Court File and Parties

COURT FILE NO.: CV-13-488430

MOTION HEARD: 20200312

REASONS RELEASED: 20200629

WRITTEN COSTS SUBMISSIONS FILED: 20200731

COSTS ENDORSEMENT RELEASED: 20201103

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

SUZETTE JEFFERS Plaintiff

• and-

INTACT INSURANCE formerly known as ING INSURANCE COMPANY OF CANADA Defendant

BEFORE: MASTER M.P. McGRAW

COUNSEL: R.J. Hooper Email: rob@grossohooperlaw.ca

• for the Plaintiff, Suzette Jeffers

J. Evans Email: joseph.evans@intact.net

• for the Defendant, Intact Insurance formerly known as ING Insurance Company of Canada

COSTS ENDORSEMENT RELEASED: November 3, 2020

Costs Endorsement

I. Overview

[1] By Reasons For Endorsement dated June 29, 2020 (Jeffers v. Intact Insurance formerly known as ING Insurance Company of Canada, 2020 ONSC 4047)(the “Reasons”), I granted the Plaintiff’s motion to set aside the Order of the Registrar Dismissing Action For Delay dated October 1, 2018 (the “Dismissal Order”). The parties were unable to agree on costs and filed written submissions.

[2] The Plaintiff, Suzette Jeffers, seeks costs of $18,574.38 on a substantial indemnity scale. The Defendant, Intact Insurance (“Intact”) also seeks costs, claiming $4,841.64 on a partial indemnity scale, submitting in the alternative that no costs should be awarded.

II. The Law and Analysis

[3] 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, in addition to the result and any offer to settle made in writing, the court may consider the factors set out in Rule 57.01(1).

[4] 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 v. Iqbal, 2017 ONSC 3672 at paras. 20-21). 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 Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at paras. 10, 12-14).

[5] The Plaintiff was completely successful on the motion, therefore, generally speaking, she should be entitled to costs. However, Intact submits that it should receive costs given that the Plaintiff received an indulgence or discretionary relief from the court as the motion would not have been necessary had the Plaintiff taken the steps necessary to move the action forward.

[6] Intact relies on Minogue v. Harper, 2018 ONSC 5551, Kalair v. The Globe and Mail Inc., 2019 ONSC 6991 and Doyle et. al. v. Budge et. al., 2020 ONSC 1812, all cases where plaintiffs were successful in having registrar’s dismissal orders set aside but were not awarded costs on the basis that they received an indulgence. In Minogue, the plaintiff was ordered to pay costs to both defendants, in Kalair the plaintiff was ordered to pay costs in the cause and no costs were awarded in Doyle.

[7] In Mollicone v. Caledon (Town), 2011 ONSC 883, Michael G. Quigley J. defined an “indulgence” as follows:

“An indulgence is something that is granted as a favour or privilege. It contemplates liberal or lenient treatment to the person who receives it, embracing notions of tolerance. In the context of business or the law in which it is used here it signifies the granting of permission to do something that is time or performance related that would not otherwise be permissible, such as extending a period of time to permit what would otherwise be out of time payment of a sum or performance of an obligation. It connotes notions of forbearance. Indeed, in this sense and in a legal context, it can be seen as the extension of the equity of the Sovereign's grace and mercy to permit an oversight or failure on the part of a litigant to be overlooked.” (Mollicone at para. 14)

[8] In the present case, although Ms. Jeffers sought and received an indulgence, I conclude in the circumstances that there is no reason to depart from the general rule that costs should follow the event. In arriving at this conclusion, I agree with Intact that the motion would not have been necessary but for the Plaintiff’s failure to move this action forward. However, to equate the dire position in which Ms. Jeffers was placed by her former counsel with the cases cited by Intact would be to ignore her lawyer’s extraordinary conduct.

[9] Intact also submits that it was reasonable for it to demand an explanation as to the inactivity in this litigation. I agree, however, Intact received an explanation from Ms. Jeffers before the motion was heard. In it, she set out in great detail how her former counsel, Sergio Grillone, who suffered from mental illness, did not communicate with her regarding the status of her action, requiring her to persistently seek updates and meetings. By the time Ms. Jeffers met with him, unbeknownst to her, this action had been dismissed many months sooner. However, Mr. Grillone misrepresented and fabricated the status of this action, advising her about fictitious meetings and court attendances which led her to erroneously believe that a settlement or a court decision was imminent.

[10] At no time did Mr. Grillone advise Ms. Jeffers that her action had been dismissed. She only learned of the Dismissal Order some 10 months after it had been issued when she met with Mr. Grillone’s former law clerk after Mr. Grillone went on medical leave. His practice was later placed into trusteeship by the Law Society of Ontario. As set out in the Reasons, I held that Ms. Jeffers always intended to pursue her claim and genuinely believed that it was still proceeding. I also concluded that setting aside the Dismissal Order was consistent with the established principle that the actions and inactions of counsel should not to be visited upon an innocent client especially where it would deprive her of the right to have her claim determined on the merits.

[11] When a party seeks an indulgence, the responding party does not have a blank cheque or a free pass to raise as many arguments as it chooses without risking a costs award. Costs to a defendant do not automatically follow every indulgence or discretionary relief granted. The indulgence and the right to reasonably oppose its granting must be carefully balanced. This is particularly true in the present circumstances where Ms. Jeffers faced the dismissal of her action due to extraordinary circumstances caused by her counsel which were beyond her control. In this regard, I adopt the reasoning of P.J. Flynn J. in Cambridge Bingo Centre v. 149974 Ontario Limited, 2018 ONSC 935 at paras. 67-74:

“67 The fact that the Plaintiff seeks the indulgence of the Court on a Rule 48 Motion does not mean that the Defendants or the Third Parties can oppose it on a no-risk basis.

68 In my view, the outcome of this motion should never have been in doubt. It ought to have had the opposing parties' consent.

69 I see no reason to deviate from the general rule that costs follow the event. The Plaintiff was totally successful and should have its costs of the motion.

70 Here, the Plaintiff notified its opponents that it would seek costs on April 21, 2017. And it delivered case law showing instances of costs being awarded to all of its opponents.

71 My task is to fix costs that are fair and reasonable, within the reasonable expectations of the losing side.

72 The Plaintiff seeks substantial indemnity costs because it warned the others that it would seek costs last April. It is true that it would have been the better course for the Defendants and Third Parties to simply have consented to the setting aside of the Registrar's Dismissal Order. But they opposed the motion and must eat dust as losers do.

73 But that doesn't mean that they should have to incur substantial indemnity costs.

74 The Plaintiff has some, indeed much, responsibility for the languid pace of the litigation. This action has taken too long to come as far as it has. Accordingly, the Plaintiff's entitlement to costs must be held to partial indemnity costs.”

[12] In my view, the indulgence granted to the Plaintiff here does not disentitle her to costs but rather should factor into the scale and quantum awarded. Similar to the court’s conclusion in Cambridge Bingo, given the indulgence she has received, costs should be awarded on a partial indemnity scale. This conclusion is supported by the absence of any abusive or other conduct on the part of Intact which would call for costs on a substantial indemnity scale (Standard Life Assurance Co. v. Elliot, 2007 18579 (ON SC), [2007] O.J. No. 2031 (S.C.J.) at paras. 9-10).

[13] In addition to the Plaintiff’s success and the indulgence she received, other factors are relevant to my determination of costs. These include the parties’ offers to settle and conduct of the parties which tended to unnecessarily lengthen the proceeding (Rule 57.01(1)(e)) and the failure of a party to admit anything it should have (Rule 57.01 (1)(g)).

[14] On January 13, 2020, the Plaintiff delivered an offer to settle the motion pursuant to which the Dismissal Order would be set aside on a without costs basis and the parties would agree to a timetable. The following day, January 14, 2020, Intact made a counter-offer requiring the Plaintiff to withdraw the motion, pay costs starting at $3,500 depending on when she accepted and execute a release. These were not Rule 49.10 offers to settle as they were not open for acceptance until after the commencement of the hearing. This further supports the granting of costs on a partial indemnity scale.

[15] Having received the Plaintiff’s explanation and her offer to settle, rather than turn its focus to a timetable or even proceed to argue the motion on the existing record, Intact added unnecessary time and cost by delivering additional materials and conducting further cross-examinations. Intact also advanced numerous arguments, many without merit, in a failed attempt to demonstrate actual prejudice notwithstanding that productions and examinations for discovery had already been completed in this and a related action (in which Ms. Jeffers was examined twice). Among other things, Intact argued unsuccessfully that prejudice would result because the Plaintiff settled the related action without its consent and had no cause of action against Intact such that I should dismiss this action based on the merits. Intact was unable to refer me to any case law, arguing only that it would be more efficient than waiting to bring a summary judgment motion.

[16] I further conclude that since the Plaintiff would have had to bring the motion in any event, and given Intact’s entitlement to an explanation, she should only receive costs after January 13, 2020 when her offer to settle was not accepted. Having reviewed the Costs Outlines and considered the relevant factors, I conclude that it is fair and reasonable in all of the circumstances and within the reasonable expectations of the parties for Intact pay costs of $6,000 to Ms. Jeffers, fixed and payable within 30 days.

Costs Endorsement Released: November 3, 2020

Master M.P. McGraw