Court File and Parties
COURT FILE NO.: CV-12-55602
DATE: 20211117
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SERGE BROUSSEAU
Plaintiff
– and –
LA CITÉ COLLÉGIALE et LE RÉGIME DES COLLÈGES D’ARTS APPLIQUÉS ET DE TECHNOLOGIES
Defendants
Sean McGee and Anna Lichty, counsel for the Plaintiff
André Champagne and Sophie Gagnier, counsel for the Defendant La Cité Collégiale
HEARD: In writing
DECISION REGARDING COSTS
R. Smith J.
Overview
[1] The defendant, La Cité Collègiale (“La Cité”), was completely successful in defending against the claim for approximately $1.8 million dollars. La Cité seeks costs of $488,634.16 on a partial indemnity basis and $426,361.27 on a substantial indemnity basis based on exceeding its offer to settle, for a total of $914,995.43.
[2] The plaintiff, Serge Brousseau, submits that costs of approximately $260,000.00 would be in accordance with the reasonable expectations of the losing party. Serge Brousseau also submits that La Cité should not be awarded costs on a substantial indemnity basis because its offer to settle did not comply with Rule 49 of the Rules of Civil Procedure (the “Rules”).
Factors
[3] The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure and include in addition to success, the amount claimed and recovered, the complexity and importance of the matter, unreasonable conduct of any party which unduly lengthened the proceeding, scale of costs and any offer to settle, the principle of indemnity, hourly rate claimed the time spent and the principle of proportionality, and the amount that a losing party would reasonably expect to pay.
Success
[4] In this case, La Cité was completely successful in its defence as the plaintiff’s claim of approximately $1.8 million was dismissed.
Complexity and Importance
[5] The issues were quite complex as they involved the transfer of pension benefits earned with two previous employers. This involved evidence of the pension plans in question and the Supplementary Pension Benefits Plan for high income employees of La Cité. The credibility of the plaintiff on whether there was a verbal agreement with La Cité to pay an unspecified amount to him, if the pensionable years of service with previous employers could not be transferred to La Cité’s Supplementary Pension Benefits Plan.
[6] The issues were very important to both parties as the damages claimed amounted to $1.8 million.
Scale of Costs and Offers to Settle
[7] La Cité made an offer to settle on February 3, 2021 jointly with its co-defendant (“CAAT”) for the total sum of $200,000 all inclusive. The offer to settle remained open for acceptance until 5 minutes after the commencement of the trial.
[8] The co-defendant, CAAT, entered into a Pierringer Agreement with the plaintiff and settled the action against it on February 3, 2021, shortly before the commencement of the trial. Under the Pierringer Agreement, CAAT settled with the plaintiff for $200,000, the full amount of the offer to settle. La Cité was not aware of the terms of the Pierringer Agreement and did not amend its offer to settle.
[9] The offer to settle did not specify the amount offered by each co-defendant and as such, the amount of La Cité’s continued to offer to settle, after the Pierringer Agreement was entered into, was not specified. In fact, the full $200,000 offered was accepted by the plaintiff, but only from CAAT, one of the co-defendants.
[10] The co-defendants initially made crossclaims against each other and prepared defences to those crossclaims, but these crossclaims were dismissed shortly before the commencement of the trial. I agree that the plaintiff should not be responsible for the costs incurred for the crossclaims against each co-defendant.
[11] After the plaintiff accepted CAAT’s offer to settle for the full $200,000, there wasn’t any further amount to accept from La Cité. La Cité was not aware of the terms of the Pierringer Agreement and was therefore unaware that there was no amount remaining on its offer to settle. La Cité’s only option would have been to have made an offer to settle for the amount that it was prepared to pay in order to settle the action against it, and a term of the order approving the settlement agreement reducing the time to make a valid offer to settle to avoid any prejudice..
[12] The defendants’ joint offer complied with Rule 49.11(b)(ii) as it was jointly made by all defendants.
[13] Rule 49.10(2) provides that where a defendant makes an offer to settle, “the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date…”.
[14] The defendant was completely successful and would be entitled to partial indemnity costs throughout in any event, regardless of the offer to settle.
[15] The Pierringer Agreement was made 3 days before the commencement of the trial and therefore, it was not possible for La Cité to submit a new offer to settle at least 7 days before the commencement of trial. The issue of whether the time for service of a separate offer to settle by La Cité only was not considered as part of approving the settlement with CAAT. However, Rule 49.10(2) does not provide for substantial indemnity costs to be awarded to a defendant as a result of exceeding its offer to settle.
[16] Costs on a substantial indemnity basis are not warranted based on the plaintiff’s conduct because it was not reprehensible, scandalous or outrageous.
[17] The defendants, including La Cité, made a reasonable offer to settle in the circumstances and the plaintiff received less than the amount offered after trial, as there was no recovery on a claim of over $1.8 million dollars.
[18] I will consider La Cité’s offer to settle under Rule 49.13 of the Rules of Civil Procedure. Costs will be awarded on a partial indemnity basis throughout.
Hourly Rates
[19] The action was commenced in 2012 and has continued for approximately 9 years and ended with a 3-week trial plus lengthy written submissions. The case involved a verbal agreement allegedly made approximately 20 years prior to the trial.
[20] Due to the length of time, a number of lawyers worked on the case: I have reviewed the hourly rates charged and find that the partial indemnity rates claimed are reasonable in the circumstances of this case, considering the complexity and the excellent result achieved by La Cité.
Time Spent and Reasonable Expectation of the Losing Party
[21] The amount of fees claimed on a partial indemnity basis to February 3, 2021, when the offer to settle was made, is $403,808 (excluding HST). A further $223,480 (excluding HST) for fees on a partial indemnity basis is also claimed, for a total of $627,288.00. In addition, La Cité claims for disbursements of $37,804 (inclusive of HST).
[22] The plaintiff submits that the costs claimed are excessive and exceed what a reasonable losing party would expect to pay and exceeds what is just and reasonable in the circumstances. Boucher c. Conseil des experts-comptables de la province de l’Ontario, 2004 CanLII 14579 (ON CA), 71 O.R. (3rd) 291.
[23] The plaintiff submits that the amount of $260,000 all inclusive would be appropriate to award as costs. In particular, the plaintiff submits that La Cité conducted 12 days of discoveries which exceeds the 7-hour maximum set out in the Rules. The Plaintiff also submits that La Cité spent an excessive amount of time, 921.40 hours, in preparation for trial and a further 930.80 hours during the trial for a total of 1,852 hours of preparation.
[24] La Cité submits that the action lasted for 9 years and that the time spent was reasonable to properly defend the claim. La Cité used a team approach with junior lawyers charging a lower rate which was reasonable in the circumstances.
[25] The discoveries were conducted pursuant to an agreed plan with 21 hours allowed to discover the plaintiff. This was increased by order of Maranger J. who allowed for an additional 24 hours of discovery of the plaintiff. In addition, there were 2 days of discovery of Mr. Howard a representative of the co-defendant CAAT.
[26] The length of the discoveries and the length of cross-examination of the plaintiff at trial were caused by the circumstance of an oral agreement allegedly made almost 20 years before the trial and changes made by the plaintiff in his evidence. This case turned largely on an issue of credibility and as such, detailed discoveries and cross-examination were reasonably required in this case.
[27] The amount claimed against La Cité was a large amount and involved an alleged verbal agreement about the transfer of years of pensionable service from previous employers, which was a complicated area. Notwithstanding, the difficulty in cross-examining a very intelligent and knowledgeable plaintiff, who gave evasive answers I find that the amount claimed for costs exceeded what a losing party would reasonably expect to pay.
Disposition
[28] Having considered all of the above factors Serge Brousseau is ordered to pay costs to La Cité fixed in the amount of $425,000.00 plus HST plus disbursements of $37,804.80 inclusive of HST.
Released: November 17, 2021
COURT FILE NO.: CV-12-55602
DATE: 20211117
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
SERGE BROUSSEAU
Plaintiff
– and –
LA CITÉ COLLÉGIALE et LE RÉGIME DES COLLÈGES D’ARTS APPLIQUÉS ET DE TECHNOLOGIES
Defendants
DECISION regarding costs
R. Smith J.
Released: November 17, 2021