COURT FILE NO.: 14-45757
DATE: 2021/02/08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mihaly Teglas
Plaintiff
– and –
The Corporation of the City of Brantford and Romex Security Inc.
Defendants
Stephen Sloan and Pryam Varma for the Plaintiff
Kenneth Raddatz and Sanket Ullal for the Defendants
Costs ENDORSEMENT
[1] I rendered judgment in this matter with written reasons issued at 2020 ONSC 7408 on December 1, 2020. I invited costs submissions from counsel which have been received.
[2] The plaintiff brought an action for damages due to the alleged negligence of the defendants in managing a parking garage in Brantford. The plaintiff succeeded in proving that the defendants owed him a duty of care, that there was a breach of that duty of care and that the injuries sustained were reasonably foreseeable. However, the court was not satisfied that the defendants’ breaches of the standard of care caused his injuries as they were the result of a sudden, unprovoked assault by two men who escaped after a brief altercation of approximately thirty seconds.
[3] Counsel for the defendants seeks approximately $60,000 for costs and disbursements of this action. No offer to settle was made by the defendant within Rule 49. The defendants refused twice to mediate the matter. While damages were agreed before trial which did save court time and expense for the parties, the defendants clearly refused to negotiate a settlement of the case or to at least offer a nominal sum to allow the plaintiff to walk away with something. Hardball defence positions by insurance companies are “fair ball” but it does not mean that in every case they will be rewarded with an award of costs, even when they are totally or partially successful on the legal merits of their position.
Relevant Principles in Assessing Costs:
[4] Section 131(1) of the Courts of Justice Act provides that the costs of and incidental to a proceeding are in the discretion of the court, and the court can decide by whom and to what extent the costs should be paid. As with any discretion, it should be exercised fairly and reasonably.
[5] Rule 57.01(1) sets out the general principles which may be applied by the court in exercising its discretion under s. 131(1) of the Courts of Justice Act. The preamble to the rule invites a court to consider the results of the proceeding and any written offer to settle as well as the following factors:
(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.
[6] The costs rules are designed to advance several purposes in the administration of justice. One is to indemnify successful litigants.[^1] That purpose is evident and leads to the second purpose; namely, to facilitate access to justice. Costs rules are also designed to discourage frivolous claims and defences. I find that this was not a frivolous claim despite the fact that the defence position of absolute denial of liability was sustained. The overall objective is to fix an amount that is fair and reasonable, bearing in mind the broad range of factors articulated in Rule 57.01 (1).[^2] The Ontario Court of Appeal has held the failure of a judge assessing costs to consider the “overriding principle of reasonableness” can result in a denial of access to justice.[^3]
Amount Claimed and Amount Recovered in the Proceeding
[7] The relief sought in the Statement of Claim was $1,000,000 in special and general damages plus prejudgment interest and costs. However, the parties agreed on damages on January 6, 2020, thereby reducing the duration and cost of the trial. At that time, the parties agreed that in the event liability was found in favour of the plaintiff, he would be paid $75,000 plus prejudgment interest at five per cent per annum plus amounts owing to OHIP, reserving to the defendant to argue the period of time for which prejudgment interest would be payable. The plaintiffs recovered nothing in the ultimate result.
Complexity of the Proceeding
[8] The issue of liability in this action was relatively complex as the defendants raised policy considerations and a standard of care analysis was required. All of these required research and preparation of factums and case books by both counsel. The plaintiff was successful on these issues.
Any Other Matter Relevant to the Question of Costs
Summary Judgment Motion
[9] The first scheduled trial date was February 12, 2018. The pre-trial was held on December 13, 2017.
[10] In October 2017, the Defendants brought a summary judgment motion on the issue of liability which was heard on December 12, 2017 (the day before the pre-trial). The Defendants were unsuccessful on the motion. No costs were awarded. Considerable time and expense were spent preparing for and attending the summary judgment motion (39.6 hours Stephen Sloan and 53.6 hours Pryam Varma) for total fees and HST of $25,538.00 plus disbursements of $560.10 plus applicable HST.
[11] Mr. Raddatz noted that the plaintiff concurrently brought a cross-motion for summary judgment. The presiding judge apparently made an order that each party bear its own costs. If costs of a motion are reserved to a trial judge, the presiding motions judge would in ordinary course be expected to assess those costs (as he/she is clearly in the best position to do so) and then specifically reserve the awarding of the costs to the trial judge. I do not have a copy of the endorsement on the motions and in the absence of anything to the contrary, I do not feel it is appropriate to take the disposition of those motions into account in assessing costs of the trial.
Adjournments of the Trial:
[12] On February 2, 2018, Mr. Raddatz requested an adjournment of the trial as he was still involved in another trial which would likely run into the second week of the trial sittings. However, Mr. Bradley, the City’s key witness, was not available after the first week of the trial sitting. The Plaintiff agreed to the adjournment on the condition that any costs thrown away be addressed after trial. The trial was adjourned to the September 2018 trial sitting. The Plaintiff claims that the total fees and HST thrown away for this February trial date are $19,684.60 plus disbursements of $30.00.
[13] On May 24, 2018, Mr. Sloan was removed from the record as counsel for the plaintiff. Ultimately, in January 2019, Mr. Sloan resumed carriage of this file. The matter was restored to the trial list and set down for trial commencing the week of January13, 2020.
[14] On or around January 7, 2020, Mr. Raddatz requested another adjournment of the trial because, Roman Kaczmarek, the owner and principal witness for the defendant Romex, was in Europe due to a health crisis involving a family member. On consent, the trial was adjourned to the November 16, 2020 trial sittings, made peremptory on the defence, and costs thrown away as a result of this adjournment, if any, would be assessed upon the conclusion of the trial.[^4]
[15] The Plaintiff claims total fees and HST thrown away for this 2nd trial date are $14,452.70 and disbursements of $148.28.
[16] Mr. Sloan submits that significant time and costs were incurred to prepare for trial on those two occasions which resulted in these expenses being incurred by the plaintiff. On both occasions, the costs associated with the adjournments were reserved to the trial judge.
[17] In his reply submissions on costs, Mr Raddatz noted that most of the legal work in preparing for trial on both occasions was made use of at trial. He noted that in the dockets submitted by plaintiff’s counsel, there is little time allocated to the preparation of witnesses to testify which is time sensitive and most often done at a time proximate to the commencement of trial. He argued that the other work summarized in the dockets such as review of law, the marshalling of facts, updating affidavits of document and responding to requests to admit, and drafting legal briefs have an enduring benefit and the associated work is not “thrown away”. Mr. Raddatz did not seriously contest the hourly rates charged, the work done or the time charged for that work.
[18] Upon consideration of the submissions of counsel and upon review of the dockets submitted by the plaintiff’s counsel, I am satisfied that there was a significant cost expense to the plaintiff and a significant amount of work done which would have to be reviewed and re-analyzed due to the adjournments. I agree that some of the work product was necessary for the trial presentation regardless of when the trial work was done.
[19] I assess those costs thrown away at $25,000 inclusive of H.S.T. plus disbursements of $178.28. The plaintiff should be given credit of $25,178.28 against any costs he is found to have to pay to the defendants.
Disbursements for Medical Experts
Plaintiff’s Disbursements
[20] Mr. Sloan argues that the defendant should be responsible for the costs associated with obtaining an expert’s medical report. Because the issue of damages was resolved prior to this trial, the medical expert was not called as a witness.
[21] The parties agreed on damages on January 6, 2020. By then, the plaintiff had already obtained the medical-legal report of Dr. Michael G. Brandt, Otolaryngology, Head and Neck Surgeon, dated August 30, 2017 in support of his claim for damages. This expert report was served on defendants’ counsel on September 11, 2017 in anticipation of trial commencing February 12, 2018 while the issue of damages was still alive. The plaintiff submits the defendants should bear the cost of Dr. Brandt’s report ($7,731.25 plus HST) plus interest accruing since September 26, 2019 which would not have accrued had the trial proceeded in February 2018 or would have been in a lesser amount had the trial proceeded in January 2020. Interest on that account has accrued in the amount of $1,441.85 as at December 18, 2020. The plaintiff also asserts that the defendants should pay the $625.00 plus HST cancellation fee for the late cancellation of a trial preparation meeting with Dr. Brandt on January 6, 2020 due to the adjournment of the January 13, 2020 trial at the Defendants’ request.
[22] The parties did not agree on costs at the time that they agreed on damages. Costs and disbursements are separate legal considerations from the issue of damages. If the plaintiff wanted to be indemnified for the costs associated with Dr. Brandt, those claims should have been addressed at the time of resolving damages so that the defendants could have turned their attention to those issues. Having successfully defended the action, I do not feel it is fair or reasonable to impose those obligations upon the defendants in light of their success at trial.
Disbursements for David Black:
[23] Mr. Black was called on behalf of the plaintiff. He testified that at a date well prior to the event in question, the government of Ontario amended the Occupational Health and Safety Act in 2010. It required every employer to undertake a Threat/Risk Assessment. Neither the City or Romex did so. As a result, the plaintiff had to retain Mr. Black to give expert evidence surrounding the security of the parkade. The defence did not present the Threat/Risk Assessment prepared by the City of Brantford until very shortly before trial.[^5] While it was prepared several years after the subject incident, it confirmed many of the essential points made by Mr. Black at the expense of the plaintiff. Had it been prepared in a timely manner in accordance with the legal requirements under the Occupational Health and Safety Act, I am satisfied that the evidence of Mr. Black would not have been required and the plaintiff would not have incurred the expenses of obtaining his report and paying him to attend at trial. The plaintiff could have proved most of the points raised by Mr. Black through cross-examination of the author of the City’s report.
[24] As a result, I find that the expenses incurred by the plaintiff relative to the work and testimony of Mr. Black, as outlined in the costs summary presented by Mr. Sloan, should be deducted from any amount payable by the plaintiff to the defendant. Upon review of the submissions of Mr. Sloan, the plaintiff should be credited with the cost of Mr. Black’s report and the cost of his trial attendance in the amount of $6,363.88 inclusive of HST.
Analysis
[25] At the end of the trial of this action, I dismissed the plaintiff’s claim due to his failure to prove a causal connection with the defendants’ negligence and the injuries sustained. However, as stated above, the plaintiff succeeded in three of the four major issues before the court: duty of care, breach of the duty of care, and reasonable foreseeability that a breach of the duty of care could cause a person such as the plaintiff loss and/or injury. It was the evidence relating to those three issues which took approximately two thirds of the time at trial and a similar proportion of the time allocated for submissions.
[26] The defendants were not faultless in this matter and the shortcomings in their management of the parkade were well articulated by Mr. Black, the expert called to testify by the plaintiff.
[27] In that respect, I wrote as follows at para. 92 in my judgment:
Mr. Black gave his evidence in an objective and dispassionate manner. I find his evidence very persuasive. He was of the opinion that there was a basic lack of security consideration in the parkade and there did not appear to be compliance with the threat/risk assessment requirements of the Occupational Health and Safety Act. I concur.
[28] I do not find it was irresponsible or reckless of the plaintiff to proceed to trial in this case. His lawyer presented the plaintiff’s case well, concisely and he negotiated the quantum of damages. While the plaintiff failed on the issue of causation, this was far from a hopeless case, void of merit.
[29] The defendants were represented by counsel appointed by an insurance company. An insurer can withstand the risks of litigation in most cases much more readily than a personal plaintiff such as Mr. Teglas. In my view, when no Rule 49 compliant and operative offer to settle has been made, when the insurer refuses to mediate and when the insurer chooses to force the plaintiff to prove his case, that strategy, while legal and part of a well prepared defence position, does not have to be rewarded with an award of costs in every case. An insurer has a perfect right to force a matter to trial. A business decision is made to pay its lawyers and not the plaintiff. In many cases, such a strategy forces a plaintiff of modest means to not proceed due to the potential risk of an adverse costs award. In other words, the financial clout of an insurer to withstand an adverse costs award can deny a plaintiff access to justice because of the exposure to a potentially devastating costs order if the plaintiff is unsuccessful. When a plaintiff does bring an arguably meritorious case to trial and does not succeed, it should not be subject to a partial indemnity or substantial indemnity costs award in every case. The economic inequity of the parties’ positions is something that the court should in appropriate cases take into account when assessing costs. In cases which clearly have little or no merit, the pendulum should swing away from the unsuccessful party regardless of its economic position. In other words, insurers (or any financially sound corporation, business or individual) should not be subject to frivolous claims. On the other hand, plaintiffs should not be subject to “hard ball” positions taken by insurers who assume that because they succeed, they will be fully or partially indemnified. That is why the court retains discretion to award costs based on the factors present in every case.
[30] The Defendants seeks partial indemnity costs in the total amount of $59,030.33, inclusive of fees and disbursements and HST where applicable, as particularized in the Bill of Costs and submissions made by Mr. Raddatz.
[31] I have reviewed the defendants’ Bill of Costs and list of disbursements and find that the services rendered were totally appropriate. The time spent and the hourly rates sought for counsel involved in the preparation and presentation of the case are reasonable and are sought only on a partial indemnity basis. Mr. Raddatz conducted this trial in a concise, well prepared manner which I appreciated as the presiding trial judge. Mr. Sloan, counsel for the plaintiff, very fairly took no issue with the rates charged for partial indemnity costs nor the hours billed.
[32] The defence could have acknowledged that the defendants owed the plaintiff a duty of care, that they breached that duty of care and that it was foreseeable that such a breach could cause the plaintiff damages. The issue of causation could then have been the sole issue to be argued. That is often the case for example in medical malpractice or some motor vehicle accident cases.
[33] The defendants could have restricted their defence to the issue of causation and saved the court half to three quarters of the time spent at trial. They chose not to do so.
[34] A judgment against the plaintiff for almost $60,000 is a significant financial hit for having had the temerity to seek the adjudication of this court. I have no doubt that Mr. Teglas would have had the reasonable expectation that he would be faced with such a costs award being rendered against him for his counsel billed his time at a significantly higher hourly rate than counsel for the defendants.
[35] In exercising my jurisdiction under Section 131(1) of The Courts of Justice Act and Rule 57.01(1), I assess the defendant’s costs as follows:
Amount claimed: $59,030.33
Less plaintiff’s costs thrown away: $25,178.28
$33,851.72
Less costs attributable to David Black: $ 6,363.88
$27,487.84
Less: 50% for issues on which
Plaintiff succeeded: $13,743.92
Costs payable by the Plaintiff: $13,743.92
Conclusion:
[36] It is ordered that the plaintiff shall pay the defendants their assessed costs and disbursements of this action in the amount of $13,743.92 within thirty days of this order.
[37] This judgment shall bear post judgment interest at the rate prescribed by the Courts of Justice Act.
Turnbull, J. (signed electronically)
Date: February 8, 2021
[^1]: Fong v. Chang (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (C.A.)
[^2]: Boucher v. Public Accountants Council for the Province of Ontario, (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 at para. 24.
[^3]: Ibid, at para. 37.
[^4]: Order of Madam Justice Carpenter-Gunn, dated January 13, 2020
[^5]: This is not to suggest any improper conduct on the part of Mr. Raddatz. The report was not prepared until 2020 and it was shortly before trial that he was made aware of its existence and he promptly and properly produced a copy to counsel for the plaintiff.