These concerns taken together lead me to conclude that the total hours claimed ought to be reduced by a certain percentage to account for these shortcomings.

[29] With respect to disbursements, some of the plaintiff’s concerns are valid, particularly as they relate to the fees claimed for the senior expert’s court attendance and the fees for the firm that originally represented the defendants. Although I am mindful of Tariff A associated with Rules 57 and 58 of the Rules of Civil Procedure, I am not as troubled by the travel costs and hotel costs forced on counsel as a result of the trial having to take place at the Kitchener courthouse for lack of space at the Brampton courthouse. As with the fees claimed, my purpose is not to engage in a line-by-line scrutiny of the disbursements claimed. However, two claims stand out as problematic.

[30] First, the fees claimed for the original counsel who represented the defendants is not particularized. This makes it impossible to determine what was accomplished by the previous firm, what duplication of effort may have occurred and what is a legitimate claim.

[31] Secondly the fees of almost $8,000 for the attendance in court of the defendants’ primary expert stands out as an outlier relative to the fees of all other experts who attended. Having regard to proportionality considerations as with the fees, some of the descriptions lack of any particulars for the fees and disbursements claimed by outside counsel, before the defense was assumed in-house, is problematic and difficult to assess. The same holds true for the fees of almost $8,000 for the defendants’ primary expert, as they stood out significantly as outliers when compared to the fees of other experts. Such a contrast is relevant to my overall assessment of costs.

[32] Finally, regarding the defendants’ proposed settlements, nobody suggested that there was ever a serious Rule 49 offer from the defendants’ for the plaintiff’s consideration. In the result, the reference in the defendants’ costs submissions to offers to walk away without costs is not very helpful and represents yet one more layer to the attempts to create impressions of a disposition to settle.

[33] Turning to the plaintiff’s position on costs, although her concerns over the duplication of effort and the time spent on training were largely valid, her submission that the costs being claimed exceeded her reasonable expectations on what she might be ordered to pay, is problematic and suspect.

[34] On the one hand, the plaintiff’s submission that she was prepared to settle for $55,000 plus costs and disbursements offers a measure of those expectations and lines up with a modest expectation on costs. At the time of the said offer, which was a full year before the trial, the plaintiff’s costs, as well as those of the defendants would have been a small fraction of the total trial costs. That could suggest that the plaintiff may not have had a full appreciation of her costs exposure in the event of an adverse outcome.

[35] On the other hand, the objective indicators related to the trial should have warned the plaintiff of some very substantial risks and tempered her expectations accordingly. Those indicators included the fact of a two to three week trial, the testimony of 10 witnesses for the plaintiff alone, leaving aside those to be called by the defendants and the visible efforts expended by the defendants and the involvement of two counsel and law clerk. If, in the face of those indicators, the plaintiff failed to appreciate the magnitude of her costs exposure, then something in that assessment went very wrong. For my purposes, leaving aside any other considerations that might operate to reduce the defendants’ cost claim, the implication that the plaintiff would not have expected to pay more than $100,000 in costs was unreasonable, and perhaps uninformed. Accordingly, having regard for Rule 57.01 and its reference to a party’s expectations, the plaintiff’s expectation is not a valid consideration.

[36] In light of the foregoing analysis, I make the following specific findings. First, the defendants were successful and are entitled to a costs award. It would be reasonable for the plaintiff to expect to pay costs that correspond to the requirements of a two-three-week trial. The plaintiff’s suggestion of $100,000 is low.

[37] Second, the trial was modestly complex. For the reasons already discussed, the hours claimed by defense counsel are excessive and reflect both duplication of effort and time dedicated to training. Those costs ought not to be borne by the plaintiff. Similarly, the pre-trial hours attributed to pre-trial preparations, without further description or qualification are difficult to assess and on their face are excessive. As well, the billing rates, even at the partial indemnity scale are incongruent with the demonstrated skill in the conduct of the trial.

[38] Third, the claim for certain specific disbursements was excessive and ought to be adjusted accordingly.

Conclusion

[39] The foregoing findings lead me to fix costs, inclusive of disbursements and applicable taxes at $145,000, which I consider fair and just in all of the circumstances.

E. Ria Tzimas J. Date: August 13, 2020