COURT FILE NO.: CV-16-548853

MOTION HEARD: 20191223

REASONS RELEASED: 20200324

WRITTEN COSTS SUBMISSIONS FILED: 20200513

COSTS ENDORSEMENT RELEASED: 20200825

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

STEFAN SAROKIN AND OLEG PERELYGIN

Plaintiffs

• and-

JUN ZHE ZHANG

Defendant

BEFORE: MASTER M.P. McGRAW

COUNSEL: A. Kuciej E-mail: adam@levyinjurylaw.com -for the Plaintiffs

S. Katrycz E-mail: skatrycz@ztgh.com -for the Proposed Defendant, TD Insurance Company o/a Security National Insurance Company

COSTS ENDORSEMENT RELEASED: August 25, 2020

Costs Endorsement

I. Overview

[1] The Plaintiffs were successful on a motion for leave to amend their Statement of Claim to add their automobile insurer, TD Insurance o/a Security National Insurance Company (“TD”) as a Defendant to this action (Sarokin v. Zhang, 2020 ONSC 1839)(the “Reasons”). The Plaintiffs now seek costs of the motion.

[2] The Plaintiffs request costs of $11,220.26 on a partial indemnity scale while TD submits that no costs should be awarded.

II. The Law and Analysis

[3] The main issue was the application of the 2-year limitation period and discoverability to indemnity claims by insureds against their automobile insurers under the uninsured motorist endorsement. As set out in the Reasons, I granted leave to add TD as a Defendant based largely on the decision of LeMay J. in Howell v. Jatheeskumar, 2016 ONSC 1381, a case in which TD was added as a Defendant in similar circumstances.

[4] Of the 3 possible outcomes identified in Howell, I held that there were numerous triable issues including discoverability and due diligence which were more properly determined at trial or on a summary judgment motion. I rejected TD’s submissions that all factual issues had been canvassed and that no further evidence was required such that all discoverability issues could be decided in its favour.

[5] Subject to the provisions of an Act or the Rules, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid (s. 131(1), Courts of Justice Act (Ontario)). In exercising this discretion, the court may consider the factors set out in Rule 57.01(1).

[6] The overriding principles in determining costs are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, (2004) 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); Deonath at para. 21). The general rule is that costs on a partial indemnity scale should follow the event which should only be departed from for very good reasons such as misconduct of the party, miscarriage in procedure or oppressive or vexatious conduct (1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 2005 16071 (ON CA), 75 O.R. (3d) 405 (C.A.); 394 Lakeshore at paras. 12-14).

[7] The Plaintiffs were successful in obtaining substantially all of the relief they sought, including the most important remedy, TD’s addition as a defendant. I find no reason to depart from the general rule that the Plaintiffs should be awarded costs of the motion to reflect this success. In the circumstances, the amount to be awarded must also reflect the importance and necessity of the motion to the Plaintiffs, the complexity of the motion and the parties’ conduct which contributed to the time and costs of the motion. This includes the numerous issues raised by TD in its unsuccessful efforts to resist being added as a defendant.

[8] TD opposed the motion notwithstanding its concession that the present case was analogous to Howell and in the face of Court of Appeal authority where discoverability and due diligence obligations were not imposed on insureds. In addition to triable issues regarding the limitation period, discoverability and due diligence, I held that there were triable issues regarding ongoing discussions between Plaintiffs’ counsel and TD to settle the Plaintiffs’ accident benefits claims since 2014. For various reasons, I also declined to conclude that the Plaintiffs’ claims should be barred because they did not comply with s. 6 of Regulation 676 under the Insurance Act to provide proof and documentation with respect to their claims. Further, although TD acknowledged that there was no evidence that the Plaintiffs delayed their claims for tactical reasons, TD advanced this argument anyway. I also rejected TD’s assertion that any actual prejudice would result from its addition as a party.

[9] TD accurately points out that many issues from the motion have yet to be finally decided. However, this does not mean that costs should not be awarded now. An opposed motion could have been avoided had TD consented to its addition as a defendant so that all issues could be dealt with on a full evidentiary record at trial or on a summary judgment motion. As the Reasons indicate, most of the issues raised by TD were not appropriate for determination on a pleadings motion and TD’s opposition, particularly on so many issues, unnecessarily added to the costs of these proceedings. While I do not rely greatly on the Plaintiffs’ verbal offers to settle the motion on a without costs basis, I have taken into account the Plaintiffs’ efforts to resolve TD’s addition as a party without the need for an opposed motion.

[10] At the same time, I am mindful that the Plaintiffs were not completely successful. I declined to conclude that the Plaintiffs’ claims were timely and I held that TD may have reasonable arguments regarding discoverability and due diligence such that the Plaintiffs could or should have made a request for indemnity or sought leave to amend sooner. This calls for a reduction in the amount the Plaintiffs should receive. The costs awarded must be reduced further given that the Plaintiffs only scheduled 30 minutes for the initial attendance on October 28, 2019 and did not deliver a Factum, which, given the complexity of this motion, necessitated an adjournment.

[11] Having considered all of the relevant factors and circumstances, I have determined that it is fair, reasonable, proportionate and consistent with Rule 1.04(1) for TD to pay costs tothe Plaintiffs fixed in the amount of $6,500 payable within 30 days. In assessing the reasonable expectations of the parties, I have also taken into consideration TD’s Costs Outline which indicates that it would have sought $5,802.04 on this motion if successful.

Costs Endorsement Released: August 25, 2020

Master M.P. McGraw