Superior Court of Justice

COURT FILE NO.: CV-19-00626598-0000

DATE: 20210422

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CELIA YANG Plaintiff

• and -

CO-OPERATORS GENERAL INSURANCE COMPANY, VIVIAN POON, MALA LEIDOUX, SCM INSURANCE SERVICES INC. (a.k.a. CIRA MEDICAL SERVICES INC.), DR. ROBERT BRIAN HINES, RANYA GHATAS, SCM INSURANCE SERVICES GP INC., CIRA HEALTH SOLUTIONS LP, DR. ABRAHAM ORNER (a.k.a. DR. AVI ORNER), ARIEL ANG and SMARTSIMPLE SOFTWARE INC. Defendants

COUNSEL:

Peter Murray and Ashu Ismail for the Plaintiff

Lee Akazaki for the Defendants, SCM Insurance Services Inc. (a.k.a. Cira Medical Services Inc.), SCM Insurance Services GP Inc., Cira Health Solutions LP, Dr. Abraham Orner (a.k.a. Dr. Avi Orner), and Ariel Ang

P. Voula Kotoulas for the Defendant Ranya Ghatas

Anne E. Posno for the Defendant Dr. Robert Brian Hines

Daniel Freudman for the Defendant SmartSimple Software Inc.

HEARD: In writing

REASONS FOR DECISION - COSTS

PERELL, J.

[1] In this action, the Plaintiff Celia Yang, who was injured in a motor vehicle accident, claims damages of $150 million. Ms. Yang’s action concerns how her automobile accident insurer, Co-operators General Insurance Company, administered her claims for statutory accident benefits (“SABs”) under O. Reg. 34/10 (Statutory Accident Benefits Schedule), a regulation of the Insurance Act.[^1]

[2] In this action, Ms. Yang sued:

1. Co-operators General Insurance Company, her automobile accident insurer;
2. Vivian Poon, an employee of Co-operators;
3. Mala Leidoux, an employee of Co-operators;
4. SCM Insurance Services Inc., a.k.a. Cira Medical Services Inc., a SABs service provider;
5. SCM Insurance Services GP Inc., a SABs service provider;
6. Cira Health Solutions LP, a SABs service provider;
7. Dr. Abraham Orner, an employee of Cira Health;
8. Ariel Ang, an employee of Cira Health;
9. Ranya Ghatas, a roster occupational therapist for Cira Health;
10. Dr. Robert Brian Hines, a roster psychiatrist for Cira Health; and
11. SmartSimple Software Inc., a software developer that developed a document management computer program used in the automobile accident insurance industry.

[3] Ms. Yang settled with the Defendants: (1) Co-operators General Insurance Company; (2) Vivian Poon, an employee of Co-operators; and (3) Mala Leidoux.

[4] The Defendants SCM Insurance Services Inc., SCM Insurance Services GP Inc., Cira Health Solutions LP, Dr. Orner, and Ms. Ang. (the “Cira Health Defendants”) (Nos. 4, 5, 6, 7, and 8 above) brought a motion to strike Ms. Yang’s Statement of Claim.

[5] The Defendants Ms. Ghatas, Dr. Hines, and SmartSimple (Nos. 9, 10, and 11 above) appeared and supported the Cira Health Defendants’ motion.

[6] The Cira Health Defendants’ motion was successful, and I dismissed Ms. Yang’s action in its entirety. I found that Ms. Yang’s Statement of Claim should be struck without leave to amend because: (a) the pleading contravened rule 25.11 of the Rules of Civil Procedure;[^2] (b) the Court does not have subject matter jurisdiction over her claim; and (c) she did not plead a legally tenable cause of action against any of the defendants.[^3]

[7] The Defendant Dr. Hines and Ms. Yang settled the matter of costs. She agrees to pay the costs of the action at $10,000 plus disbursements of $422.85 and taxes, subject to any appeal the Plaintiff might bring. I, therefore, order Ms. Yang to pay Dr. Hines costs of $11,722.85, all inclusive.

[8] The Defendant Ranya Ghatas and Ms. Yang have settled the matter of costs. She agrees to pay the costs of the action at $7,000 plus disbursements of $224.50. I, therefore, order Ms. Yang to pay Ms. Ghatas costs of $7,224.50, all inclusive.

[9] SmartSimple and Ms. Yang did not settle. It requested costs on a substantial indemnity basis of $7,400.31, all inclusive. Its partial indemnity claim was $4,900.50. For reasons, that I will explain below, I shall not be awarding costs on a substantial indemnity basis. Rather, I shall grant SmartSimple costs on a partial indemnity basis of $4,900.50, all inclusive, which is fair, reasonable and in accordance with the discretionary principles that govern the awarding of costs.

[10] The Cira Health Defendants seek $62,672.04 in substantial indemnity costs, inclusive of disbursements and HST. In the alternative, they seek costs of $51,795.96, all inclusive, on a partial indemnity basis.

[11] Ms. Yang disputed that her lawyers should be personally liable to pays costs, and she submitted that the Defendants should be entitled to costs only on a partial indemnity basis.

[12] For comparative purposes, she provided her own Bill of Costs for the motion. Her Bill of Costs indicated that she would have claimed $29,037.75 on a partial indemnity basis and $45,556.63 on a substantial indemnity basis for the motion. She did not provide a bill of costs for the action.

[13] Putting aside for the moment, the Cira Health Defendants’ claim for costs on a substantial indemnity basis and also their request that the costs be paid personally by Ms. Yang’s counsel and applying the normal principles that govern an award of costs, the quantum of the Cira Health Defendants’ claim for costs on a partial indemnity basis for the action is fair and reasonable.

[14] Since, I shall not be ordering costs on a substantial indemnity basis and since I shall not be ordering the costs to be paid personally by Ms. Yang’s lawyers, it follows that the appropriate award in the immediate case for the Cira Health Defendants is $51,795.96, all inclusive, for the motion and the action on a partial indemnity basis. I so order.

[15] My explanation for not awarding costs on a substantial indemnity basis is that insofar as the action before the court was concerned, it was conceded that there was no misconduct that would justify awarding costs on a punitive basis. The motion itself was organized and steps were taken with full co-operation of Ms. Yang’s counsel.

[16] The basis for both the Cira Health Defendants’ claim for substantial indemnity costs and also for the request that the costs be paid personally by Ms. Yang’s lawyers was the propositions that it could be shown based on the public record of other actions involving Ms. Yang’s lawyers and such things as the similar facts doctrine and based on logical inferences that could be made from the record in the immediate case, that Ms. Yang’s action was the concoction of Ms. Yang’s lawyers who were acting without her instructions.

[17] The Cira Health Defendants’ argument was that Ms. Yang, who is pleaded to have a serious cognitive capacity, has no knowledge of the workings of the Statutory Benefits scheme.

[18] It is submitted that Ms. Yang was not capable of giving the instructions to plead the Statement of Claim that I struck as a matter of form, substance, and jurisdiction. From this proposition, the Cira Health Defendants argue that since it can be proven that the mentally incapable Ms. Yang was incapable of giving instructions, her lawyers were on a frolic of their own and should be responsible to pay costs personally.

[19] A taste of the Cira Health Defendants’ argument can be had from paragraph 2 of the Cira Health Defendants’ costs submissions which states:

2. The question whether Ms. Yang or her lawyers should be liable to pay the Cira defendants’ costs of unnecessary and wasteful proceeding turns on authorship of the inflammatory pleadings in the statement of claim, as opposed to the simple narrative of Ms. Yang’s claim. The following facts lead to an inevitable conclusion from two opening improbabilities:

(a) On the one hand, Ms. Yang, a person described as an accident victim with catastrophically diminished cognitive ability, could not have instructed her lawyers to prepare the civil procedure equivalent of a Rube Goldberg machine. On the other hand, it is hard to imagine how the plaintiff’s lawyers, expert civil litigators, could have prepared such inflammatory allegations. And yet the statement of claim is a real artifact. The key is the evidence that the lawyers, not Ms. Yang, had unfinished business from their thwarted public interest litigation, and that Ms. Yang was not the first client enlisted to provide standing to reignite that cause.

(b) The public record contains evidence that, prior to this action, Ms. Yang’s lawyers were repelled in their own attempt to be the “private attorney general” to oppose the statutory jurisdiction of the LAT, for lack of standing. Since then, the same lawyers brought a claim, in the name of another client, Martino, against the Ontario Superintendent of Financial Services for having conspired with SCM, the latter serving as an umbrella organization that included Cira, insurance adjusters and counsel, to undermine the accident benefits scheme. The pleading in Martino served as a template for Yang, in that the separate SABS claims and insurers could be substituted without affecting the narratives.

(c) Ms. Yang and her lawyers, the evidence of motive and the similar-fact evidence of the precursor pleading in Martino demonstrate that the lawyers are more likely to have been the instigators of this litigation than Ms. Yang. Therefore, the lawyers, not Ms. Yang, should bear the cost burden of the defence mobilized by the issuance of the statement of claim.

[20] Ironically (because two pleadings wrong do not make it right), on a quest for an additional $11,000 of costs, it is now the Cira Health Defendants who are making the adjudication of costs the civil procedure equivalent of a Rube Goldberg machine and a real artifact.

[21] Moreover, the underlying factual propositions of their costs submissions goes far beyond what can be decided fairly based on written submissions to resolve costs.

[22] Apart from the due process problems, the underlying factual matter upon which the Cira Health Defendants’ claim for costs on a substantial indemnity basis rests, and also the basis for having Ms. Yang’s lawyers personally liable to pay costs, is the assertion that she was not mentally capable to give the instructions to plead the Statement of Claim that was struck as a matter of form, substance, and jurisdiction.

[23] It would be not fair to Ms. Yang, in particular, or to her lawyers to make a finding that she is a person under a disability who ought to have had a litigation guardian.

[24] I rather shall treat the matter of costs in the same way that I dealt with the Cira Health Defendants’ motion, - which ought not to have been brought if it was genuinely the case that Ms. Yang was incapable of giving instructions; i.e., that she was a party under disability.

[25] Rule 7.01 (1) provides that a proceeding shall be continued on behalf of a party under disability only by a litigation guardian. No litigation guardian has been appointed in the immediate case, and if Cira Health genuinely believed that Ms. Yang, who was an adult at the time the action was commenced, was a person under a disability, which is to say incapable of giving instructions to her counsel, then a litigation guardian ought to have been appointed before Cira Health continued the action by bringing a pleadings motion to have it dismissed.

[26] Alternatively, if the Cira Health Defendants had a concern that Ms. Yang’s counsel were on a quixotic mission and legal frolic of their own, then Cira Health ought to have relied on Rule 15.02, which provides a procedure for a party to determine whether a lawyer purporting to act for another party is acting with proper authority.

[27] Under 15.02, a party is entitled to disclosure of whether the other party authorized its lawyer to commence the proceeding and whether a corporate plaintiff was properly authorized to instruct counsel to commence the proceeding. Rule 15.02 does not set out what is required as proof that the client authorized the commencement of the proceeding and what is required will depend upon the circumstances of the case.

[28] In short, I award the Cira Health Defendants costs on a partial indemnity basis of $51,795.96, all inclusive.

[29] Orders accordingly.

Perell, J.

Released: April 22, 2021

COURT FILE NO.: CV-19-00626598-0000

DATE: 20210422

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CELIA YANG Plaintiff

• and -

CO-OPERATORS GENERAL INSURANCE COMPANY, VIVIAN POON, MALA LEIDOUX, SCM INSURANCE SERVICES INC. (a.k.a. CIRA MEDICAL SERVICES INC.), DR. ROBERT BRIAN HINES, RANYA GHATAS, SCM INSURANCE SERVICES GP INC., CIRA HEALTH SOLUTIONS LP, DR. ABRAHAM ORNER (a.k.a. DR. AVI ORNER), ARIEL ANG and SMARTSIMPLE SOFTWARE INC. Defendants

REASONS FOR DECISION - COSTS

PERELL J.

Released: April 22, 2021

[^1]: R.S.O. 1990, c. I.8. [^2]: R.R.O. Reg. 194. [^3]: Yang v. Co-operators General Insurance Company, 2021 ONSC 1540